Islamic Banking Explored

Media Release
30 May, 2006

Islamic Banking Explored

Tired of high interest rates? You might consider Islamic banking, an alternative financial system based on the belief that charging interest is a sin.

The University of Auckland's New Zealand Asia Institute and ASEAN-New Zealand Combined Business Council is next month hosting a business lunch for a delegation of financial experts from Malaysia. During the lunch they will discuss the principles of Islamic banking, a financial model that is becoming increasingly mainstream in the global trading environment.

More than 265 Islamic banks and financial institutions operate in around 40 countries, including Britain, which established its first purely Islamic bank in 2004. New Zealand's Muslim population is estimated at around 50,000. This country's ongoing talks with Malaysia about a Free Trade Agreement present a timely opportunity to discuss Islamic banking here. Similarly, Malaysia's aim to become a hub for halal meat processing creates an opportunity for increased trading and investment among Muslims who do business in and outside of New Zealand.

Islamic banking adheres to the tenets of Koranic laws. Under Islamic law (Sharia), the collection and payment of interest (riba) is considered sinful (haram). As an alternative, Islamic banking works on a leasing scheme, in which the bank buys a product and leases it back to the customer at a fixed price until the product is paid for.

In further keeping with Koranic laws, Islamic banking does not involve companies associated with tobacco, alcohol or pornography.

The distinguished speakers and their topics of discussion are:

'Labuan International Offshore Financial Centre (IOFC)', by Dato' Azizan Abdul Rahman, Director-General, Labuan Offshore Financial Services Authority (LOFSA);

'Islamic banking and finance', by Bakaruddin Ishak, Director, Deparment of Islamic Banking & Takaful, Bank Negara Malaysia (Malaysian Reserve Bank)

'Making Islamic banks work in the global market', by Professor A Ghaffar Ismail, Professor of Economics, The National University of Malaysia

And 'Integrating Islamic finance into the global financial system', by Professor Rifaat Ahmed Abdel Karim, Secretary-General, Islamic Financial Services Board, Malaysia

The lunch will be held on 14 June from 12-2:30pm at the Northern Club, Princes Street, Auckland. The event is open to the public ($20.00 registration fee) and free to media. Please register by 9 June. RSVP to nzai@auckland.ac.nz.

Register by:
- Cheque made out to 'The University of Auckland' mailed to New Zealand Asia Institute, The University of Auckland, Private Bag 92019, Auckland
- Credit card, by emailing details to nzai@auckland.ac.nz or by fax to (09) 308 2312

ENDS