Islamic banks have the ability to encourage startups, generate jobs

Former governor of Bangladesh Bank Dr Salehuddin Ahmed on Saturday said that Islamic banks can work to encourage youth-led startups for employment by providing investment in nominal profit margin, which is the broader perspective of Islamic finance.

He said this while speaking as the chief guest at the inaugural ceremony of the Bangladesh Institute of Islamic Finance (BIIF), a training institution for Islamic financing.

Prof Mahbub Ahmed of DU, founding chairman of BIIF, presided over the event. 

Salehuddin said higher interest and compound interest work as a barrier for entrepreneurs, this is why Europe and the United States have formed separate equity systems for Islamic financing along with the research panel.

He said there are many Islamic banks and general banks that have opened Islamic banking wings, but quality Islamic banking is lagging behind in line with the global standard, due to lack of knowledge and regulations. 

He emphasized that Islamic banks work for human welfare, creating opportunities for the deprived in the sense of social justice of Islamic financing.

Former NBR chairman Abdul Mazid said due to lack of knowledge and talented human resources, Islamic financing cannot work properly, and training institutes like BIIF can offer diploma programs for Islamic banking and financing.

Prof Mahbub said Islamic financing should be included in the academic curriculum in the universities, as there are 12 Islamic banks in the country and some other banks have Islamic banking wings.

The world-famous Cambridge and Oxford universities have several disciplines on Islamic financing and banking, so why not in Bangladesh? he pointed out.

Salehuddin along with other guests inaugurated the BIIF and uncovered a book on Islamic banking.