Regional Role

July 28, 2010 (LBO) – Sri Lanka could issue Islamic finance sovereign bonds or ‘Sukuks’ and take the lead in becoming a regional centre for Islamic financial services which other countries with less experience are aiming for, an official said. “Australia and Mauritius have said they want to be hubs for Islamic finance,” says Rushdi Siddiqui, head of global Islamic financial markets at Thomson Reuters, a news service.

“Sri Lanka already has more than a decade of experience in Islamic finance. Sri Lanka has just approved an Islamic bank. That means regulators are open-minded.”

Sri Lanka’s central bank has just given provisional approval to set up Amana Bank which is promoted by Amana Investments, a group which has been in Islamic finance for more than a decade.

Several Sri Lankan banks also have ‘Islamic banking’ windows.

“You could be a bridge to Maldives, Mauritius and South India,” Siddiqui said on the sidelines of an Islamic finance conference organized by UTO Educonsult, a consultancy.

Siddiqui says Sri Lanka could issue a ‘Sukuk’ or sovereign bond compliant with Shariah or Muslim religious law which could raise the profile of the island among Gulf countries.

“You could do a parallel rupee and dollar denomin