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Maldives’ first Islamic bank opens for business

The first Islamic bank in the Maldives opened today, promising Shariah-compliant banking services. President Mohamed Nasheed attended the opening ceremony this morning.

In an interview with Haveeru, CEO of Maldives Islamic Bank (MIB) Harith Harun said the bank entered the market with capital of Rf150 million (US$12 million), and would operate current, savings and term deposit accounts structured so as to avoid the payment of interest.

Harun told Haveeru the bank would also provide credit facilities to businesses and individuals under Murabahah (sale), Ijarah (lease) or Musharakah (equity participation), as well as trade finance, remittance and ancillary services.

Minimum initial deposit for a savings account would be Rf1000 or US$100, Harun said, Rf2500 or US$250 for a current account, and Rf5000 or US$500 for companies.

Harun told Haveeru that there was a strong demand for Islamic banking services in the Maldives. However he said the bank also faced issues with laws preventing foreign ownership of land, and would be unable to provide home-financing until the law was rectified. A 15 percent tax on the transfer of properly was also “disadvantageous”, he told Haveeru.