The International Seminar on ‘The Global Financial Crisis and the Strength of Islamic Banking System’ organized by Islamic Banks Consultative Forum (IBCF) was inaugurated on 24 May, 2011 at Sonargaon Hotel. IDB President Dr. Ahmad Mohamed Ali inaugurated the Seminar as the Chief Guest. Dr. Atiur Rahman, Governor, Bangladesh Bank was present in the session as Special Guest. Presided Over by Prof. Abu Nasser Muhammad Abduz Zaher, Chairman, IBCF, Nazrul Islam Mozumdar, Vice Chairman of IBCF addressed the welcome speech and Dr. Ausaf Ahmed, Former Head, Special Assignment, IRTI, IDB presented the key notepaper.
IDB President Dr. Ahmad Mohamed Ali in his speech as Chief Guest said that the recent global financial crisis has raised concerns about the long-term stability of the global financial system. Complex financial products like Collateralized Debt Obligations (CDOs) and Credit Default Swaps (CDSs) which evolved in the last few decades, are now rejected by many sophisticated investors and many asset-pricing models are being questioned. Moreover, the financial crisis also revealed many shortcomings in the current risk management systems and practices.
He said, despite a few Sukuk defaults, there were no bank failures. In this context, since Islamic banks are anchored in the real economy and are barred from investing in financial derivatives, they remained resilient in the face of the financial crisis. Islamic banking provides a relatively stable Shari’ah compliant alternative to the financial needs of the society. This stability demonstrated by Islamic banks during the recent financial crisis in comparison with their conventional counterparts, has already been recognized.
Besides its stability, the Islamic financial services industry is also expanding its scope by including microfinance. As you are well aware, the system of microfinance has been designed to give low income individuals in communities quick and easy access to socio-economic services, opportunities for self-employment and thus the chance to uplift themselves out of poverty. This idea was developed in Bangladesh.
As a result of IBBL’s success in Islamic banking, six more full-fledged Islamic banks have come into existence in Bangladesh and thirteen (13) traditional banks are rendering Islamic banking services either through branches or windows. Here, I would like to appreciate the important role that Islamic Banks Consultative Forum (IBCF) played to strengthen the Islamic financial industry.
Bangladesh Bank Governor Dr. Atiur Rahman in his speech said that the profit and loss sharing nature of of liabilities of Islmic Banks is a good safeguard for against solvency risks. He said that the strength of Islamic Banking are now attracting conventional banks in increasing numbers including large global ones into Islamic moods of financial services. He said that in Bangladesh Islamic Banking constituted 18.5 percent of deposit and 19.7 percent of advances of the Banking system in 2010.