DUBAI, 23 September 2003 — On the eve of World Bank/IMF Conference 2003, the General Council for Islamic Banks and Financial Institutions held its second meeting in Dubai. The event turned out to be a meeting of minds of the financial experts of the Islamic and Western world.
The conference discussed many of the key issues facing the Islamic finance industry. With about 300 senior executives and intermediaries from Islamic banking world present, the conference aimed to educate the global audience on the viability of Islamic financial institutions.
Dr. Mohammed Khalfan ibn Kharbash, minister of state for finance and industry affairs, UAE and the chairman of Dubai Islamic Bank, in his opening address, said that around the world, from Malaysia to Manhattan, the world’s leading financial institutions are opening Islamic windows. “These are stand-alone entities and cater to faith-based investors’ increasingly sophisticated requirements through mortgages or mutual funds.”
“Islamic banking and finance hopes to cooperate with mainstream global capital,” he said. “It is demonstrating tremendous potential, and it is our goal at Dubai 2003 to promote the idea of global cooperation further.”
The opening session was later addressed by Ahmed ibn Mohammed Al-Khalifa, governor of the Bahrain Monetary Agency, Dr. Zeti Akhtar Aziz, governor Bank Negara, Malaysia, Christiaan Poorman, vice president Middle East and North Africa region, World Bank. Michael Foot CBE, managing director, Financial Service Authority, UK, Dr. Sabir Mohammed Hassan, governor of Bank of Sudan and Abdoulaye Bio-Chane, director of Africa Department, IMF.
The second session focused on strategic directions in the Islamic Financial Industry. Adnan Yousuf, CEO, Bahrain Islamic Bank, headed the session. The leading speakers of the sessions were Khaled Al-Bassam, deputy governor Bahrain Monetary Agency, Esam Y. Janahi, CEO, Gulf Finance House, Professor Samuel L. Hayes III, Harvard University and Raja Zain Alam Shah, Bank Islam Malaysia, Berhad.
The third and final session of the conference discussed the innovation in the Islamic banking. Dr. Saleh Ahmed Malaika, CEO of Al-Tawfeek Company, chaired the session. The speakers were Atif A. Abdul Malik, CEO, First Islamic Investment Bank, Dost Mohammed Qureshi, adviser, Islamic Development Bank and Iqbal Khan, CEO HSBC Amanah Finance Bank.
Abdul Malik said: “Shariah is a competitive advantage, not a constraint.” He said that if banks put in efforts to structure a product in an Islamically acceptable manner, not only are they conducting their business in accordance with Allah’s commandments “but also from a business point of view, it gives us a way of differentiating ourselves and to carve out a niche in the wider, extremely competitive financial services industry.”
The last speaker of the conference, Qureshi of the Islamic Development Bank, explained the Sukuk as a mode of financing. He said that today, the Islamic banking industry amounted to over $200 billion.
“Islamic finance has come a long way over the past three decades from very humble beginnings in the 1970s, when the phenomenon was limited to a narrow base of market players in a few OIC countries in the Middle East whose primary consideration was to comply with the dictates of Shariah,” he said.
“The 1990s witnessed significant growth, recording an annual rate of growth of 15 percent according to various estimates. Today, as the phenomenon has entered into the 21 century, the rate of growth is estimated to exceed 40 percent annually.
“A number of major international banks have opened special windows for Islamic banking. In terms of size alone, the Islamic financial industry comprises over 300 financial entities and assets which are estimated to be worth over $200 billion,” he said.
The conference sent out a message to the Islamic bankers to go global instead of isolating themselves.