Noor Islamic targets low-income savers

Noor Islamic targets low-income savers

By Farhan Bokhari

Published: June 2 2008 18:20 | Last updated: June 2 2008 18:28

The United Arab Emirates’ Noor Islamic Bank is to target lower-income workers by launching Islamic banking products through the country’s post office network.

The joint venture between Noor Islamic and the UAE post office is targeting the 50 per cent of the population who have no formal bank accounts, according to Hussain Al Qemzi, Noor Islamic’s chief executive.

“Post office banks are common around the world,” says Mr Qemzi. “It is time for an Islamic bank to try out this idea. We have signed a contract with the post offices [in the UAE] to create a post bank to cater to the poor.”

Regular banking accounts for low-income individuals would comply with an order from the ministry of labour that requires companies to deposit salaries in banks.

For many low-income expatriate customers from countries such as India, Pakistan and the Philippines, who represent a significant chunk of the UAE’s workforce, a post office account would offer significantly lower charges than those of regular banks.

It would also bring these workers into the formal economy and may cut into the hawala system on which many low-paid workers are forced to rely in order to transfer funds back to their families. The informal hawala system has been identified as a financing mechanism used by extremist networks.

The proposed activities of the joint venture will include debit cards, Islamic insurance, credit cards, microfinancing, salary payments, remittances and currency exchange, according to earlier statements. “We understand that providing banking services to the low-income segment may not be lucrative,” the joint venture said earlier this year.

Noor Islamic, which began taking deposits from customers this year, is 25 per cent owned by the Dubai government, 25 per cent by Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s ruler, 5 per cent by the UAE federal government and 45 per cent by 17 UAE royals and businessmen, according to earlier reports. Some of the most prominent names in Dubai’s business elite sit on the bank’s board.

Many critics lament the fact that, in practice, Islamic banks are no different from conventional banks, in the sense that they in effect pay the same kinds of assured returns that are paid by regular banks.

Mr Qemzi says that he is looking for expansion into Asia, Africa and even Europe, regions which are home to large and growing communities of Muslims.

“We see plenty of areas which are empty. North Africa and Central Asia has no presence of Islamic banking. Indonesia and Pakistan has a very small presence of Islamic banking,” he says.

Noor Islamic may choose to acquire either conventional banks which can be converted to Islamic institutions or existing Islamic banks for expansion. Mr Qemzi previously helped convert the National Bank of Sharjah into an Islamic institution.

“Either you go organic by getting [Islamic banking] licences [in other countries] or you acquire conventional banks and convert them [to Islamic banks],” he says. “You have to do this very carefully. You need to consider the cost of conversion and the regulation has to be in place.”

One challenge for such consumer-based expansion is finding bankers who are equally versatile with the needs of the market and familiar with Islamic concepts. This is a common problem cited by top executives at Islamic banks. “We are in a situation where so much talent is chasing such few people,” says Mr Qemzi.

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「サハリン２」邦銀主導で53億ドル融資　サブプライム後最大規模

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　銀行団は事業の実質的な経営権を持つロシアのガスプロムなどと6月中旬にも融資契約に調印し発表する。融資の内訳は国際協力銀が約37億ドル、三菱東京ＵＦＪ銀とみずほコーポレート銀行、三井住友銀行、仏ＢＮＰパリバ銀行の4行が合計で約16億ドルを融資する方向。

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新銀行東京、不良債権比率倍増の12％超　1016億円減資発表

　経営再建中の新銀行東京（東京・新宿）は2日、2008年3月期決算で167億円の最終赤字になったと発表した。不良債権比率は12.7％と前の期から倍増。開業以来の累積損失の解消へ今秋に減資を実施する方針も正式表明した。先月からの金融庁検査による資産査定の結果は未反映。最近の金融環境の悪化も織り込めば、再建は一段と厳しさを増す。

　新銀行東京には東京都が経営再建のため4月に400億円の追加出資を実施。一方で前期決算で開業以来3年間の累損は1016億円にのぼり、6月末の定時株主総会で同額の1016億円の減資を決議する。

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