The relative stability of Islamic banking institutions in current recession has gained it attention. Even The Vatican said banks should look at the rules of Islamic finance to restore confidence amongst their clients at a time of global economic crisis. Conservative estimates suggest that over US$500 billion of assets are managed according to Islamic investment principles.

ICCB President Mahbubur Rahman told these while inaugurating a day-long ICC workshop on International Trade Payment : Islamic Trade Finance at the Bangladesh China Friendship Conference Centre organized for the bankers on Friday, July 17.

The topic of Islamic Finance has emerged in recent decades as one of the most important trends in the financial world. There has always been a demand in a number of countries for financial products and services that conform to the Shariah (Islamic law). With the development of viable Islamic alternatives to conventional finance, Muslims are beginning to find Shariah compliant solutions to their financial needs, Mahbubur Rahman mentioned.

ICCB President said it is evident that Islamic finance was practiced predominantly in the Muslim world throughout the Middle Ages, fostering trade and business activities. In Spain and the Mediterranean and Baltic States, Islamic merchants became indispensable middlemen for trading activities. It is claimed that many concepts, techniques, and instruments of Islamic finance were later adopted by European financiers and businessmen.

It is estimated that Islamic Banking is growing at a rate of 10-15% per year and with signs of consistent future growth. It is understood that Islamic banks have more than 300 institutions spread over 51 countries, plus an additional 250 mutual funds that comply with the Islamic principles, ICCB President told.

Islamic banking is now an issue of great interest for many, including Western non-Muslims, because the system still remains almost unhurt by the ongoing global financial crisis.

Last year in November, the U.S. Treasury Department hosted a seminar on Islamic Banking to train government employees on Sharia-compliant finance (SCF). It was designed to help inform the policy community about Islamic financial services, which are an increasingly important part of the global financial industry. The U.S. is behind European nations like the UK and France, which are actively promoting Islamic Banking.

In 2006, Islamic financial institutions’ (IFIs) assets worldwide were estimated at more than $300 billion, with another $400 billion in financial investments, according to a study by accounting firm KPMG, ICCB President observed.

The Islamic banking industry in Bangladesh also continues to show strong growth since its inception in 1983. At present, out of 48 banks, 6 private commercial banks are operating as full-fledged Islamic banks. Besides, 21 branches of 10 conventional banks are engaged in Islamic banking, according to Bangladesh Bank statistics.

Mr. Mamun Rashid Chairman Standing Committee on Banking, Technique and Practices said besides its wide geographical scope, the expansion of Islamic finance has also been taking place across the whole spectrum of financial activities, ranging from retail banking to insurance and capital market investments. Perhaps the most striking , however, has been the growth of susuk, the most popular form of securitized credit finance within Islamic finance, susuk commoditize capital gains from bilateral risk sharing between borrowers and lenders, in sharia-compliant finance contracts into marketable securities without interest rate charges, Mamun Rashid observed. Mr. Iqbal Ibrahim Karmally coordinator of ICC UAE Banking Commission and Head of Trade Finance at Sharjah Islamic Bank who conducted the workshop also spoke at the inaugural session.

Some 63 participants from banks attended the workshop. A similar workshop is going to be conducted by ICC Bangladesh in Chittagong on Saturday, July, 18.