In preparation for the integration of Islamic Capital Markets, the Bank of Mauritius intends to develop a structure that will deal with commodity markets that are Shariah compliant.

The Bank is confident that this new form of banking will help to strengthen the country’s financial sector by tapping into the Gulf financial markets, says BOM Governor, Rundheersing Bheenick.

 He explains that traditional treasury products that are available for long term or short term liquidity management purposes are based on the rates of interest. With a view to accommodating Shariah compliant products there is a need to have products that are based on profit sharing and surplus sharing.”

BOM Governor, Bheenick says: “As long as a product is Shariah compliant and is already operating in a particular jurisdiction, we will not oppose it. Our aim is to become a full fledged member of the Islamic Financial Services Board and be in a position to tap into the immense financial potential it offers. We need to move fast as this would strengthen our offshore financial sector. ”

Bheenick was speaking at a seminar on Islamic Capital Markets, organised and hosted by Islamic Financial Services Board , BoM and Financial Service Commission, at the  Meridien Hotel in Pointe-aux-Piments on Tuesday.

Finance Minister, Rama Sithanen, is all for what is “good business” and says that the widening of instruments in the financial sector will bring good competition to traditional financial vehicles.  He made it clear  that there was nothing political or religious about Islamic banking. “It is only an alternative form of financing for savers and investors ,” he says.

IFSB Secretary General, Dr Rifaat Ahmed Abdel Karim, is convinced that Mauritius can find a niche in the petro $ 3.5 trillion Islamic Capital Markets.  However,, he feels, the island“ faces the challenge of dealing with the prudential, legal, regulatory and tax framework which should be adapted to Islamic finance.”