Maybank Philippines and a foreign company have expressed interest in going into Islamic banking in the country, according to the Bangko Sentral ng Pilipinas.
In a press conference, BSP Assistant Governor Arifa Ala said Maybank intends to apply for an Islamic banking license and it is expected to submit its application this month.
“We’ve been discussing with them the requirements,” Ala said
Maybank Philippines is a member of the Maybank Group, the largest bank in Malaysia in terms of assets and the fourth biggest in Southeast Asia.
Apart from Maybank, the BSP official said a foreign company is also interested in joining the country’s Islamic banking sector. There are only two players in this sector at present: Al-Amanah Islamic Investment Bank of the Philippines and the Islamic branch of the Center for Agriculture and Rural Development (CARD) Bank Inc.
“We have held meetings with them already, discussing the requirements for establishing the Islamic banking unit,” she added.
In 2019, former President Rodrigo Duterte signed Republic Act 11439 which mandates the BSP to exercise regulatory powers and supervision over the operations of Islamic banks.
Islamic banking, as defined in RA 11439, refers to a banking business with objectives and operations that do not involve interest (riba) that is prohibited by the Islamic or Shari’ah Law, and which conducts its business following the principles of the Shari’ah.
The enactment of RA 11439 provided a legal framework that had been missing for years.
Ala said the lack of a legal framework and necessary infrastructure in the past hampered the development of a vibrant Islamic banking ecosystem in the Philippines, where the Muslim population accounts for about 10 percent of Filipinos.
BSP data showed that 29 percent of the cities and municipalities in the Philippines remain unbanked, with the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) being the most unbanked region.
Islamic banking and finance can promote inclusive finance by making it available to groups that avoid using existing conventional banking facilities due to their faith.
It can also be attractive to non-Muslims, particularly investors within or outside the Philippines who may be looking for new asset classes, instruments, and products to diversify their portfolios.— Inquirer.Net
