Plans to develop Shariah interbank market
The Shariah interbank market will be developed in Sri Lanka to
position the country to become a regional player. The possibilities are
being looked at to raise a Shariah bond and negotiations are taking
place at present.
The Sri Lankan banking industry landscape needs to be changed to
incorporate better practices. Hence, Shariah is a concept that could be
adopted by any customer not only Muslims, we need to promote this
banking model, Wealth Lanka Management Chairman Mangala Boyagoda said.
“We will combine our exclusive strengths to introduce specialized
Shariah linked financial instruments, incorporating true Shariah
principles to the local market for the benefit of not only for Muslim
brethren, but also for the country at large,” he said.
Islamic finance specialist Al Tayseer Advisory Services (Al Tayseer),
a part of International Al Tayseer Group, signed a Memorandum of
Understanding with Wealth Lanka Management (Pvt) Ltd, a local
consultancy firm to jointly develop Shariah linked financial instruments
for the local market by pooling their individual expertise. Many banks
and financial institutions are experiencing increased demand for Shariah
linked products and this demand is expected to grow further. As such,
our focus will be to develop short and medium-term Shariah based
financial instruments for banks, finance companies, leasing companies,
corporate entities as well as the government,” he said.
“We are confident that entering into this new venture is both timely
and appropriate. The launch of the venture would help support the
government endeavours as well as offer alternative and innovative
financial products in line with Shariah principles. In the backdrop of
the dawn of peace and the government’s commitment to develop capital
markets will have positive impact on the venture, Boyagoda said. The
Shariah concept is different from commercial banking and there is a need
to educate and train the public to gain benefit. The country’s Shariah
banking will be developed according to the Malaysian model and
discussions are underway with two banks to develop a road map, Al
Tayseer Director Edwin Das said.
“Al Tayseer has identified Sri Lanka as an emerging market for
Islamic finance. We have much to offer for the country’s business
community in terms of Islamic banking advisory, consultancy, training,
legal and compliance, regulatory framework and policies,” he said.