The
West African Institute for Financial and Economic Management (WAIFEM), in
collaboration with the Central Bank of The Gambia (CBG), yesterday kick-started
a five-day regional course on interest-free Islamic banking, held at the
Seaview Hotel in Banjul.
In
his welcome remarks, the Director General of WAIFEM, Professor Akpan H. Ekpo,
said modern-day Islamic banking started over three decades ago, with the
establishment of Islamic Bank of Dubai in 1975.
Other
banks in the Middle East entered the market, and Islamic banking eventually
spread to Asia, Europe, America and the rest of the world, he explained.
According
to the WAIFEM DG, Islamic banking or non-interest banking is a banking model
based on profit and loss sharing system.
“It
rests on the Islamic doctrine of universal permissibility in business dealings,
which states that everything is permissible unless it is clearly prohibited,”
Prof Ekpo said.
Islamic
banking is expected to give depositors another choice of where to invest their
wealth. In this dispensation, the customer and the bank share the risk of any
investment on agreed terms, and divide any profits that accrue there from.
The
WAIFEM DG further stated that the objective of the course is to provide a broad
understanding of the rudiments of Islamic banking to participants.
In
particular, it will provide clarity on the Shariah requirements and the
avoidance of RIBA in modern-day banking business, he explained.
He
also stated that the broad themes to be
covered in the course include fundamentals of Islamic Banking, introduction to
Islamic banking as it relates to banking and finance development, challenges in
Islamic banking and finance; the concept
and overview of Islamic finance; legal and institutional framework; operation of Islamic banking; Sharia
governance framework; Islamic finance in a secular environment; Islamic
financial products; risk management in Islamic finance; Islamic banking versus
conventional banking; Islamic insurance; and operators’ perspective of Islamic
insurance.
In
his official address, the 1st deputy Governor of the Central Bank of The
Gambia, Dr Saikou Jabbie, commended the organizers of the programme for their
relentless effort at sustaining capacity building for macroeconomic and
financial management in the sub-region.
He
also stated that Islamic banking has emerged and evolved as a viable and
competitive component of the overall financial system to drive growth and
development throughout the world.
He
said the Middle East and Asia pacific regions, with well-developed Islamic
financial systems, have enjoyed remarkable economic growth, due mainly to
Islamic finance activities.
A
case in point is Malaysia where Islamic banking has contributed positively
towards its economic growth, he noted.
He
also spoke on Islamic banking in The Gambia, saying that given the large Muslim
population and the potential of Islamic banking, the Government of The Gambia
did go into partnership with the Islamic Development Bank to develop the
necessary infrastructure for Islamic banking in the country.
“This
partnership resulted in the revision of the Financial Institution Act 1992, now
the Banking Act 2009, and facilitated the creation of a legal framework for the
establishment of Islamic banking in the country,” he said. “This was followed
by the necessary regulatory framework to adequately supervise Islamic banks.”
In
1997, the first Islamic institution, the Arab Gambian Islamic Bank, was
established through private equity participation including the Islamic
Development Bank, the CBG deputy governor stated, saying: “Within a decade, the
bank was able to mobilize 25,000 depositors with a total deposit of 400
million.”
The
bank engaged in products such as murabaha, mudarabah, Musharakah, WIkala.
To
further deepen the financial system and create an investment outlet for Islamic
bank and other Sharia compliant investors, the deputy governor noted, the
Central Bank of The Gambia developed an investible Islamic instrument called
the Sukuk AL Salam in 2007.
Earlier
in his welcome remarks, the WAIFEM DG, Professor Ekpo, seized the opportunity
to thank the Governor of the Central Bank of The Gambia, Hon. Bakary Jammeh,
the management and the staff of CBG for their support to WAIFEM and its
activities.
Professor
Ekpo said that since it commenced operations in 1997, WAIFEM has executed over
596 training and capacity building programs which have benefited about 16,230
middle/senior executive level officials from the sub-region and beyond.
“Today,
WAIFEM is rated as a centre of excellence in capacity building and training,”
he said, adding: “WAIFEM has a Business
Development and Consultancy Unit (BDCU) that caters for the capacity needs of
the private sector.”
The
synergies of both the public and private sector, created by WAIFEM, are
essential for eventual economic integration of the sub-region, Prof Ekpo
stated.
