Saturday May 22, 2010

New British govt committed to boosting Islamic finance

KUALA LUMPUR: The change of government in Britain has not changed the nation’s commitment towards Islamic finance and banking.

Sir Iqbal Sacranie, who headed the delegation from the Muslim Council of Britain (MCB) at the recently concluded World Islamic Economic Forum (WIEF), said the new coalition government had indicated that it would still support efforts in developing Islamic finance in Britain as it was beneficial to the country.

“From what we have heard, they are committed to it. It is good for the country. It is beneficial. The parties (Conservatives and Liberal Democrats) have indicated their support for Islamic finance,” he told The Star.

Iqbal said the growth of Islamic finance had been substantial in the past few years, with then Prime Minister Gordon Brown saying he wanted to see Britain as the gateway for Islamic finance.

He said the British government had been supportive in making changes to legislation related to Islamic finance, and had passed an amendment to address the issue of double taxation on mortgages.

“Issues like sukuk and others, you need laws and they are looking into it. It is very encouraging because it benefits many.

“Islamic finance is not just for Muslims, but for those who believe in ethical finance,” he said.

Iqbal said there were lessons to be learnt from the world economic crisis, as countries practising the Islamic financial model were not as badly hit as those practising conventional banking.

“The economic crisis in the West is really bad. It is not so bad in Asia, with India, China and others emerging.

“Conventional banking has been hit badly, whereas those following the Islamic model were not affected as much,” he said.

The MCB delegation to the WIEF comprised almost 60 people, about double the turnout in Jakarta last year.

Iqbal said the WIEF had built up momentum since it first started six years ago, with the forum being a good platform for businessmen to network.

MCB business and economics committee chairman Mohammed Amin said there were five Islamic banks in London – one retail bank and four investment banks.

There is also a Takaful company in Britain, he said.

He said Islamic banking was mostly for corporate and investment transactions, with the retail sector faring rather poorly.

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