Could you provide a brief journey of how you arrived where you are today?
After working at ANZ Grindlays Bank, I became chief operating officer with the National Development Bank (NDB). While I enjoyed the challenges at NDB, I was becoming increasingly aware of the phenomenal growth of Islamic banking in Malaysia and the Middle East as an alternative business model. I found the Shariah basis for it impeccably sound and compelling. In 2004, Amana Investments contacted me and offered me the managing director’s position.
What does your role involve?
Besides having to drive the business growth of the company on both sides of the balance sheet and monitoring the performance of our subsidiaries from a return on investment perspective, the real mission critical challenges since 2005 were developing and implementing an appropriate set of strategies to re-order and enhance the quality and efficacy of our internal operations, business policies and processes; improve our external relations, changing the organization’s culture from an unregulated ‘investment house’ culture towards a regulated ‘banking’ culture; changing peoples’ mindsets both at the company level and regulatory level; convincing the regulators on the value additions we could bring to the economy as an Islamic bank; identifying and selecting the right mix of long term strategic partners to form the new Amana Bank and now steering a multi-threaded project plan to launch the bank by early next year.
What is your greatest achievement to date?
That would be when Amana Bank is finally launched. For the time being, I should say the award of the provisional banking license in October 2008, the raising of the required capital with a fine mix of international strategic partners of the caliber of Bank Islam Malaysia, AB Bank Limited, Bangladesh and Islamic Development Bank, Saudi Arabia against the background of the global financial crisis and Sri Lanka’s country risk ratings at the time, and finally the decision made by the Monetary Board of the Central Bank of Sri Lanka to approve the commercial banking license this year.
Which of your products/services deliver the best results?
I think it is the Diminishing Musharakah because of the way it is structured. Firstly it is highly preferred by Shariah scholars as a truly risk bearing product, it has a clearly diminishing step by step repayment structure and the provision in product feature to charge overstay rentals arrests any decline in revenue to the bank due to delayed payments by the customer. The product also meets the long term asset financing needs of our customers.
What are the strengths of your business?
Our people, within whom are embedded the real value of our balance sheet; our customers who have implicit trust and confidence in our brand which underwrites our unswerving commitment to uphold Shariah compliance in all our products, services and transactions; and our strategic partners.
What are the factors contributing to the success of your company?
The ‘first mover’ advantage we have over the competition and the strong commitment of the board of directors and the senior management not to compromise on the Shariah principles that govern our transactions (we have a ‘zero tolerance’ Shariah risk management framework and a Shariah council with reputed international scholars).
What are the obstacles faced in running your business today?
There are obstacles still in the regulatory, fiscal and legislative frameworks. While the banking and insurance regulations have been tweaked to provide for Islamic products, the core regulations require further appropriate changes to create a true level playing field between Islamic and conventional operators. There are restrictions in the tax statutes that require changes in order to provide customers of Islamic financial institutions with the same tax treatments afforded to their conventional counterparts. Currently some tax officials apply substance over form on an arbitrary basis but the form should be fixed permanently if Islamic finance is to see sustainable growth in the future. Another fundamental problem is the lack of Shariah compliant alternative treasury investment instruments that could act as profit generating receptacles for the surplus liquidity in the industry.
Where do you see the Islamic finance industry in, say, the next five years or so?
I see two Islamic banks with Amana Bank in the forefront, and limited windows by larger conventional banks. Most of the obstacles in the fiscal and legislative frameworks would have been rectified, and Sri Lanka would capture Shariah compliant investment flows between the Middle East and the far East. From a global perspective, Islamic finance would have progressed substantially as an alternative banking model in most of the G20 countries. However, the challenge to achieve uniformity in the application of Shariah principles to global transactions will remain the single biggest issue in taking the model platform further forward.
Name one thing you would like to see change in the world of Islamic finance.
I would like to see greater agreement among scholars with regards to uniformity in the application of Shariah principles to transactions across the various jurisdictions so that Islamic banking and insurance systems could offer a sound and sustainable alternative to conventional systems worldwide.