By Kaushalendra Singh - MUSCAT — International financial institutions and experts are gathering in Oman to deliberate upon various issues of Islamic banking, which is poised to offer several opportunities in financial services sector as also to the common man. The deliberations will be part of the Oman Islamic Economic Forum (OIEF) to be held at the Al Bustan Ritz Carlton Muscat Hotel on December 17 and 18. The event is to be organised under the joint auspices of Bank Nizwa and Amjaad Development.
A major highlight of the OIEF will be the annual Global Islamic Finance Awards (GIFA), which is aimed at recognising the best financial institution for adopting the best business practices. “GIFA is different from other awards it is based on the methodology developed by Edbiz Consulting,” said the organisers.
Among the high profile speakers is Tun Abdullah bin Haji Ahmad Badawi, former prime minister of Malaysia, who will give a keynote speech at the OIEF. “Leading practitioners, prominent heads of state, academicians and other stakeholders will discuss ways in which Islamic finance dealings can have a positive impact on the global economy and more specifically, the Omani economy.
It will introduce best practices in Islamic finance to Omani authorities and other relevant players, and discuss key issues in Islamic finance, enabling them to lay the foundations,” said Khalid Alyahmadi, Chairman of Amjaad Development.
Commenting on response from participants, Khalid said: “We are receiving good response from both public and private sectors. Among the banks, the first Islamic Bank in Oman, Bank Nizwa is OIEF’s strategic partner. BankMuscat and Al Madina Financial and Investment Services Company are main sponsors. Several known organisations like CIBAFI, Islamic Finance News and CNBC Arabia have assured presence at the OIEF.”
The recent global financial crisis, according to Khalid, “forced everyone in the financial sector to explore the Islamic finance to pave the way for commercial opportunities for local as well as international partners.”
Ahmed Saif al Rawahi, Chairman of the Founding Committee of Bank Nizwa, said in his comments: “We want to develop Bank Nizwa into a new model for Islamic banking to merge world-class professional performance with faith-based social responsibility to the core of our business. We have entered into a strategic partnership with Amjaad Group to hold OIEF because we believe that our commitment to Shariah-based financial services and Amjaad's organisational professionalism will make a success of the Forum, generate broad awareness of Islamic finance in Oman, and showcase our country's potential to the industry and lead to new trends in Islamic banking.”
There are Islamic products, which have made significant presence in the financial sector. In a short span of time, Sukuk has grown exponentially and represented an alternative for businesses to raise finance.
“The total value of the Sukuk issuance so far for the year 2011 amounted to $50 billion reaching a record high reached last year. Takaful which is an Islamic compliant insurance is another important milestone. We have witnessed the green light for the first licence of a Takaful company in Oman.”
The purpose of the conference, according to the organisers, is not only to cover the concept of Islamic Banking, Sukuks, or Takaful system, but to dwell upon the multiple Islamic parameters that are required to be in place in order to have a well functioning Islamic economy. “There is growing evidence that Islamic banking and Takaful is associated with less risk compared to the present financial structures prevailing in the Western economies. Introducing Islamic Finance is not a luxury any more but is a necessity given the present huge demand by locals. One interesting fact that was proved by recent studies indicates that almost one third of deposits in local banks are bearing no interest. This clearly shows that there is strong preference by the Omani population to deal with the Islamic banks.”
“Oman has the potential to become a regional centre of excellence for Islamic finance, but we shall start from the level where others have reached already and not from scratch. We should learn from other’s experiences,” said Khalid while commenting on Muscat as venue for the Forum.
Khalid quoted Global Islamic Finance Report 2011 to put emphasis on the fact that Islamic finance has huge potential. According to the report, the Islamic Finance industry is currently valued at approximately $1.14 trillion. The industry is expected to grow rapidly at a rate of between 10 – 15 per cent per annum over the next decade. “And as an Omani I do not want Oman to lag behind and miss out on the potential of this promising industry,” he said.