Kuwait Finance House-Bahrain CEO and MD Abdul Hakim Al-Khayyat said that Islamic banking has numerous advantages and capabilities that allow it to play a pivotal role in solving many economic problems in the GCC.
Al-Khayyat added that Islamic banking is not operating at full swing yet, either as a result of lack of legislations or opportunities.
He stressed that having a highly ethical Islamic financing system and the efficient collaboration among local and international institutions will contribute to the prosperity and development of the society and economy.
He went on to say that Islamic banking services have paved the way for the future, and have become one of the most important alternatives that many economies worldwide seek. He noted that Islamic financing is based on real long-term guarantees, since it relies on assets.
Moreover, he mentioned that governments need to issue more Sukuk, in order to provide short-term liquidity instruments.
However, since legislations that organise the issuance of Sukuk in some countries are lacking, this significant instrument has been rendered obsolete, which erodes the efforts of Islamic banks to help markets overcome their crises.
Furthermore, he explained that Islamic banks can play an efficient role in solving the housing problem through its role in construction projects and real estate development, not to mention several instruments that finance that sector, such as Murabaha, Ijara, and others.
He remarked that KFH-Bahrain shoulders several major real estate projects, such as Durrat Al-Bahrain residential and entertainment project that costs $3 billion. The project occupies 20 square kilometers, and is expected to be as big as Manama City once it is complete.
In addition, there is Al-Waha industrial project that establishes industrial compounds; thus increasing national income through attracting foreign investments. Diyar Al-Muharraq is another giant project that consists of residential and commercial units for people middle class and rich people.