MARKET PARTICIPANTS will have new opportunities waiting for them as the country’s Islamic banking industry continues to advance, according to the Philippine central bank.
“For non-Muslim investors, Islamic banking is available to those who want to diversify their portfolios,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno told an online news briefing on Wednesday.
The central bank in 2019 released the rules on Islamic banking after a measure seeking to regulate them was passed.
Islamic banks operate under Shari’ah-compliant principles such as the noninvolvement of riba or interest. It also allows funding through “sukuk,” a bond-like instrument.
The BSP has received inquiries from interested parties but has yet to get a formal application for an Islamic bank or banking unit.
“The BSP would take a light hand in regulation, preferring to leave issues on Shari’ah compliance to the Islamic banks,” Mr. Diokno said.
He said forthcoming regulations on Islamic banking include those covering liquidity management, reporting framework, capital adequacy and leverage ratio framework.
“The BSP will continue to maintain flexibility in its approach to allow industry players to thrive in this new environment,” the BSP chief said.
Players that will set up Islamic banks or banking units must establish a Shari’ah Advisory Council composed of qualified people with experience in Shari’ah, banking, finance, law and related disciplines.
The Al Amanah Islamic Bank is the sole Islamic lender in the country. It has been under the control of the Development Bank of the Philippines since 2008. — Luz Wendy T. Noble