However the penetration is slow, Minister Rishad Bathiudeen said at a ceremony held in Colombo recently.
“As you may already be aware the global Islamic Banking and Finance (IBF) sector has been growing steadily,”
“As for Sri Lanka, the penetration of IBF is very low,”
“Of Sri Lanka’s total banking and finance sector assets, less than one percent only belongs to Islamic banking and finance.”
The Minister says this is due to lack of awareness among the Muslim people in the country.“More than 85 percent of Lankan Muslims alone are unaware about IBF and how to join it. Also much more attention and keenness by our national banking and finance sector is needed for us to see bigger IBF growth here,”
Lankan banking and finance experts inform me that there are two ways to effectively expand the sector in Sri Lanka.
The Minister points out that banking experts say creating a demand from the market -that is from the consumers’ side, and facilitation and offerings of Islamic finance products by the financial regulators of the government such as the Central Bank will help the growth.
“Sri Lanka primarily being a non-Islamic country has taken great steps to legislate and regulate Islamic banking,”
“We have amended the Banking Act in 2005 to accommodate Islamic financial transactions. Our key tax laws also were amended in 2011 to include provisions for Islamic Financial transactions.”