Islamic banking is not for Muslims alone
The Qatar International Islamic Bank (QIIB) is keen to tap the vast expatriate population in the country, non-Muslims in particular. QIIB strategists hope to reach out to the expatriate communities by spreading general awareness about Islamic banking.
Islamic banking is not for Muslims alone. This is the first and foremost thing that needs to be made clear, says Abdul Basit Al Sheibi, general manager of QIIB. The basic difference between conventional and Islamic banking is that the latter’s focus is on making a society savings-oriented rather than encouraging people to spend. “In that sense, you can say that Islamic banks basically follow the concept of investment banking as they do not preach and encourage spending,” stresses Abdul Basit. And, that is precisely the reason why Islamic banks do not lend. That they do not deal in interest-based banking, is common knowledge. QIIB, says the general manager, is the only bank in the country that shares profits with customers four times in a year, on a quarterly basis. Other banks disburse returns twice a year. Return by way of profits is 4.25 per cent annual on term deposits of a year. The percentage is four for six-month deposits and 3.5 and 3.25 per cent, respectively, for three and one month deposits. Savings bank deposits carry a return (profits) of three per cent a year. Anyone can open term and savings deposit accounts with QIIB, says the GM. As conventional banks have been permitted to set up Islamic banking windows and some have been allowed to open full-fledged Islamic banking branches in the country, the competition has become fierce. “It is a good sign, though, for the opening of so many Islamic banking windows and branches point to the fact that there is growing demand for its products and services,” says Abdul Basit. Additionally, the competition has prompted us to learn and enhance our own products and services, he adds. Qatar was the only country in 1991 to have two Islamic banks, he said. Islamic banking is growing at a rate of 15 per cent worldwide annually. The figure is much lower for traditional banks. There are an estimated 235 Islamic banks in some 40 countries, including outside the Muslim world. Their total assets were worth $250bn until recently. However, with the opening of Islamic banking windows and full fledged branches by some conventional banks around the world, the assets have risen to $350bn presently, said Abdul Basit. Bahrain continues to be the country with the maximum number of Islamic banks.
