Thai to open 1st national Islamic bank next month

Thai to open 1st national Islamic bank next month

Agence France-Presse, Bangkok

Thailand's first national Islamic bank will open next month,
initially in the capital of Bangkok and then with branches across
the country, its chairman said Thursday.

The Islamic Bank of Thailand will start operations on January
15, with 13 branches planned to open in 2003 including in the
Muslim-majority southern provinces of Pattani, Narathiwat, Yala,
Songkhla and Satun.

"The bank has offered shares to several financial institutions
including the Government Savings Bank and (state-owned) Krung
Thai Bank," chairman Aree Wong-araya told reporters.

Shareholders are not allowed to hold more than a 15 percent
stake, he added.

The bank is aiming to attract 10 billion baht (US$230.9
million) in capital from both foreign and domestic investors
during its first five years, Aree said.

Nopadol Tehaman, one of the bank's directors, said that
negotiations between the governments of Thailand and Bahrain,
which is interested in snapping up a stake in the bank, are
ongoing.

"Bahrain's government has expressed an interest in holding
about 50 percent of the shares, but Thai law does not allow (such
a high stake)," he said.

During the first year of operation, the bank is expected to
attract deposits worth 2.0 billion baht and make investments of
about the same size, said board member Bantoon Waitanomsat.

An Islamic bank takes deposits, but raises investment returns
through shares and provides depositors with dividends rather than
interest payments, which are prohibited under Islamic rules.

The bank invests only in projects deemed appropriate under
those doctrines.

There are already a number of government-owned banks providing
"window" Islamic banking services, but the new institution will
be the first full-fledged Islamic bank.

Muslims are a minority in Thailand, making up less than five
percent of the country's 62 million people.