Expert: Islamic banks can not keep up with the current laws

17/10/2012 09:10
Witness the banking arena in Iraq is expanding in the area of ​​the establishment of Islamic banks when there were 9 banks and two windows-governmental organizations so far and of these banks were able to compete with commercial banks and found most of the population tendencies.



This rapid development at a time when Islamic banks that managed to encourage state-owned banks to open Islamic windows due to the success of banking products which tell it faces significant challenges for the absence of a law works which prompted the central bank to raise the draft law in this regard to the Council of State in order to revision and approval of the validity of submitted for discussion and approval by the government and parliament.



In a bid to shed light on the most prominent of these challenges morning met with a banking expert specialist Dr. Sadiq Islamic banks Shammari to shed light on the most prominent of these challenges and ways to address them.



Shammari called in the introduction to his central bank to go to deal with Islamic banks mechanisms private suit and services it provides to customers, pointing out that the base of Islamic banks are expanding worldwide rapidly, which requires more flexibility in dealing central banks with Islamic banks Allarboah .



And relationship central banks Islamic banks said: Due to the lack of benefit Islamic banks from central banks as a last resort to secure sufficient liquidity when they need it, resorting Islamic banks to keep up high liquidity in Hzaúnha and this is reflected negatively on the profitability of banks and the profits IAH.



According Shammari need for central banks recourse to give Islamic banking loans well (without interest) for a period of very limited equivalent Maldy bank cash reserves and have this procedure when it needs the bank to liquidity or so they can be set up a fund involving Islamic banks with central banks any contribute to a limited extent proportion of their deposits follows that have the right to borrow from this fund is benefits, provided that the net use of these facilities is zero during a specified period of time can be seen to this measure as a form of insurance Takaful tie.



He added that central banks oblige banks all deposit a certain percentage of total deposits in the form of cash with central banks to maintain the financial position of the banks with protection to depositors for example in Iraq, 15 percent in Jordan 15 percent note that this percentage will come out of the container investment banks central banks sometimes issuing IOUs annual interest to finance the deficit given and as long as they benefit, the Islamic banks can not be handled by the mind away from the activity and on the grounds that it usefulness and there other management also considering central banks as a last to lend banks in return for interest, resort to banks when they need to liquidity, so the Islamic banks can not benefit from being in return for interest paid to the central banks, and central banks could appoint Islamic banks in the event of temporary liquidity need to be funded, interest-free and this requires a certain legislation.



As the central banks through its work in maintaining the depositors 'money and thus control policies granting credit in cases of inflation or deflation, it you select ceilings credit to banks in a certain period in order to reduce risks to banks and protect depositors' money where اتمييز between Islamic banks and conventional banks , note that the Islamic Bank handles investment financing activities in accordance with the principle of profit and loss, not lending ..



Shammari pointed out that central banks oblige all banks by determining capital adequacy ratio capital ratio to all deposits, according to the requirements of the Basel 2 where obliges banks by 12 percent did not differentiate between Islamic Bank and Bank of the traditional account for cover bank capital risk Alantmanah excluding current accounts بالنوعين where expenses are not considered deposits on Islamic banks loan money but are enhanced and support for property rights and it shares profit and loss



So banks should be excluded from this indicator Islamic. In addition to the need for the central banks can stimulate and encourage Islamic banks to establish or establish market between Islamic banks to facilitate liquidity management process between Islamic banks to be in place according to the rule of law, for being one of the main challenges faced by Islamic banks is not to provide liquidity if needed.



Indicating the importance of fostering a culture of occupational segregation as necessary for Islamic banks to continue in both human resource staff or the regulations and assessment staff to ensure continuity and development to be professionally and literally aware of the work Islamic banking after they are believers that work. Also has to be coordination and harmony between the various legitimate (no need for a reference) instead of the large number of interpretations and different confuses professional work and thus confuses the dealers.



Shammari stressed that the lifting of banking products requires efficient cadres capable of Ifta and banking experience as well as consolidate government support to open institutes and universities interested in the field of Islamic banking and its products. He concluded by saying that the work during the next phase requires the development of system management to suit the work of institutions drained Islamic, since many of them only buy software and systems, computer and solutions to manage risk without consistent with the nature of work of Islamic banks and their products (in speculation and Murabaha, vacation, sale) .



And alluded to the importance of establishing a framework and mechanisms of governance of banks and risk management systems and internal controls and implementation. As well as finding an effective mechanism to address inter challenges were behind the creation of an Islamic bank as the face of a silver lining to models application legitimate financial transactions and alternative Senior Islamic economics in the world and his ability to manage money and distributed to projects and programs varied in various economic sectors, especially productive ones, so as to contribute to the achievement of development economic and social development and improve the standard of living for humans as is the purpose and goal of development.


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