Bahrain and Malaysia are discussing which of the two countries should be the location for a proposed International Islamic Financial Market (IIFM), a Bahrain Monetary Agency (BMA) official said on Sunday.
BMA officials have said previously that the regulators had chosen Manama as the center for the US dollar-based Islamic money market, reported the Gulf News.
"Regulators from five Islamic countries and the Jeddah-based Islamic Development Bank (IDB) have agreed that Bahrain and Malaysia discuss the location of the IIFM," the official said.
"We are discussing with them whether it (IIFM) should be located in Bahrain or Malaysia." Bankers and regulators from Malaysia, Indonesia, Bahrain, Brunei, Sudan and the IDB met in Bahrain last month and reviewed technical issues on establishing an Islamic interbank market to meet increasing needs of Islamic banks and financial houses.
Islamic banks and financial houses do not pay or charge interest - the core of the Western banking system - as it is considered usury. Money is made instead by using a system of profit sharing from returns on approved investments.
Bahrain, which hosts around 18 Islamic banks and financial houses, last week issued the first Islamic government bills worth $25 million as part of its efforts to create the much-needed market, said the paper.
Bankers say that one of the major problems facing around 200 Islamic banks and financial houses serving 1.2 billion Muslims globally is the lack of means to manage their day-to-day liquidity requirements, according to the paper – Albawaba.com
