Two banks and one section of the business community yesterday hailed government’s signing of the Model 1A Inter-Governmental Agreement (IGA) as a positive one.
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ADB: Islamic banking services coming to T&T
The Agricultural Development Bank (ADB) is hoping to introduce Islamic banking services for its clients within one year. Jail Leladhasingh, corporate manager, business development at ADB made the announcement to the media on Monday when he introduced Dr Hatim El Tahir, director, Deloitte and Touche, Bahrain, and Bassel Nadim, senior manager and strategist, Deloitte and Touche, Dubai.
The ADB brought the duo into the country as consultants to educate the public about Islamic banking methods and strategies. Leladharsingh said the ADB is exploring the possibility of setting up the bank to offer this alternative service to farmers. He said the ADB’s Islamic banking facilities will be accessible to Muslims and non-Muslims.
Laladhasingh said the idea of setting up an Islamic bank within the ADB came out of a memorandum of understanding signed with the Government and the Islamic community last year. The principle of Islamic banking is based on risk-sharing rather than the risk-transfer of conventional banking. It involves concepts such as profit sharing (mudharabah), safekeeping (wadiah), joint venture (musharakah), cost plus (murabahah), and leasing (Ijar).
El Tahir said Islamic banking is governed by local laws and the Shariam, the moral and religious laws of Islam. He explained that it helps the less privileged who are without access to capital and the advantage of sharing risks ensures a commitment from the financier toward the growth of the community.
Nadim said Islamic banking follows a different business model while still complying with local laws. Its popularity varies in the countries where it has taken root. He said in Malaysia, a big portion of the Islamic bank’s clients are non-Muslims, while in the Gulf States, Islamic banks control 22-25 per cent of the market share.