Crowning excellence in Islamic Banking and Finance
Thursday, 31 October 2013 00:44
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By Sarah Hannan
Wednesday 23 October saw a unique gathering for the Islamic Banking and Finance (IBF) fraternity at a gala celebration where the inaugural independent award ceremony recognising the Sri Lanka Islamic Banking and Finance Industry’s (SLIBFI) significant contribution to the IBF took place at Galadari Hotel, Colombo.
UTO Edu Consult Assistant Director Aakif Wahab welcomed the gathering and stated that the Islamic Banking and Finance industry is gaining world recognition and in the last couple of years the industry has tremendously grown in Sri Lanka: “This awards ceremony aims to honour the best of IBF institutions and individuals who have work towards establishing Sharia law approved banking and finance practices.”
The Chief Guest for the evening, High Commissioner for Malaysia His Excellency Azmi Zainudeen in his speech stated that it was a true delight and honour to be the Chief Guest of an award ceremony as such saying: “The IBF industry has achieved a significant growth within the last few years and is expected to reach a revenue generation of $ 1.3 billion by the end of this year. The IBF industry is set out to promote accountability and reach sustainable growth by introducing ethical banking practices to improve connectivity in emerging economies like Sri Lanka.
Committed towards economy
“A vibrant and modern economy can be built on a conducive environment and continue to innovate comprehensive banking tools. I trust that in return IBF industry will transcend the religious barriers and penetrate the banking structure in this country.”
Being the knowledge partner for the event and the adjudicators for the award categories KPMG Managing Partner Reyaz Mihular speaking on behalf of KPMG highlighted the fact that they made a commitment towards building this country’s economy.
“I am confident that the IBF industry in Sri Lanka has come of age and the industry has gone beyond its crawling stages”. He further added the judging criteria of the awards and stated that there has been a greater level of participation at this year’s award nominations.
Legal challenges for Islamic banking and finance
Addressing the legal aspects and the challenges within the country’s legal frame, Nithya Partners Partner Naomal Goonewardena elaborated on key areas of conflict when it comes to Islamic banking finance industry. Goonewardena stated that the Sri Lankan IBF industry is yet to partake in a signature transaction since the launch of IBF.
“During the period of 1992-1994 a signature transaction had occurred in the jurisdictions of IBF however, this transaction was not fully documented to use it as a case study in future transactions. Therefore we are yet to focus on the legal ramifications and need to acquire the skills and expertise to complete a signature transaction.”
He further explained that the Sri Lankan socio-economic frame work needs to consider bankruptcy especially when a signature transaction takes place. “If we have the necessary policies and legal frameworks in place a transaction of this magnitude can be safeguarded. “When it comes to IBF there is a multiplicity of standards which hurts the structure of a complete transaction and I learnt that in this sector to complete a transaction or to close the deal multiple parties get involved and this involvement needs to be considered by the time a decision is made.
“Sri Lanka’s Islamic banking and finance sector has an absence of a regulator for the industry and the general notion of loss of capital overtime is need to be looked while we adapt general principles to the framework.”
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Pix by Upul Abayasekara
