MANILA –
President Rodrigo Duterte have recently signed into law a measure that
authorizes the expansion of Islamic banking system in the Philippines.
Republic Act 11439, signed by President Duterte on Aug. 22, mandates the
Monetary Board (MB) to authorize the establishment of Islamic banks in the
country and to allow conventional banks to engage in Islamic banking
arrangements.
Under the newly-signed law, the Bangko Sentral ng Pilipinas will exercise
regulatory powers and supervision over the operations of Islamic banks and
shall issue the implementing rules and regulations on Islamic banking.
Among the banking services the Islamic banks may perform are the following:
1.) Accept or create current accounts;
2.) Accept savings accounts for safekeeping or custody with no participation in
profit and loss except unless otherwise authorized by the account holders to be
invested;
3.) Accept investment accounts;
4.) Accept foreign currency deposits;
5.) Act as correspondent of banks and institutions to handle remittances or any
fund transfers;
6.) Accept drafts and issue letters of credit or letters of guarantee,
negotiate notes and bills of exchange and other evidence of indebtedness,
provided that such financial instruments are in accordance with the principles
of Shari’ah;
7.) Act as collection agent insofar as payment orders, bills of exchange or
other commercial documents covering Shari’ah compliant transactions;
8.) Provide Shari’ah compliant financing contracts and structures;
9.) Handle storage operations for goods or commodity financing secured by
warehouse receipts presented to the Islamic bank;
10.) Issue shares for the account of institutions and companies assisted by the
Islamic bank in meeting subscription calls or augmenting their capital and or
fund requirements as may be allowed by law; and
11.) Undertake various investments in all transactions allowed by Shari’ah
principles and such other banking services as may be authorized by the MB.
Currently, only the Al-Amanah Islamic Investment Bank of the Philippines, which
was created through Republic Act 6848 or the Charter of the Al-Amanah Islamic
Bank of the Philippines of 1990, is the existing bank in the country that
offers Islamic banking services./PN
