Tag: islamic bank

BML and Islamic Bank offer advise for Maldivians travelling abroad

The Maldives Islamic Bank has announce provisions to sell US dollars to Maldivians travellign abroad, while the Bank of Maldives (BML) has advised those journeying abroad not to carry cash.

A press release from the Islamic Bank said that, from today (June 5), customers with a valid air ticket and national ID could purchase up to US$500.

A heavy import-export imbalance in the Maldives results in a perennial foreign currency shortage, while a dominant tourism sector – which deals almost exclusively in US dollars – results in a weak local currency.

BML has meanwhile advised customers that using its debit and credit cards abroad is recommended.

BML has found that some customers become frustrated if their debit or credit card appears to have been declined when abroad. Cards will almost always be accepted if the amount being transacted is within the cardholder’s limit.

BML visa debit card holders can currently withdraw up to US$200 a day, while point of sale transactions have a US$400 limit, explained today’s press release.

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Political instability is key concern at Maldives renewable energy investment conference

Participants attending this week’s Maldives International Renewable Energy Investors Conference consider the event a “good beginning”, but claimed political instability was presently hampering foreign investors’ confidence in the sector.

The two day event, which concluded yesterday (June 17), aimed to facilitate long-term partnerships between international investors, project developers, energy companies and utilities groups in order to enable successful renewable energy projects throughout the Maldives.

The Ministry of Environment and Energy hosted conference at Bandos Island Resort and Spa in an effort to boost investor confidence and attract renewable energy financing.

Although Environment Minister Dr Mariyam Shakeela noted that the conference was successful, she also urged participants to “reflect on our mutual needs” and emphasised that investments will be “protected, facilitated, and supported by the government” during her concluding speech yesterday.

“Your need to promote your [renewable energy] products and our need to reduce energy costs – that of course is a huge issue as was mentioned here so many times – and also of course to combat climate change,” said Shakeela.

“We currently rely extensively on imported fossil fuels, as we have heard here over and over and over again these last few days. Yet paradoxically, many islands have ample but underutilized renewable energy resource potential,” she continued.

“The Ministry of Finance and Treasury is working to create an enabling environment for investments in general, which I believe is a concern of a lot of investors,” she added.

Meanwhile, Maldives-based representatives from the World Bank (WB) and Asian Development Bank (ADB) present at the conference pledged their continued support in an effort to attract renewable energy investors.

ADB Director Mr Yongping Zhai pledged to “go as far as it costs” to transform Maldives into a renewable energy dependent country, as opposed to oil dependent, according to the Environment Ministry.

However, he noted that although the Maldives has the commitment, market potential, resources, and willing investors for renewable energy, there is a “missing link to put these pieces together”.

“In theory things should work, but why things are not working so far is [the lack of] the right business model,” said Zhai. “That’s the purpose of this conference and of the ADB’s work.”

The WB considered the conference to be a “good initial first information gathering” event for facilitating renewable energy investments and emphasized that it was working very closely with the Maldives government to develop the energy sector and national financial institutions, said WB Senior Energy Specialist Abdulaziz Faghi.

In an effort to boost investor confidence, the Environment Ministry emphasised the WB would guarantee any investments made in the Maldives.

“One of the issues facing the private sector investing in any sector is the payment guarantee and their concern with the return on investment,” State Minister for Environment and Energy Abdul Matheen Mohamed told Minivan News yesterday.

He explained that the government of Maldives has allocated US$5 million from the International Development Association (IDA) financing though the World Bank, which will be leveraged up to US$ 25 million.

“So basically the World Bank will be issuing a guarantee for this amount to give guarantees to the investors investing [funds] under the scaling-up renewable energy program (SREP) investment plan,” said Matheen.

He noted that conference participants concerns have “been resolved though the guarantee facilities introduced by the World Bank”.

Foreign investors lacking

Following the conference yesterday, Renewable Energy Maldives Managing Director Dr Ibrahim Nashid told Minivan News that he believed banks and foreign investors crucial to revitalising the national energy “didn’t turn up” at the event.

“The main idea was to bring investors here, but I don’t think that has happened,” said Nashid.

He explained that while Maldives-based institutional representatives from the WB, ADB, United Nations Development Programme (UNDP) and various other Maldivian institutions attended the conference, individuals with authority to authorize lending and/or donor funds were not present.

“Basically there wasn’t any financial institution that could give the finance or lend the money,” said Nashid. “No international banks came and what is very noticeable there wasn’t Indian investors. Not a single Indian company was represented.”

“ADB was saying they have earmarked funds for the Maldives, but their idea was also to leverage that with some other lending institution and that was not there,” he added.

Nashid noted that none of the Maldivian banks were present at the conference.

“The Islamic Development Bank (IDB) was there, but not the Islamic Bank in Male’, even the Bank of Maldives didn’t attend,” said Nashid.

“It shows the confidence that everybody has, [which is] the reason the World Bank is talking about giving a bank guarantee,” he continued.

Although Minister Shakeela was asked many times about what the government would do to guarantee investments “she skirted the question saying the ADB and WB is giving the guarantee,” according to Nashid.

“That was not the issue, the issue is what happens to our investments,” he said. “The GMR case is very very open and obvious to everyone. The issue of political instability was very much skirted, [but] everybody knew.”

Nashid claimed that most conference participants who discussed renewable energy investments said a decision would not happen until after the presidential election scheduled for September.

“We need political stability here, without political stability I don’t think any project is going to take off,” said Nashid.

“We can do the preparation of paperwork, etc. but money will not be put on the table. That’s the message we get from abroad,” he added.

These sentiments were echoed by conference participants representing various private sector businesses.

“It was a good start, but this is really just a beginning. There were not very many investors present,” an infrastructure company representative told Minivan News on condition of anonymity.

“The three things investors are looking for are credibility, stability, and return on the investment,” a telecommunications company representative told Minivan News on condition of anonymity.

The source explained that political instability was the main concern preventing investors from committing to renewable energy development. He also agreed with another conference participant’s observation that political instability in the Maldives was the ‘elephant in the room’ at the event.

“There were very few investors present, which is not surprising. No one is going to be eager to invest [in developing renewable energy] until after elections,” he added.

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Protests to continue as police threaten zero-tolerance

Maldives Police Services has said it will adopt a zero-tolerance policy during protests if opposition demonstrators continue their current, increasingly violent trajectory which has sent four police officers to the hospital in the past two days.

Citing protesters’ recent use of fireballs, petrol bombs and bricks, police have said they will exercise full legal authority to prevent the ongoing anti-government protests from developing into acts of terrorism.

Opposition rotesters have demonstrated every night since January 16, when Criminal Court Chief Judge Abdulla Mohamed was arrested by military forces and detained at a training facility in Kaafu Atoll Girifushi. Opposition party members have drawn crowds of approximately 200 to 300 nightly to the area in front of the Maldives Monetary Authority (MMA) near the Male’ fish market, while ruling Maldivian Democratic Party (MDP) members have taken to gathering at their party camp on the other side of the island.

Police and military forces have patrolled key areas of the island on a regular basis, nightly arresting individuals for violent activities.

Speaking of last night’s demonstration, Sub-Inspector Hussain Haneef said 37 individuals were arrested “for violence and acting against police orders.” He added that nine individuals have been released.

Mohamed Haisham, a protest coordinator and member of opposition Progressive Party of Maldives (PPM), said most individuals arrested last night were women and blamed any violent agitation on MDP, “who is giving money, drugs, alcohol and knives to gangs who are causing the problems.”

Haisham said protesters are undeterred by the police warnings. “Tonight’s protest will be very strong,” he informed Minivan News, adding that protests will continue until “the biggest one”, a rally scheduled for February 24.

Last night’s unrest also led to the breaking of windows at MDP headquarters and the Finance Ministry, as well as the windshield of a city bus.

Police have also launched an investigation into a Henveiru ward fire which broke out last night in the home of musician Ibra Rasheed, destroying a majority of the musical equipment belonging to himself and his son.

Rasheed, who claims not to belong to any party, has been producing music against the former government since the 1980s; between 1988 and 2003 he was arrested, jailed and banished to an island. “They arrested me for drugs, but everybody knows I don’t use drugs. They really arrested me for my music,” he said.

Since the current government came to power in 2008 Rasheed has been able to produce and sell six albums, however he claims being hassled by supporters of the former government for his work.

In 2010 Rasheed released the song “Black 30 Years” criticising the lifestyle of Abdulla Hameed, former Atolls Minister and half-brother to former president Maumoon Abdul Gayoom. “After that I was walking by the postal building and saw Shaheem Hameed [his son]. He refused to shake my hand and said he would sue me for what I did to his father,” Rasheed said. Soon after he was beaten up in the street, he said.

In the past several weeks, the threats have become more frequent.

“There are guys who come around on their motorbikes and tell me they are going to beat me and kill me. With these protests now they are coming more often, I am scared anything might happen to me so I stay at home. I think they were the ones who started the fire [in my son’s room].”

Rasheed said the door to his son’s room was locked and vacant when smoke began pouring out. House residents forced open the door and put out the flame, however all of the equipment inside was destroyed. “We kept my son’s computer for mixing and the guitars and most recording stuff in there,” he explained. “Someone told me the Islamic Bank can provide financial support, but I haven’t talked to the bank yet.” Rasheed said the damages amounted to Rf80,000 (US$5,200).

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Maldives’ first Islamic bank opens for business

The first Islamic bank in the Maldives opened today, promising Shariah-compliant banking services. President Mohamed Nasheed attended the opening ceremony this morning.

In an interview with Haveeru, CEO of Maldives Islamic Bank (MIB) Harith Harun said the bank entered the market with capital of Rf150 million (US$12 million), and would operate current, savings and term deposit accounts structured so as to avoid the payment of interest.

Harun told Haveeru the bank would also provide credit facilities to businesses and individuals under Murabahah (sale), Ijarah (lease) or Musharakah (equity participation), as well as trade finance, remittance and ancillary services.

Minimum initial deposit for a savings account would be Rf1000 or US$100, Harun said, Rf2500 or US$250 for a current account, and Rf5000 or US$500 for companies.

Harun told Haveeru that there was a strong demand for Islamic banking services in the Maldives. However he said the bank also faced issues with laws preventing foreign ownership of land, and would be unable to provide home-financing until the law was rectified. A 15 percent tax on the transfer of properly was also “disadvantageous”, he told Haveeru.

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Demands for exclusive licence delay establishment of Islamic bank in the Maldives

The Maldives Monetary Authority (MMA) has confirmed that two banks have applied for the licence to establish an Islamic bank in the Maldives.

The first proposal is a public private partnership (PPP) between a multinational company and the Maldives government, and the second is for a PPP between a UAE company and the Maldives government.

The Finance ministry says that the new bank will focus on issuing loans to businesses, and the government is hoping that services will be extended to the atolls as well.

Both the government and the licence seekers are responsible for the delay in establishing an Islamic bank, according to Finance minister Ali Hashim. “Each party wishes to get an exclusive license but the government cannot give an exclusive license to any party. So the negotiations have dragged on and this has delayed the process,” the minister explained.

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