The House of Representatives late Tuesday approved on third and final reading a bill that sets the framework for the operation of Islamic banks.
House Bill 8281, titled “An Act Providing for the Regulation and Organization of Islamic Banks,” principally authored by Speaker Gloria Macapagal Arroyo and former Anak Mindanao party-list Rep. Sitti Djalia Turabin Hataman, mandates the Bangko Sentral ng Pilipinas to supervise, license and regulate the operations of Islamic banks. The bill was approved by an overwhelming majority of 221 lawmakers.
The bill defines an Islamic bank as a business whose objectives and operations do not involve interest (riba), which is prohibited by the Shari’ah and which conducts its business transactions in accordance to Shari’ah principles.
“We would like to invite everyone, Muslim and non-Muslims, to take a closer look at Islamic banking as an alternative-financing modality, instrument and facility. This is very good for the economy, considering the enormous potentials of the halal industry. As we enter the ASEAN integration, we need to attain financial inclusion for the Muslims in the country,” Anak Mindanao Party-list Rep. Amihilda Sangcopan, who succeeded Hataman, said.
Anak Mindanao is being represented this 17th Congress by its second nominee, Rep. Makmod Mending.
Sangcopan said once enacted, the bill shall provide that the Monetary Board (MB) may authorize the establishment of Islamic banks and allows conventional banks to engage in Islamic banking, provided that these banks create a system that will separate their Islamic banking transactions from their regular business.
The Islamic banks shall be licensed and regulated in the same manner as a universal bank and the BSP shall issue the necessary rules and regulations governing Islamic banking.
Under the measure, Islamic banks are allowed to perform banking services, such as accepting or creating current, savings accounts and investment accounts, accept foreign currency deposits, and acts as correspondent banks and institutions among others.