US$2 billion Islamic banking giant to be established

A US$2 billion Islamic banking behemoth is due to be created to help smaller Islamic banks in the region.

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By  Rhys Jones Published  May 22, 2005

A new US$2 billion global Islamic bank is to be set up in the GCC next month. The institution has been created to meet the liquidity management needs of smaller Islamic banks and financial organisations around the world. The proposed global Islamic bank, which is aimed at institutions and not individuals will have an authorised capital of US$2 billion. Furthermore, will have an initial paid-up capital of US$1 billion, which will be increased to US$2 billion within five years. “The exact date of the bank’s launch, name and the country to host this institution will be announced after the general assembly meeting of CIBAFI, to be held in Bahrain next month,” said Ezzedine Khoja, secretary general of the General Council for Islamic Banks and Financial Institutions (CIBAFI). “The Islamic banking industry still needs a large institution to cater to the needs of primary and secondary markets. Over 82% of the Islmaic banks have US$25 million or less in terms of assets and this really narrows their scope to participate in any kind of activity,” he added. The new bank has been backed by Taha Eltayeb, the head of the Islamic Banking Studies Bahrain Institute of Banking & Finance Ahmed and is set to feature representation and stakeholders from around the world. Furthermore, the management of the new institution, which has been heavily promoted by the Islamic Development Bank (IDB) has also received financial pledges from many governments worldwide, according to Khoja. “CIBAFI is working on some other projects to help the global Islamic banking industry as the CIBAFI members passed a resolution to set up International Centre for Conciliation and Commercial Arbitration. Similarly, we are also working on setting up a training standards for the Islamic banks and financial institutions,” he added.

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