June 16, 2011 (LBO) – Sri Lanka’s Commercial Bank of Ceylon said it is starting an alternative banking services compliant with Islamic Sharia law, with a three member committee of scholars to ensure compliance. “As one of Sri Lanka’s largest private banks it is our obligation to ensure that the services the unit provides are fully compliant with the tenets of the Sharia,” managing director Amitha Gooneratne said in a statement.
M M A Mubarak, Fazil Farook and M M Murshid, from Sri Lanka’s All Ceylon Jamiyyathul Ulama will be on the Sharia board.
Commercial Bank will offer deposit products such as ˜Mudaraba’ savings accounts and ˜Mudaraba’ investment accounts’ and asset products such as ˜Murabaha,’ ˜Musharaka,’ ˜Diminishing Musharaka,’ and ˜Ijara’ leasing and import financing.
The bank said the products operate on the Islamic principle of both the bank and the customer sharing returns as well as risks.
Mudaraba, which is a form of profit sharing investment, is a partnership where one partner provides full capital while the other manages the business.
Any profit made using the funds is divisible between the customer and the Bank at a predetermined ratio agreed