Ten-Year Conversion by Malaysian Bank Shows Islamic Hub Hurdles
- Agrobank seeks to increase loans by 10 percent annually
- Fear of uncertainty hinders development: Chartered Institute
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It took a Malaysian lender more than 10 years to complete its conversion to a fully-fledged Islamic bank, highlighting the challenge for countries such as Indonesia in their bid to become Shariah funding hubs.
Agrobank, a state-owned lender set up in 1969 to provide financing to farmers, would have given up its ambition to be Shariah-compliant had there been no commitment from employees and directors, said Chief Executive Officer Wan Mohd Fadzmi Wan Othman. The process was “grueling,” involving numerous meetings with staff and customers, and redoing all documentation, he said. The plan was first announced in 2004, derailed and then revived in 2012.