BANGLADESH: Islamic banks to follow unified Musharakah mode solution
By The Halal Journal Newsdesk (Source: Global Islamic Finance Magazine) published 4 months ago
Original Article Source: Global Islamic Finance Magazine
It has been reported that Islamic banks in many countries worldwide are going to follow a unified solution under 'Musharaka (partnership) mode' immediately to solve foreign bill purchase (FBP) and inland bill purchase (IBP) related issues Shariah compliantly.
Shariah-based banking has witnessed a significant growth in recent years in international market. At present seven private commercial banks are fully operating on Islamic way in Bangladesh while most of the local and foreign banks have Islamic banking wing.
Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) took the decision at a workshop arranged at a city hotel recently. Currently, the Islamic banks are following different inconsistent solutions in dealing with finance for foreign trade.
CSBIB Chairman Mufti Abdur Rahman inaugurated the day-long training workshop, which was moderated by its secretary general Md Mukhlesur Rahman and addressed, among others, by M Azizul Huq, an eminent Islamic banking consultant, Md Shamsul Huda, EVP of Islami Bank Bangladesh Ltd, SVP Khondokar Munirul Alam Al_Mamun, VP Md Shamsuddoha and Mahmud Hossain, Managing Director and CEO of Millennium Information Solution Limited (MISL). The function was attended by Shariah inspectors and Muraqibs of various banks.
They discussed principles, policies and workflows of the unified solution to implement it smoothly, effectively and immediately.
Earlier, CSBIB formed a technical committee to solve FBP and IBP related issues more Islamically and Shariah compliantly. Meeting 12 times, the committee drafted several solutions and CSBIB approved one of them under Musharaka (partnership) mode.
The speakers said that since conventional FBP and IBP were not permissible by Shariah and Islamic law, Islamic banks had been carrying out these operations through foreign bill negotiation (FBN), inland bill negotiation (IBN), Musharaka documentary bill (MDB), Bai as-Sarf modes. Now bankers, Islamic jurisprudents and Shariah experts were considering the new mode as more Shariah compliant.
Mufti Abdur Rahman stressed on making Islamic banking sector more dynamic through carrying further study by the Shariah Inspectors.
He urged the Islamic banks to actively take part in Mudaraba and Musharaka as their ideal investment modes. Classifying transactions into two parts-- financial transaction and real transaction, M Azizul Huq said any increase or decrease in the financial transaction would bear an interest while any increase or decrease in real transaction would not bear any interest, rather it would be profit or loss.
"We have to take up the real transaction instead of financial transaction, if we are interested in the pure Islamic transaction," he added.Thanking CSBIB for drawing up the new solution, Mahmud Hossain said his company MISL had been serving Islamic banking through 'Ababil' software for long.
He also expressed his eagerness to extend all-out support from MISL to Islamic banks in the field of application of FBP and IBP in new mode and discussed feasibility of incorporation of the new innovative product with their software solution.