First Virtual Islamic Bank Takes Shape in the Gulf
The first virtual bank run on Islamic principles is being set up by a group of investors in the Gulf Arab states, the Gulf Finance House (GFH) announced Wednesday.
The web bank with paid up capital of 32.5 million dollars will be registered in Bahrain, pending approval from the archipelago's central bank, the Bahrain Monetary Agency.
Esam Janahi, chief executive of BFH, a Bahrain-based investment bank, said the launch would be made before the end of the year.
"We are very clear about the concept and what we have to offer. We are not just another portal or dotcom site," he said.
Among other investors are Qatar-based Sovereign International Co Ltd, the Injazat Technology Fund run from Jeddah, and the Shamil Bank of Bahrain.
According to experts, Islamic financial institutions have a total of 140 billion dollars invested in more than 40 countries. Those investments are growing annually by 15 to 20 percent.
Interest is banned under the Islamic banking system, as the religion forbids usury.
"Murabaha" is a classic practice of Islamic banking, under which a borrower has to pay an extra amount agreed in advance. This amount is regarded as a "reward" for the risk taken by the bank.
Islamic banks also take part in joint investments, sharing in the profits or the losses of a business venture – DUBAI (AFP)
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