The Islamic bank is planning to add overseas representative offices to run trade finance and remittance services.

Reportedly, BNI Syariah will leverage the branch offices of its parent company, Bank Negara Indonesia, in Singapore, Tokyo, Seoul, Hong Kong, London, and New York.

In the month of Match, the bank received a non-cash capital injection of $17.5 million.

According to BNI Syariah president director, Abdullah Firman Wibowo, trade finance is an important and profitable segment for the bank as many of Indonesia’s diaspora are involved in export-import businesses and many foreign companies also operate in the country.

Abdullah Firman estimates that trade finance can offer BNI Syariah fee-based income of up to Rp50 billion to Rp70 billion per year.

He told the media, “Our holding company already has 6 overseas branch offices and we were given the privilege to leverage this. We will collaborate with them and place some of our trade finance experts and remittance representatives there.”

“We invested heavily in human resources and IT. We’ve recruited certified trade finance specialists and trade finance advisor specialists as well as remittance representatives to be attached to several remittance agencies including at our holding overseas branch offices to attract consumers for the trade finance, financial institutions and remittance segments.”

“Our representatives will also offer our hajj savings product, house financing, SME financing and so on. From our internal research, 86 percent of our international customers are already eager to shift to Shariah products.”

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The Islamic banks work in compliance with the Sharia law, which prohibits them from charging interest on loans.

The act allows the Philippines’ central bank and its monetary board to create and supervise the Islamic banking system in the country. It also gives the commercial banks in the country the option to set up Islamic banking units in compliance with the Sharia law.

Philippines central bank Governor Benjamin Diokno believes the new law will unlock the full potential of Islamic financing in fostering inclusive economic growth.

Benjamin Diokno told the media that, “With a well-defined regulatory framework now in place, the Bangko Sentral ng Pilipinas (BSP) looks forward to seeing greater participation in Islamic financing by both domestic and foreign banks.”

He added, “This is expected to widen opportunities for Muslim Filipinos, including those from the Bangsamoro region, in accessing banking products and services. This is a great stride in our financial inclusion mandates.”

Based in Zamboanga, the Al Amanah Islamic Investment Bank of the Philippines is the country’s first and only Islamic bank. The new law will come into effect by September, will also open doors for foreign Islamic banks to enter and set up their business in the country.

However, the central bank will regulate and decide on the number of players in the country’s Islamic banking system. The decision will be made after weighing in on various factors such as financial stability, healthy competition, and the country’s economic condition.

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