Country Report sheds key insights to way forward in Islamic finance in Sri Lanka

Monday, 7 November 2011 00:05 - - {{hitsCtrl.values.hits}}

The first ever Islamic Finance Country Report in Sri Lanka was launched by KPMG Ford, Rhodes, Thornton and Co. in collaboration with the Research Intelligence Unit.

The publication titled ‘Islamic Finance Country Report – Window of opportunity in Sri Lanka’ provides insight into the demographics of the Islamic finance market and an in-depth analysis of the trends in the industry together with the future position and a series of interviews with key professionals in the field.

Islamic Finance was first introduced to Sri Lanka as early as 1997.

However the landmark evolution was the amendment made to the Banking Act No. 30 of 1988 in the year 2005 in order to permit licensed commercial banks and licensed specialised banks to offer selected financial instruments such as Murabaha and Mushakraka.

Islamic Finance has garnered an increased interest in the last few years and has the potential to develop the capital markets of Sri Lanka and assist with the development of infrastructure along with encouraging foreign investment in Sri Lanka.

At present there is a State Bank and two licensed Commercial Banks that operate Islamic finance windows with many other potential players on the verge of venturing into the market.

Sri Lanka has witnessed an important milestone in that the Central Bank of Sri Lanka has permitted the operation of a fully fledged Islamic Finance Bank and recently an Islamic Fund was launched facilitating investment in listed securities and this Report will no doubt assist the entrance of new players and investors into the market both foreign and local alike.

Amana Bank Limited Chairman Osman Kassim, Chief Guest at the event, during his address, commented on the development of the Islamic Finance industry in Sri Lanka and also mentioned that the country’s strategic geographic location provides a window of opportunity for Sri Lanka to service the Islamic Finance needs in the SAARC region.

Also at the release, Chief Executive Officer of the Research Intelligence Unit Roshan Madawela, spoke on how the publication provided information on both the demand and supply side of the industry.

He went on to comment on how the methodology used provided insight into product profiles, customer profiles, market penetration levels, the labour market dynamics and growth potential of the industry.

Commenting at the event, Partner and Head of Advisory of the Firm Reyaz Mihular said, “KPMG Ford, Rhodes, Thornton and Co. has continuously endeavoured to eliminate the barriers faced by the Islamic Finance industry and this publication provides an overview of these challenges and opportunities.”