Dubai: Bankers exhorted the governments of Muslim countries to make their respective regulatory environment m (more)
Tuesday, Nov 26, 2013
Dubai: Bankers exhorted the governments of Muslim countries to make their respective regulatory environment more hospitable to facilitate the growth of Islamic banking and finance, during a CEOs debate at the first Global Islamic Economy Summit 2013 in Dubai yesterday.
When asked how the UAE and other governments could help, Hussain Al Qamzi, Chief Executive of Dubaiâs Noor Islamic Bank, said that there is a need of a more simpler regulatory environment when it comes to Islamic finance.
âWe need regulatory environment that help Islamic finance to flourish and to introduce products to the [market],â said Al Qamzi.
On Monday, in his address to the audience, which included His Highness Shaikh Mohammad Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai. Ahmad Ali Al Madani, the president of Islamic Development Bank in Saudi Arabia, said that the Islamic governments should work hard to create an environment that would help Islamic businesses to be more creative to attract new investments and eliminate obstacles that hinder the industryâs growth.
Interpreting Al Madaniâs remarks, Tirad Mahmoud. chief executive of Abu Dhabi Islamic Bank, said the regulatory regimes in many of the countries are not hospitable for the Islamic banks. âIslamic banks are treated as inferior to conventional banks â not equal, but inferior,â said Mahmoud. However, he acknowledged that the Gulf Cooperation Council (GCC) governments are âactually very goodâ and are hospitable, but he pointed out that in many other Muslim countries Islamic banks cannot deploy their liquidity at a profit. They keep it idle because the Central Banks have not introduced regulations that permit Sharia complaint liquidity products. They cannot issue sukuk or Islamic certificates of deposit or many things like that. Adnan Chilwan, chief executive of Dubai Islamic Bank said that as Islamic banking practitioners within the country, we need a small task force to work closely with the regulator and have a regular dialogue with them on the lines of what has been achieved in Malaysia. âIt is for the purpose of mak[ing] the regulator understand that you need to come up with a separate set of regulations, the ones that Islamic banks deal with that would address the issues of liquidity risk management or just funding,â said Chilwan.
Mohammad Sulaiman Al Omar, chief executive of Kuwait Finance House, praised UAEâs initiative from the beginning to introduce solvent risk sukuk by the central bank. He said he would like to see more sukuk coming out of the UAE and GCC.
By Gaurav Ghose Financial Features Editor
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