Leading UAE bank keen to explore Islamic finance arena in SL

Thursday, 1 August 2013 01:19 -     - {{hitsCtrl.values.hits}}

By Shabiya Ali Ahlam A leading bank in United Arab Emirates (UAE) last week expressed interest in partnering with Sri Lanka to grow its international foot print by tapping into the country’s Islamic finance sphere. Emirates NBD Capital, Dubai, whose officials were in Colombo last week to sign the $200 million syndicate loan with the Bank of Ceylon (BOC), told journalists that the bank is looking for partners to promote the idea of “Sukuk” in Sri Lanka. Sukuk is an Islamic financial certificate, similar to a bond in Western finance that complies with Sharia, Islamic religious law. Having its roots deeply embedded in the areas of investment banking solutions, loan syndication, bonds and Islamic finance in Middle East and the Indian subcontinent, Emirates NBD revealed that it is already in conversation with the Central Bank of Sri Lanka to formulate a suitable structure to take this forward. Noting the growing trade between the Indian subcontinent and the Middle East, Wajid said: “Looking at the liquidity in the Middle East region, particularly in the Islamic banking sector, by working together we can pump this liquidity to benefit both the regions.” When questioned as to why Emirates NBD is interested in Islamic finance over conventional banking in the nation, Wajid said Islamic banking is ideal for countries such as Sri Lanka as it is on the lookout for liquidity. “Conventional banking has been doing well in this part of the world. In Islamic banking, liquidity is abundant. However many issuers are reluctant to tap into this since it requires restructuring of processes. Emirates NBD recognise the potential in this area for countries such like Sri Lanka. Therefore we want to be a part of that growth by being a bridge between lenders in Islamic structures, and institutions that are willing to borrow from those structures,” explained Wajid. Emirates NBD Capital is a product of the merger between Emirates Bank International (EBI) and the National Bank of Dubai (NBD), which took place in 2007, making it the fourth largest bank in the UAE. The bank has operations in the UAE, Kingdom of Saudi Arabia (KSA), Qatar, the United Kingdom (UK), Singapore and Jersey, and has representative offices in India and Iran.