Swaziland is reportedly considering the establishment of the country’s first Islamic bank, with Qatar National Bank (QNB) said to be a frontrunner for its set up.
The move is significant in two ways — Firstly, in that it would mark the African nation’s entry into Islamic finance; and secondly, it could help Qatari conventional banks such as QNB to circumvent orders to shut down their Islamic operations last year.
Furthermore, as noted by Yousef Hussain Kamal, QNB’s chairman and also Qatar’s minister of finance and economy: “Though we miss our Islamic division, QNB is pretty confident it will be able to recoup what it actually missed through its activities,” possibly signaling that the bank would have rather not give up its Islamic operations, despite seeing a halving of the business’s profits in 2011. In 2010, the bank’s Islamic division earned around QAR900 million (US$247.32 million)-worth of profit.
Although the Qatar Central Bank has explicitly ordered Qatar’s conventional banks with Islamic operations to shut down those business, do those limitations cover any foreign Islamic operations that those conventional banks may have?
Whatever the consequence may be, it appears that Swaziland is not short of Middle Eastern suitors for the establishment of Islamic banks in the country. According to Martin Dlamini, the governor of the Central Bank of Swaziland, Middle East investors have expressed interest in establishing Islamic banks in the country, although there has been no submission of formal documentation on the matter.
Only time will tell whether any of these talks will come to fruition and if Swaziland could mark the next African country to enter into Islamic finance.
source: Islamic finance News