Need to enact Islamic finance and banking law

Staff Reporter :”Rapid growth of Islamic finance during the last decade has drawn the attention of national policy makers and international institutions”, Deputy Governor of Bangladesh Bank Md Abul Kashem said this while he was speaking as a chief guest at a seminar on “Issues and Challenges for Islamic Finance and Banking in Bangladesh in the Perspective of Global Development” at Bangladesh Institute of Bank Management (BIBM) in the city on Sunday.The chief guest said, central bank should take the responsibility to ensure profit and loss sharing deposit to streamline the Islamic Banking System.He also laid emphasis on the need for formulation of act to make the Islamic banking system well oriented. The formulation of law for separate Islamic banking fully depends on the government’s decision, he further opined.Assistant Prof of BIBM Md Alamgir presented the keynote paper while Social Islami Bank Managing Director Md Shafiqur Rahman, Director General of BIBM Dr Toufic Ahmad Choudhury and Director of BIBM Dr Prashanta Kumar Banerjee spoke at the seminar.Speakers suggest to enacting separate Islamic banking law to secure the investment inflow in the country.Islami Bank Managing Director Abdul Mannan said, “Absence of separate act for the Islamic banking activities in Bangladesh creating multifarious difficulties.” He demanded setting up separate Islamic banking department at the central bank. “Bangladesh Bank has issued various guidelines related to core risk issues such as credit risk management, asset liability risk management, internal control and compliance risk management, foreign exchange risk management, anti-money laundering risk management and information technology risk management for the conventional financial institutions but there is no guidelines for risk management of Islamic financial institutions,” he pointed out. BIBM Prof Md Alamgir pointed out that “Islamic financial institutions need more Shariah complaint bonds to manage their liquidity effectively. It is important to activate Islamic inter bank money market of the country”.”Islamic banks should invest more in socially desirable sectors, especially in agriculture and small enterprises,” he suggested.At the end of last year, surplus liquidity in the Islamic banking sector stood at Tk 12,644.25 crore.