Agrobank intends to go fully Islamic by 2015

AGROBANK (formerly Bank Pertanian Malaysia Bhd), which currently offers both conventional and Islamic banking services, will go fully Islamic by 2015, said managing director Datuk Ahmad Said.

The bank has been offering Islamic banking products since it was corporatised in 2008.

“They are popular among non-Muslims with the ratio presently 60:40 in favour of Islamic banking. We have actually targeted to go fully Islamic this year, but we felt we have to continue with conventional banking for some more years as we are not that stable.

“So, we are doing it slowly by reducing conventional banking products. It will also be costly if we change abruptly as we have to cancel all previous agreements and sign new ones,” he told reporters in Tanah Merah, Kelantan, on Sunday.

Ahmad was speaking after the opening of the bank’s new building by Deputy Finance Minister Datuk Dr Awang Adek Hussin. Also present was its chief financial officer Kiswah Mohammad.

Agrobank at present has 167 branches throughout the country.

“New branches are set up annually depending on our planning. Our target this year is 10 including Kubang Kerian, Kota Baru, Pahang, Johor and Sabah.

“However, the Finance Ministry has requested us to open in districts which presently have no banks, especially in Sabah and Sarawak. So, the number (of new openings) this year will be more than 10,” Ahmad said.

He added, however, that the services would not necessarily be full-fledged branches, but could come in as electronic banking centres, mobile banks or representatives.

source : bttimes

Malaysian bank governor stresses strong liquidity management

Islamic financial institutions need to address their ability to manage liquidity urgently, a Malaysian official said here on Tuesday.

Governor of Malaysia’s central bank Zeti Akhtar Aziz said at a conference on financial stability that the recent financial crisis in advanced economies had demonstrated the consequences of liquidity constraints.

The turmoil had also underscored the importance of a strong and well-developed liquidity management infrastructure, added Zeti.

In order to facilitate effective cross-border liquidity management, Zeti said that the Islamic Financial Services Board (IFSB), in collaboration with the Islamic Development Bank (IDB), had established a liquidity management task force.

Hoping that the framework developed by the task force could be set in place in 2010, Zeti also called for the regulatory and supervisory framework to be strengthened.

The IFSB is an international standard-setting organization that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry.

The IDB is an international financial institution established in pursuance of the Declaration of Intent issued by the Conference of Finance Ministers of Muslim Countries in December 1973.

Touching on the development of Islamic banking in Malaysia, Zeti said the system had become a vibrant one in the country with banking assets accounting for 18.8 percent of the total banking assets.

Zeti noted that Malaysia had an efficient functioning Islamic money market traded in the domestic currency with greater monetary flexibility in the system, drawing wider participation from the international financial community.

Zeti also said that when Islamic finance continued to become an integral part of the global financial system, the current scope of cooperation framework could be broadened to deal with confronting new challenges.

sourece : pdo