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.