MANAMA: Greater co-operation, rather than competition, between the Middle East's Islamic financial institutions is necessary if the sector is to provide a real alternative to the conventional, international banks operating in the region.
That was the claim by Noor Islamic Bank chief executive Hussain Al Qemzi who was speaking at the Middle East Islamic Finance and Investment Conference in Dubai.
He said regional Islamic banks do not have the financial punch to challenge their larger competitors from the US, Europe and the Far East.
"If we are to challenge the conventional banks' entrenched position in international financial deals, we must develop the capacity to structure multi-currency and cross-border transactions and to build scale," he said.
"To do that, we need to build deeper relationships between the key markets and between individual banks. Only then, will we be better placed to compete on a global scale.
"I have been asked many times what is it that international banks do well? The answer is simple. They leverage the relationships they have with banks they know well. Why can't Islamic banks do this?"
"At Noor, it is a model we have employed successfully in Turkey, where we have worked closely with other banks to lead manage and arrange more than $2 billion of capital in finance market deals.
"More than 55 institutions from 15 countries, across Europe, Asia, Africa and the Middle East, have participated. If it can be done in Turkey, it can be done anywhere," he added.
He also urged the Islamic finance industry to work together to overcome differences in interpretation of Sharia compliance and to develop new and innovative products and services, which would allow Islamic banks to offer a true alternative to conventional banking.
"As we acknowledge our differences in the interpretation of Sharia principles, we must also acknowledge that these differences cannot be used as an excuse for our industry not to engage in open and free business," Mr Al Qemzi said.
"The time has come for us to stop focusing on our differences as reasons for not doing business.
"It is time to talk about how Islamic finance can contribute to long-term inclusive, equitable and sustainable economic growth not just here, in the Middle East, but in every country across the globe.
(Gulf Daily News / 20 April 2012)
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Alfalah Consulting - Kuala Lumpur:
www.alfalahconsulting.com
Islamic Investment Malaysia:
www.islamic-invest-malaysia.com
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