IslamicFinance.de

Bangko Sentral Ng Pilipinas has approved preliminary regulations for Islamic banks and Islamic banking units. The preliminary policy initiatives of the central bank came after the Islamic banking law was signed by President Duterte on August 22 and became effective on September 15. The preliminary regulations are to jumpstart the implementation of the law. Banks must establish their own Shariah advisory boards to ensure Shariah compliance for their institutions. The Philippines has been accelerating the growth of its Islamic economy sectors in the last couple of years to attract foreign investments and to provide its approximately 10 million domestic Muslim population with an Islamic banking option.

The Bangko Sentral ng Pilipinas (BSP) is planning to open up the its rediscounting window to sharia lending entities, essentially a mechanism that allows lenders to exchange their loan receivables for cash but at a discount, effectively giving them cash that they then use to turn around and give even more loans. The sharia rediscounting window forms part of a larger effort to achieve an inclusive financial system that delivers financial services not only to the unbanked but also to the Muslim community. Moreover, the BSP is preparing to draft new rules for the BSP to extend its financial services to Islamic banks that are in accordance with the provisions of Islamic banking. The draft bill has already been submitted to the Senate and the House of Representatives.