Merit award winner - (Mawbima)media | best web awards | | Last updated three minutes ago


Legal regulatory framework needed to develop Islamic finance and banking

Sri Lanka’s banking watchdog – Central Bank said that it will accommodate Islamic banking and finance within the existing legal and regulatory framework.

Ceylontoday, 2012-09-09 17:48:00
Read 647 Times

Legal regulatory framework needed to develop Islamic finance and banking

By Charumini de Silva

Sri Lanka’s banking watchdog – Central Bank said that it will accommodate Islamic banking and finance within the existing legal and regulatory framework.

Central Bank Director – Bank Supervision Yvette Fernando said, “The Banking Act was amended in 2005 and still some of the provisions are being amended. As the regulator we are doing the necessary changes in a very prudent manner.”


She made these remarks at the first Islamic Finance news (IFN) Road Show held at the Hilton Colombo, recently.


“It certainly is a time consuming process because there is no way that we could amend the act over and over again. Nevertheless, Central Bank is closely looking into the broader and systematic perspective in doing these changes,” she noted.


Answering a question Fernando said, “We have never interrupted or tried to manage your business. Our role as the regulator is to facilitate and create a favourable environment for efficient financial intermediation.”


She further said that the Central Bank warmly welcomed the issues of Islamic banking and finance companies.


CIMB Islamic Bank Malaysia Executive Director and CEO Badlisyah Abdul Ghani sharing the Malaysia’s experience and success said, “Sri Lanka has taken the right decision in opening its windows to the Islamic banking and finance industry, where country is enjoying an impressive economic growth after a three decade war.”


“Nevertheless, it is very important to manage and regulate the Islamic banking and finance or otherwise it will collapse. Sri Lanka could learn from the Malaysian case study and build a good industry to have the maximum benefits to uplift the economy,” he stressed.


KPMG Sri Lanka Managing Partner and Country Head Reyaz Mihular said that there was much room for Islamic banking and finance products in Sri Lanka especially in the retail market.


“Banks and finance companies must come out with different products from grassroots levels to the corporate business level. There is much potential for micro takaful in Sri Lanka in the agriculture, fisheries and other SME sectors. Thus, we must endorse largely on the Islamic banking and finance retail sector. However, it is vital to have the regulatory framework in place to develop the Islamic finance and banking in the country,” he said.


He said Islamic finance and banking does not have to be restricted to Muslims only. Despite the small market proportion there has been a significant boom in the takaful segment during the past two to three years.


NDB Bank Islamic Banking Head Imran Zahir said it was important that the companies capitalize and set the standards in identifying the business, analyzing the business and delivering the business; which the industry currently lacks. Along with that the industry needs to uplift the key criteria of Shariah compliant products, customer requirements and legal/regulatory framework.

Ceylon FT

Trincomalee, with its unspoiled beaches, historical sites and unique hot springs will come alive this weekend starting from today (31) to Sunday (2)The festivities
Ceylon Finance Today:The exchange rate (ER) remained unchanged at Rs 133. 60 to the US dollar in interbank spot trading for the 3rd consecutive day yesterday, after
Ceylon Finance Today: Inflows, probably in the form of loan disbursements, especially from the ADB, boosted market's excess liquidity by Rs 2,201.98 million (US$
Ceylon Finance Today: The market driven by local sentiment for the 3rd consecutive day yesterday, saw the benchmark ASPI gain by 0.25% to 7,332.05 points and the

Focus

Former President Mahinda Rajapaksa has had to face numerous challenges since he had been ousted from his executive seat. The latest of the challenges he has had
Throughout the history of Sri Lanka, the term "Election Law violations" has been a popular phrase whenever an election draws near. Deaths, destruction of public
A video portraying the former President clenching his fist went viral on social media including Facebook, Twitter and YouTube on Tuesday (21). That very night state
Recent intelligence reports reveal that Crusaders for Democracy (CFD) of former LTTE cadres will have favourable results in the upcoming General Elections scheduled