Islamic banking assets to reach $ 1.5 billion
Sri Lankan Islamic banking assets would reach $ 1.5 billion from the
present $ 250 million in coming years, says Amana Bank Chief Executive
officer Faizal Salieh. Of the country’s 21.5 million people, about 8 %
are Muslim and there is a strong demand for Islamic financial products
from the Muslim population as well as from non-Muslims.
Though the local Islamic finance is still at a preliminary stage, it
is developing. Local Islamic Finance industry would grow at a double
digit rate over medium to long term and the growth is attributed to the
increased awareness of faith based concepts and the internalization of
the financial markets.
Islamic finance total assets in Sri Lanka account for 3 % of the
total financial assets of the country,which is very small relative to
those in neighboring Bangladesh and Pakistan, while total deposits and
loans of local Islamic finance accounts for 5 %. Islamic Finance could
play a key role in the development of infrastructure projects and the
capital markets of the post war era of Sri Lanka. Amana Bank, Sri
Lanka’s only full-fledged Islamic lender, plans to double its branches
by expanding in rural areas, forecasting a six-fold growth in demand.
According to Central Bank sources, Sri Lanka has currently five
non-Islamic lenders who are offering Shariah-compliant services through
The Sukuk market has the potential to attract investors to finance
projects such as roads, bridges, ports, airports and other activities in
the country. Sovereign Sukuk is a means of attracting funds alternative
to conventional sovereign bond.
However, lack of qualified professionals in the industry, not only in
Sri Lanka, but across the globe has been the major problem faced by the
industry and total workforce of the local Islamic finance is estimated
to be around 1,500.