FINANCIAL INCLUSION. Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. (left) promotes Islamic Banking as a way of ensuring financial inclusion in the country. BSP Assistant Governor Arifa Ala said two firms are eyeing to establish Islamic Banking operations in the Philippines. (Photo by Leah Gonzales)
MANILA – Maybank Philippines and a foreign company plan to establish Islamic banking operations in the country, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.
In a briefing at the BSP Office in Manila, BSP Assistant Governor for Financial Supervision Sub-sector 3 Arifa Ala said Maybank plans to open an Islamic banking window.
"It has a plan. It plans to open an Islamic banking window… We are seeing two potential applicants, but they have not yet submitted applications. But we have held meetings with them already, discussing the requirements for establishing the Islamic banking unit," Ala said.
She added that Maybank and another foreign firm still have not submitted an application as of today.
"But we've heard information that [Maybank] may submit it maybe within this month. We've been discussing with them the requirements," she said.
As provided under Republic Act 11439, Islamic banking business refers to a banking business with objectives and operations that do not involve interest as prohibited by the Shari’ah and which conducts its business transactions in accordance with the principles of the Shari’ah.
An Islamic banking unit, meanwhile, refers to a division, department, office, or branch of a conventional branch that conducts business under Shari'ah.
"In terms of the assets, one of the requirements is that the assets should be Shari'ah compliant. So financing of corporations that are producing alcohols or gambling are not allowed to be financed by Islamic banks," said Ala.
The Philippines currently has two operating Islamic banks in the country. These include the Amanah Islamic Bank and the CARD Bank.
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said Islamic banking was a good way to promote financial inclusion, especially in the Bangsamoro area where only 8 percent of the population has bank accounts.
"So, I think by introducing Islamic Banking, we can bring more people into the formal banking system. The most attractive banking instruments for that region would be Islamic Banking," said Remolona.
"What we want to do is create an inclusive banking system, a sustainable and vibrant Islamic finance ecosystem within the country to complement the banking system we already have," he added. (PNA)
