Islamic money market group meets in Bahrain

Islamic money market group meets in Bahrain

Board members of a planned International Islamic Financial Market held their first meeting on Tuesday in Bahrain to discuss steps to set up the market in the Gulf's financial and banking hub.

Regulators said monetary authorities from Bahrain, Sudan, Indonesia, Malaysia and Saudi-based Islamic Development Bank (IDB) would discuss ways of issuing Islamic instruments to meet liquidity requirements of Islamic banks and finance houses.

"There is a need to mobilize more resources," IDB President Ahmed Mohammed Ali said.

"It is the duty of all financial institutions to initiate instruments to facilitate mobilization of resources."

The small but growing Islamic finance industry constitutes around 200 institutions managing an estimated US$170 billion in funds.

Bankers say one of the main problems for Islamic banks is a lack of means to manage their day-to-day liquidity requirements.

Islamic banks ban payment and receipt of interest as it is considered usury by many Muslims. Instead, they generate profits from approved trading and investments. -- Reuters