The Bahrain Monetary Agency (BMA), the Kingdom of Bahrain’s central bank and regulator of the financial services industry, announced today the establishment of a special fund to finance research, education and training in Islamic finance.
The BMA is partnering with 8 leading Islamic banks in Bahrain in the establishment of the Waqf Fund, which is the first of its kind in the region. The effort was spearheaded by the BMA to support the advancement of the rapidly growing Islamic finance industry and further broaden the infrastructure for the industry.
The founding members, who have contributed the Waqf Fund’s initial principal of US$4.6 million, have signed an agreement to establish, control and manage the Fund, which will be administered by the Bahrain Institute of Banking & Finance (BIBF).
Besides the BMA, the other founding members are Unicorn Investment Bank, Bahrain Islamic Bank, Kuwait Finance House (Bahrain), AlBaraka Banking Group, Arcapita Bank, ABC Islamic Bank, Shamil Bank and Gulf Finance House.
Following the agreement signing at the BMA premises on 19th June 2006, a general assembly meeting of the founding members was held to elect the Fund’s Board of Trustees, which comprises one representative of each of the nine founders. Mr. Khalid Hamad, Executive Director, Banking Supervision, at the BMA, was elected Chairman of the Board of Trustees, while Mr. Taher Makkiyah, Chief Operating Officer of Unicorn Investment Bank, was elected Vice Chairman.
“The establishment of the Waqf Fund is a major milestone in the continued development of Bahrain’s Islamic financial services industry. It is also in keeping with BMA’s vision for and commitment towards the industry’s long term success, for which knowledge, skills and experience are critical factors,” said Mr. Hamad.
The Fund principal will be held in an account and the accruing income will be utilized for financing and publishing research, studies and surveys; making available specialist training workshops and other educational opportunities; organizing discussions and debates on Islamic finance and Shari’a issues; and undertaking other activities that further the mission of the Fund.
“We expect the Fund principal to grow as more Islamic banks and financial institutions, including takaful (Islamic insurance) companies, lend their support to this venture, which is aimed at serving the industry as a whole,” said Mr. Hamad.
The Fund will complement the activities of the existing Islamic finance industry support institutions, namely Accounting & Auditing Organisation for Islamic Financial Institutions (AAOIFI), International Islamic Financial Market (IIFM), Islamic International Rating Agency (IIRA), General Council for Islamic Banks and Financial Institutions (CIBAFI) and the BIBF, whose Islamic Learning Centre is a well-established and recognized leader in Islamic education and training.
“These industry support institutions, with their individual mandates, are playing an important role in the development of the global Islamic finance industry. The Fund, with its focus on research, education and training, is envisioned to further broaden the availability of support services required by the industry as it pursues sustainable growth,” said Mr. Hamad.
He thanked the industry for supporting the BMA in its efforts to maintain Bahrain’s status as the world’s leading Islamic financial centre and for recognizing the need for collective effort to advance the industry.