Sri Lanka seen as a hub for Islamic banking in South East Asia
View(s):Will Sri Lanka emerge as a hub status for Islamic banking in South East Asia?
“It was two decades ago that the Islamic banking and finance concept was introduced in Sri Lanka and the Central Bank of Sri Lanka later readily accepted our proposal to regulate Islamic banking principles and norms that were in conformity with conventional banking principals,” said the former Attorney General, President of the Bar Association of Sri Lanka and President’s Counsel, Shibly Aziz addressing the 8th Sri Lanka Islamic Banking and Finance Industry Conference held at the Ramada Hotel in Colombo this week.
He said when Islamic banking was started they (public) didn’t want the banks to proceed without being regulated by the Central Bank. “Regulations were something that we asked for and the amendment that was brought in, was a serious change to the concept of conventional banking in Sri Lanka by incorporating Islamic concepts.” Referring to the Sharia compliance in Islamic banking, he said the Sharia component can send waves of confusion into the minds of many people and perhaps could come under criticism in Sri Lanka.
He said it was more prudent to talk about ethical foundations and practices rather than focusing on Sharia law itself. Perhaps the marketing personnel should substitute another term for Islamic banking, he added.
“The fact is that there are over 20 licensed financial institutions in Sri Lanka like banks and insurance companies, etc where Islamic banking principles have firmly established itself into the system,” he said.
Associate Director of ADI Capital Limited Azad Zaheed, the Conference Chairman, said a common goal shared by many was for Sri Lanka to emerge as a common hub for Islamic banking for the South East Asia. “However the journey towards the hub status that we have been inspiring for some time is no easy task and has many challenges. All of that has to be met with a sharing of ideas and collective efforts of all stakeholders. We have to share knowledge and have to look into the practical solutions to issues facing the industry.”
He said Islamic banking services have to offer the public more awareness since it commenced operations almost 20 years ago. “Has Sharia compliance put fear into the hearts of people? How have we presented it? How have we marketed it? ” he asked.
He said one must applaud the support received by the regulator, the Central Bank. Sri Lanka’s Securities and Exchange Commission too has been supportive of Islamic banking principles.
The other panelists who spoke at the CEOs Roundtable Conference were Reyaz Mihukar, Managing Partner KPMG; Kishan Thilakaratne, Director/CEO Commercial Leasing and Finance; and Ishrat Rauff, Group MD/CEO ADL Capital.