Given the geographical location of Sri Lanka, the country has tremendous upside potential to attract Islamic flows from Middle East to Far East, and thereby emerge as a commercial hub in the region, Managing Director and Chief Executive Officer at Amana Bank Limited Faizal Salieh, indicated last week.
Speaking at the Second Islamic Finance news Sri Lanka Roadshow (IFN) organized by the REDmoney Group of Malaysia in collaboration with the Amãna Bank, he further said that the demand for Islamic Financial services is on the rise, locally, where over 25 percent of the clients associated with the foresaid bank, which offers ‘Sharia’ compliant financial products, are non-Muslims.
“As of today, the country has one full-fledged Takaful bank, four banks that have opened Islamic financing windows and four financial institutions that offer Islamic banking instruments. Due to the uniqueness in terms of fairness, asset based approach and refusal to profit from genuine difficulties of people, Islamic finance is becoming increasing popular world over, among Muslim and non-Muslim customers alike,” the Chief expressed.
Despite the rapid development of the, however, Salieh pointed out there were still issues and challenges facing the Islamic Finance sector in Sri Lanka that has to be discussed and deliberated in order to progress further.
“The products offered need to be further developed. For instance, the agricultural sector of the country should be integrated to the Islamic Finance framework. On the other hand, the Central Bank of Sri Lanka could introduce Sharia compliant treasury bills, to enhance investor base of the country and thereby sustain the growth momentum of the country,” Salieh observed.
However, he emphasized that the regulator should communicate with stakeholders attached to the Islamic Finance sector in order to harmonize Sharia compliant products with the Sri Lanka’s economic system.
Meanwhile, addressing the same forum, Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal reiterated that Sri Lanka’s banking and economic sectors should welcome fresh features and instruments such as Islamic Finance in order to attain and sustain the eight percent GDP growth target set by the regulator.
“Sri Lanka is one of the fastest growing economies in the region today. In order to retain this momentum, however, the country’s economy is open for new investors - to venture, and lock themselves into positions with Sri Lanka,” Cabraal remarked.
(The Nation / 01 Sep 2013)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
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