Islamic banking is taking off in Mauritius following the government's deliberate plan to promote the opportunities that are available in the niche market. Joharris Nik Ahmad, the CEO of the new first full-fledged Islamic bank in the country, Century Banking Corporation Ltd, tells us about the bank's ambitious plans for Mauritius and other countries in sub-Saharan Africa.
How do you see Islamic banking developing in Mauritius?
We believe that the development of the infrastructure to support Islamic finance offerings in Mauritius - be it the regulatory framework, tax incentives, clearing and settlement or liquidity framework - is very important. Investors on the continent and from India will definitely use the country as a hub if the necessary infrastructure is in place and due to its geographical location. We understand that the government has laid down plans to develop Islamic finance and we will put
our best foot forward to assist in implementing those plans. Our view is that Mauritius will be the preferred offshore market for investors in Islamic banking.
Why did you choose to set up in Mauritius?
Based on our initial feasibility study on the existing opportunities in Islamic banking and our shareholders’ expansive networks in Africa and Asia, the reasons for choosing Mauritius as our base are threefold:
• Since our target markets are Africa and Asia, the geographical location of Mauritius fits well as the base for us to do business with the countries in these regions.
• Mauritius has a stable political and regulatory framework to support our banking operations. This includes the double taxation agreements with at least 35 countries.
• Another attraction is the setting up and operating costs, which are relatively lower than any other jurisdiction of repute.
Which services is Century bank offering?
We are currently offering wholesale banking, treasury and wealth management. For the wholesale banking services, we offer advising, structuring, arranging and distribution. Examples of the products and services under wholesale banking include debt capital markets offers, Islamic bilateral loans, Islamic loan syndications, Islamic trade finances, debt restructuring and Islamic structured products such as Sukuk and securitisation of assets. The equity capital markets offering includes equity valuations, equity restructuring, buy and sell side advice, private equity opportunities, mergers and acquisitions, and initial public offerings. The objective of the wealth management services is to provide funding alternatives to potential borrowers and attractive investment opportunities to investors across various asset classes and sectors. Treasury services will offer our clients trading opportunities in Islamic treasury products, such as Sukuk trading, currency hedging and foreign exchange.
What are your future plans?
We plan to introduce an array of deposit and investment products to suit the needs of corporate and high net worth individuals in the near future. We foresee potential growth for the first 12-24 months coming mainly from wealth management and Islamic structured products in local (MRU) currency, debt capital markets and funds management. We feel that these products will be well accepted in the beginning mainly among the Muslim population, especially those who are very cautious on the interest they have been or are receiving from the non-Shari’a compliant sources.
Article provided by the Board of Investment - the investment promotion agency in Mauritius.