Banking Interest

Mar 18, 2008 (LBO) – Former Malaysian finance minister and entrepreneur Daim Zainuddin is hunting in Sri Lanka's banking and energy sectors for opportunities, the business magnate said on a flying visit to Colombo. Daim said he is looking at either opening a bank or buying into an existing one, after coming to Sri Lanka on the invitation of Central Bank Governor Nivard Cabraal.

"But there are some restrictions here, where you can hold only 20 percent," he told LBO shortly before meeting Sri Lanka president Mahinda Rajapakse and after a meeting Governor Cabraal Monday.

"I am looking at various options for me to come and invest."

Turning Around

Daim's Swiss based ICB Financial Holdings bought a 50 percent stake in Bangladesh's troubled Oriental Bank last month. The bank was also chased by Sri Lanka's Hatton National Bank who gave a conditional offer and dropped out of the race.

"It is an Islamic bank, so if you lose you lose," says Daim. "They share in the profit. They also share in the losses in Islamic banking."

In Islamic banking 'interest' is not charged as in conventional banking but 'profits shares' are built into trade finance and other contracts.

The central bank i