Could you provide a brief journey of how you arrived where you are today?
I’ve been a banker since my university graduation. I’ve worked in leading multinational commercial as well as development banks, both in Sri Lanka and overseas at senior management levels for most of my career. Interestingly, I was approached by Amana in 1994 to be the first CEO of the company. At that time I was in the senior management of ANZ Grindlays Bank, a top class international bank. I didn’t accept Amana’s offer as I had little knowledge of Islamic banking then, and was not quite sure whether the business model would work. So we mutually agreed to keep the door open for further discussions.
Ten years later, in 2004, Amana’s board of directors approached me again. By then I had acquired some basic knowledge of Islamic banking, appreciated its merits and universal value and had made a personal resolution to move my career away from riba-based banking. I left my job as the CEO and director of the country’s first private sector housing bank, NDB Housing Bank, and accepted the appointment at Amana.
What does your role involve?
Everything an MD/CEO has to do, and more. We’ve set ourselves a big, audacious vision to become a world class Islamic financial solutions provider in the fields of banking and insurance in Sri Lanka. This involves a paradigm shift in the way we operate, our business policies, our systems and processes, our products and services, and the way our people think and behave.
Amana has grown rapidly over the years. Now it’s time to bring in the best practices, benchmarks, streamline our operations and prepare ourselves to re-position the company as a world class Islamic bank.
What is your greatest achievement to date?
The decision I made in 2004 to quit working in a riba-based bank and join Islamic banking.
Which of your products/services deliver the best results?
The diminishing Musharakah product, because it meets the surging demand for Shariah compliant housing and property finance and has a structure that can protect the company from the loss of income due to any delayed repayments by customers. The other product is the Ijarah, which meets rising consumer demand for Islamic vehicle and equipment leases.
What are the strengths of your business?
We’ve made very discernible footprints in Sri Lanka’s financial sector, being the pioneer Islamic financial institution. Today, we are the market leader in Islamic financial services; we have a sound risk management culture and practice; a skilled and trusted board of directors; a competent Shariah Supervisory Council led by Sheik Taqi Usmani; and a professional corporate management team.
What are the factors contributing to the success of your company?
I think it’s a combination of our pioneering market status, the personal reputation of our directors, our unswerving commitment to Shariah compliance in everything that we do and more recently our concerted drive towards professional management systems.
What are the obstacles faced in running your business today?
Our main obstacle is the delay in getting a license to operate as a fully fledged Islamic commercial bank, which we applied for in 1997 and are still awaiting the regulatory approvals. The license will have a dramatic impact on our business in that it will enable us offer the wider range of Islamic commercial banking products and services which our customers are demanding.
There are also obstacles in the present legislative and fiscal frameworks, which inhibit the flow of tax benefits to customers taking Islamic finance products, unlike with conventional products. One such case is the double stamp duty levy applied to Islamic mortgages. There is a need to bring in appropriate legislative and fiscal changes in order to level the playing field for Islamic banking and insurance products to compete with conventional products.
Other obstacles include the supply-side constraints on competent human resources and Shariah scholars.
These are really challenges before us, rather than obstacles.
Where do you see the Islamic finance industry, maybe in the next five years?
I think the growing awareness of ethical banking and insurance worldwide and the resultant market demands will drive the industry to a higher level of sophistication and operational efficiency. The current players must ride on this phase and respond to the emerging challenges so that the industry is in a position to offer a competitive, ethical, viable and perhaps even a complementary alternative to the conventional system of banking, financing, insurance and capital market operations. There will be a greater dialogue among regulators and players and between the two systems.
Name one thing you would like to see change in the world of Islamic finance?
I would like to see not one thing change but several. To start with, a larger pool of Shariah scholars with cross-functional knowledge and skills; a faster rate of product development and innovation; products reaching consumers beyond the traditional Islamic markets; higher standards of management; greater dialogue with conventional players; a greater concerted effort by all players in the industry to clear current biases and misconceptions about the business model and industry practices.
Amana Investments has been the pioneer of Islamic financial services in Sri Lanka since 1997. It is the parent entity of a group of companies engaged in Islamic financial services including investment banking, fund management, Takaful insurance, stockbroking services, commodity broking, bullion trading and corporate advisory services.
The group is a robust trendsetter in Islamic financial services in Sri Lanka, it is expanding its network, and has a new vision to be a world class Islamic financial solutions provider in the country.
MCCA’s investments are primarily in the provision of funds for house purchase. Islamic economics is based on Shariah, the Islamic law. The basic objective of Shariah is to ensure general human well– being and socio-economic justice.