 President of the Chittagong Chamber of Commerce and Industry (CCCI) M.A. Latif MP said Islamic banking trade finance now-a-days has become very popular because it offers an excellent alternative of financing to the customers particularly to the muslim ones who have reservation against interest based conventional banking system.
"It has been estimated that Islamic banking will have a market value of $ 4 trillion by 2010. It is expected to capture about 40-50 per cent of the total savings of 1.3 billion Muslims worldwide within the next eight to ten years", M.A. Latif MP made the comments while inaugurating a daylong ICCB workshop on "International Trade Payment: Islamic Trade Finance" at Peninsula Hotel in Chittagong organized for the bankers yesterday. He said trade finance and payment is a very old issue in business. Trade finance plays an important role in facilitating trade transaction between buyers and sellers. It is a form of short term banking facility to help the buyers and or sellers in managing its required cash flow in the short run. For decades banks worldwide have been practicing this conventional method of trade financing until recent years with emergence of the Islamic banking system.
CCCI President said the fundamental difference between the two is in their very concept. Islamic banking or trade finance is profit or loss concerned while the conventional banking system is fixed interest based. In international trade transaction, compliance issues and documentary requirements for Islamic trade finance are quite same of that of conventional banking system except that it operates in accordance with the rules of Shariah, known as fiqh al-Muamalat (Islamic rules on transactions). The Islamic banking industry in Bangladesh also continues to show strong growth since its inception in 1983. At present, out of 48 banks, 6 private commercial banks are operating as full-fledged Islamic banks. Besides 21 branches of 10 conventional banks are engaged in Islamic banking, Latif said.
|