The Jeddah-based Islamic Development Bank (IDB) announced the launch of an Islamic investment bank with initial capital of $1 billion (Dh3.6bn) to promote the growth of Islamic financial industry, the bank said. Dr Ahmad Mohamed Ali, President of the IDB, said the mega bank’s initial contributions to the new bank’s capital will be $250 million. He said the new bank is also aimed at facilitating the establishment of inter-Islamic banking market in line with Shariah principles. “The new investment bank will contribute to the financing of mega investments in accordance with the principles of Shariah and devise appropriate solutions to liquidity management,” he said.
The emergence of this large investment bank is being viewed as a mechanism for enhancing the role of Islamic finance industry in supporting economic and social development. It will also facilitate the growth and spread of Islamic financial services industry through the rehabilitation of the cadres necessary for the development of Islamic banking and Islamic solutions to the problems of liquidity management.
On the other hand, the Dr Ali said that demand for the recent Sukuk exceeded $2bn, while the target was only $500m. The bank increased the issuance to $850m later on strong over subscription. The value of the global Islamic banking assets estimated at $785bn by the end of 2008, IDB said in the statement yesterday.
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