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ISSUE No. 65
Islamic Finance

Islamic Finance has grown substantially over the past decade. Its average annual growth is estimated between 15% and 20%. Islamic banking assets, on the other hand, have expanded at an impressive pace and are estimated at USD 3 trillion this year.

With its focus on risk sharing, Islamic Finance offers genuine advantages to institutions and customers who have adopted this financial system.

As a neutral International Financial Centre with a strong proven track-record of more than two decades in cross-border financing and investment, Mauritius provides a conducive environment for the provision and growth of Islamic Finance. In addition, since Mauritius is fairly well impregnated with the Islamic culture, Islamic banking and finance are not alien concepts. A number of Shari’ah compliant global funds have already trusted the Mauritian jurisdiction and there is an increasing interest in Mauritius as a place to structure Sukuk using Shari’ah compliant trusts as vehicles.

Mauritius fully supports international initiatives, namely FATF, Basel, IOSCO, and IAIS aimed at preventing the jurisdiction from being used for money laundering and terrorist financing.

In fact, Mauritius has had a Waqf Act since 1941. Over the years there has been constant evolution in the Islamic banking and financial services industry in Mauritius. In November 2007, the Bank of Mauritius was officially admitted as an associate member of the Islamic Financial Services Board (IFSB). In 2008, the first Islamic insurance cover became operational, and in 2009 the first Islamic Banking business window was opened.

These developments set Mauritius well ahead of the curve for the provision of Islamic Banking and Financial services in the region.

The Board of Investment sponsored the 11th Islamic Financial Services Board Summit held on 21st and 22nd May 2014 in Mauritius. This one-and-a-half-day summit brought together an experienced international group of chairpersons and speakers with a projected audience of 300 delegates from all sectors of the financial services industry across the globe. During his keynote address, the Prime Minister of Mauritius announced the development of Sharia-compliant liquidity management instruments.

Various expressions of interest were received about the Mauritian International Financial Centre. It is to be noted that this week the Bank of Mauritius has announced the granting of a new banking licence to Habib Bank Limited (HBL) to conduct Islamic banking business through a window operation, alongside its traditional banking business.

Mauritius has all the ingredients in place for the provision of Islamic Finance and banking. Its success depends on the involvement of various institutions as well on the Mauritian clientele. As stated by the Governor of Bank of Mauritius, "Islamic finance is attractive for all customers of financial services irrespective of their faith as it is based on principles which are of universal appeal and are echoed in many religions.”

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