Sama under fire over Islamic banks

A senior Islamic scholar in Saudi Arabia has launched a rare attack on the Kingdom’s central bank, accusing it of stifling Islamic banking services.

Sheikh Abdullah bin Suleiman Al Manee, a member of the Supreme Islamic Scholars Authority, said most of the Islamic banking services in the world had originated from Saudi Arabia but added they were all individual initiatives.

Addressing an Islamic banking seminar in Riyadh on Sunday night, he said the Saudi Arabian Monetary Agency (Sama), the Gulf Kingdom’s central bank, had not done enough to promote Shariah-compliant banking services.

“Sama is one of the main obstacles that are blocking the Kingdom’s efforts to become the world’s Islamic banking centre,” he said in his address, carried by Saudi newspapers on Monday.

“You should know that nearly 90 per cent of the Islamic banking products in the world had come from Saudi Arabia...but all of them were a result of individual rather than official efforts...it is time for Sama to lay the basis for an Islamic banking system that matches the country’s prominent Islamic status,” said Manee, who heads the Islamic banking unit at Riyadh Bank.

Manee also criticized Sama for not allowing the Swiss-based Dar Almaal Al Islami (Islamic Finance House) to open a branch in Saudi Arabia although it was the first Shariah-compliant financial unit to operate in the Kingdom. He said its request to open a new branch has been rejected but gave no other details.

Saudi Arabia, which has the largest Arab banking sector after the UAE, has one major Islamic bank, Al Rajhi Group, but most of its 12 commercial banks have opened Shariah-compliant units to cope with a steady increase in demand for such services.

Follow Emirates 24|7 on Google News.