New model for future of Islamic banking examined

Sheikh Salah Abdallah Kamel, President of the Dallah Al- Barakah Group and Chairman of the General Council of Islamic Banks and Financial Institutions, (GCIBFI) has called for a streamlining of the Sharia Council system to help deal with the different interpretations of Shari'a compliance between jurisdictions across the Islamic world.

Speaking in an exclusive interview with Oliver Cornock, Country Editor for Oxford Business Group (OBG), the authoritative UK-based publishing, research and consultancy services company, Sheikh Salah expressed his concern that some institutions tended to simply re-brand conventional financial tools without understanding the meaning of true Shari'a compliance.

"The challenge is whether the owners, directors and employees truly understand what Islamic banking means. At GCIBFI we are working with key partners to implement a new model whereby fatwas would be issued by a single entity," explained Sheikh Salah.

"I hope that this would assist in helping to define the concepts and problems of the differing interpretation of Shari'a compliance," he said.

The plan is that the GCIBFI, Islamic Development Bank and ISFB want to have a central Shari'a council for issuing fatwas, in addition to a Shari'a council for each bank, for further control.

Sheikh Salah outlined his vision for addressing such factors with intentions for an Islamic "mega-bank" involved with all aspects of the sector on a global scale. "GCIBFI represents 130 banks in 40 countries and we are developing a new model to enable us to work with all of them in every Islamic country," he said. "The Dallah Al-Barakh Group will be looking to invest between $100m and $200m in the management portion of this new model."

The Sheikh also explained the broader concepts of the Islamic economy and the emphasis it places on developing society. "As yet we have not adequately emphasised the development of our countries and the earth - this is one of the most important tenets of the Islamic economy. At the Dallah Al-Barakah Group we aim to work in any sector that doesn't harm humans or the earth and we also look to how many jobs can be created through our projects."

The exclusive interview is one of some 300 meetings with top level business leaders, politicians and foreign investors in the Kingdom as part of the research for OBG's 'The Report: Emerging Saudi Arabia 2007', which will be available in the second quarter of this year.

The work underscores OBG's commitment to co-operating with locally-based institutions in compiling its signature series of world class country economic and political assessments. OBG's hallmark of unrivalled market intelligence combines the publisher's international expertise with on-the-ground knowledge of internationally renowned, locally-based institutions.

Written by a team of OBG's international analysts, based in Riyadh, the 200 page inaugural report is hotly anticipated with pre-publication orders having reached the 70,000 mark.