Banking Ties

Apr 10, 2011 (LBO) – Amana Bank, Sri Lanka’s first licensed commercial bank operating on Islamic banking principles will receive technical support from Bank Islam Malaysia which has taken a 20 percent stake, a media report said. Malaysia is a centre for Islamic finance, where banking is conducted under Sharia law, which prohibits the charging of interest.

The report quoted Amana Bank managing director Faizal Salieh as saying that the bank now had 14 branches in Sri Lanka and planned to have 60 to 65 outlets in five years and go public in two years in line with local regulations.

Bank Islam Malaysia had signed a technical advisory services agreement to transfer Islamic banking expertise to Amana Bank, Malaysia’s The Star newspaper said.

The newspaper said the Malaysian bank had a 20 percent stake in Amana Bank which came from a 21.6 million Malaysia ringgit investment in new shares and a swap of existing shares in Amana Investments, a finance company.

Other Amana Bank’s partners were Islamic Development Bank (10 percent) and AB Bank Ltd of Bangladesh (15 percent).

A banking license was issued by the Sri Lanka’s regulator allowing assets and liabilities of the finance company to be turned over to th