Islamic banking could become the new financial head turner following the opening of a two-day international conference on Islamic banking and finance on Tuesday.
The conference is being organised by the Al-Huda Centre of Islamic Banking and Economics (CIBE) in association with Al Barakah Multi-purpose Co-operative Society Limited at Gold Crest Hotel, Quatre Bornes.
Islamic banking operates under the Sharia law, which stipulates that no money should be earned from interest. Instead, the money needs to be put into production to generate wealth.
However, the element of risk still prevails but the risks and turnover are shared equally by all parties.
Several eminent personalities were present at the event, including minister of Labour, Industrial Relations and Employment Shakeel Mohamed, second deputy governor at the Bank of Mauritius (BoM) Iqbal Belath, Pakistani high commissioner Muhammad Siddique and the chief executive officer of the Al-Huda CIBE, Zubair Mughal.
Islamic banking represented $1.3 trillion in 2010 and stood at $150 billion in the 90s. Among countries where Islamic banking is implanted include India, Japan, the United Kingdom and the United States. The last to join was Zambia.
Commenting on the implementation of Islamic banking, minister Mohamed said, “The money ought to be used in ways compliant to Sharia law but with Mauritius being a multi-cultural island, there are a number of issues which need to be dealt with first.”
According to Belath, the new product will work side by side with other existing products until they abide by the regulations.
The Pakistani high commissioner believes that the prospect of growth is high as the demand is there. “Islamic finance could provide an alternative to conventional banking,” Siddique said.
Belath added that the BoM was committed to continually update its regulations and as such took several initiatives such as amending the Banking Act.