The House of Representatives on Tuesday approved on final reading a bill which seeks to provide for the regulation and organization of Islamic banks.
Two hundred and twenty-one House members voted to pass on third reading House Bill No. 8281. No one voted against it or abstained.
The measure refers to the Islamic banking business “whose objectives and operations do not involve interest or riba,” which is prohibited by the Shari’ah, and which conducts its transactions in accordance with Shariáh principles.
Once enacted into law, the Monetary Board may authorize the establishment of Islamic banks, and the engagement of conventional banks in Islamic banking arrangements, including structures and transactions through a designated Islamic banking unit within the bank, provided that the Islamic banking unit is separate from its conventional banking transactions.
The Monetary Board may also authorize a foreign Islamic bank to establish banking operations in the Philippines under any of the modes of entry provided under Republic Act No. 7721 or “An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines and for Other Purposes.”
The Bangko Sentral ng Pilipinas is tasked to regulate and supervise the operations of Islamic banks, according to the bill.
Under the bill, Islamic banks may perform the following services:
1) accept saving accounts for safekeeping or custody with no participation in profit and loss except unless otherwise authorized by the account holders to be invested;
2) act as a correspondent of banks and institutions to handle remittances or any fund transfers;
3) accept drafts and issue letters of credit or letters of guarantee, negotiate notes and bills of exchange and other evidence of indebtedness;
4) provide financing with or without collateral by way of leasing, sale, and leaseback, cost-plus profit sales arrangements, and other Shari’ah compliant financing contracts and structures; and
5) other banking services as may be authorized by the Monetary Board.
House Speaker Gloria Macapagal-Arroyo and Amin Rep. Sitti Djalia Turabin-Hataman were the principal authors of the bill. /ee
READ IT HERE: House Bill No. 8281