Commercial Banking Conduit For Business Undertakings

Bandar Seri Begawan –Commercial banking and financial system assumes the basic economic purpose of channelling funds from surplus economic units to those in need of financial resources for both existing and planned business undertakings.

Pehin Dato Awang Haji Abu Bakar, Health Minister, said this at the closing of the International Conference on Islamic Banking and Finance yesterday.

The Minister said it is not difficult to imagine the importance of the financial intermediation for both developing and developed economies.

Whether or not they recognize this fact, financial intermediates do serve this economic purpose when they seek to maximize profits for their owners.

Pehin Abu Bakar added that Islamic banking and finance is also capable of providing financial stability and distributive justice.

He said that there are three major parties involved in financial intermediation: first, the providers of funds or depositors; second, the financial intermediaries and commercial banks in particular; and, finally the users of funds such as producers and traders.

The profit and loss sharing schemes of Islamic banking and competition among Islamic banks should evolve into a system where all three parties get a fair share of profits as well as losses of the business.

The Minister in his speech also said that the government of Brunei, with the financial cooperation of Islamic Development Bank of Jeddah, has approved the establishment of the centre for Islamic banking finance and management at Universiti Brunei Darussalam (UBD).

UBD has already started a minor programme in Islamic banking and finance and the first batch of the programme will be graduating this year. -- Courtesy of Radio Television Brunei 

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