KUALA LUMPUR: The Asian Development Bank (ADB) has provided a $750,000 grant to promote Islamic banking in Indonesia, Pakistan, Bangladesh and Afghanistan.
The money will be shared between those countries’ governments to help their banking systems to meet regulatory standards set by the Islamic Financial Services Board, the ADB said.
Islamic finance follows religious guidelines such as a ban on the payment of interest and on pure monetary speculation.
Its core markets are in the Middle East and Southeast Asia, with about 57 per cent of total global Islamic banking assets held by the 20 largest Islamic banks, concentrated in Malaysia, Saudia Arabia, Kuwait, UAE, Bahrain, Qatar and Turkey.
The ADB, which promotes economic and social progress in the Asia-Pacific region, said that the expansion of Islamic finance in other countries in the region will provide large numbers of people with banking services for the first time.
A report by Ernst & Young on Monday said that up to 150 new financial institutions could be established to cater for growing demand from the Muslim-majority populations of countries such as Indonesia, Egypt and Pakistan.