Malaysia’s cbank re­view­ing of­fers to set up mega Is­lamic banks

The Pak Banker - - Company& -

KUALA LUMPUR: Malaysia's cen­tral bank said on Wed­nes­day it was still re­view­ing of­fers to set up mega Is­lamic banks, sug­gest­ing it could miss its tar­get of award­ing a li­cence this year as the in­dus­try strug­gles to cre­ate a well-cap­i­talised sharia lender.

Bank Ne­gara Malaysia is of­fer­ing up to two new Is­lamic bank­ing li­cences to for­eign firms to set up banks with at least $1 bil­lion of paid-up cap­i­tal, a move that the in­dus­try hopes will spur more lend­ing and cre­ate big­ger Is­lamic banks that can com­pete with global len­ders.

Malaysian cen­tral bank chief Zeti Akhtar Aziz had said the author­ity hoped to an­nounce in 2010 at least one li­cence for a big Is­lamic bank.

"Bank Ne­gara Malaysia is still as­sess­ing the ap­pli­ca­tions for mega Is­lamic bank li­cences," it said in a state­ment in re­sponse to a Reuters query. " The an­nounce­ment of the li­cences will be made on com­ple­tion of the as­sess­ment."

Bankers say the bid to cre­ate a well-cap­i­talised Is­lamic bank, which dates back to at least 2006, has been fraught with dif­fi­cul­ties such as a strug­gle to raise suf­fi­cient cap­i­tal and dis­agree­ment as to where the lender should be lo­cated.

One of the project's main back­ers is Saudi Ara­bia's Sheikh Saleh Kamel, founder and chair­man of Bahrain-based Is­lamic bank Al Baraka.

Malaysia's cen­tral bank has not dis­closed the ap­pli­cants for the li­cences but there has been mar­ket spec­u­la­tion that the Is­lamic Devel­op­ment Bank and Al Baraka could be keen.

Is­lamic fi­nance has be­come a pop­u­lar source of al­ter­na­tive fund­ing af­ter the credit cri­sis but most sharia banks lack suf­fi­cient cap­i­tal to com­pete with Western len­ders on man­dates to syn­di­cate fi­nanc­ing, ar­range bonds and sup­ply project fi­nance. The sharia fi­nance in­dus­try's as­sets are es­ti­mated at $1 tril­lion, a frac­tion of the con­ven­tional sec­tor's $232 tril­lion, ex­clud­ing de­riv­a­tives. -PB News

KARACHI: Pres­i­dent Asif Ali Zar­dari ad­dress­ing the PPP Pro­vin­cial Cabi­net and Assem­bly mem­bers at Bi­lawal House. -App

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.