WITH an overwhelming 221 votes, the House of Representatives has approved on third and final reading a bill principally authored by Speaker Gloria Macapagal-Arroyo proposing the establishment of a regulatory framework for Islamic banks to attract investments in the country’s banking sector.
House Bill (HB) No. 8281, “An Act Providing for the Regulation and Organization of Islamic Banks,” principally authored by former Anak Mindanao party-list Rep. Sitti Djalia Turabin-Hataman and Arroyo, seeks to regulate and organize Islamic banks by mandating the Bangko Sentral ng Pilipinas (BSP) to supervise, license and regulate the operations of Islamic banks.
Anak Mindanao party-list Rep. Amihilda Sangcopan, who succeeded Hataman, said the bill refers to an Islamic bank as a business whose objectives and operations do not involve interest (riba), which is prohibited by the Shari’ah and which conducts its business transactions in accordance to Shari’ah principles.
Anak Mindanao is also being represented this 17th Congress by its second nominee, Rep. Makmod Mending.
“We’d like to invite everyone, Muslim and non-Muslims, to take a closer look at Islamic banking as an alternative-financing modality, instrument and facility. This is very good for the economy, considering the enormous potentials of the halal industry. As we enter the ASEAN integration, we need to attain financial inclusion for the Muslims in the country,” said Hataman for her part.
This bill, according to Sangcopan, provides that the Monetary Board (MB) may authorize the establishment of Islamic banks and allows conventional banks to engage in Islamic banking, provided that these banks create a system that will separate their Islamic banking transactions from their regular business.
The Islamic banks shall be licensed and regulated in the same manner as a universal bank and the BSP shall issue the necessary rules and regulations governing Islamic banking.
Under the measure, Islamic banks are allowed to perform banking services, such as accepting or creating current, savings accounts and investment accounts, accept foreign currency deposits, and acts as a correspondent banks and institutions among others.