IDB: Electronic Banking Reduces 50% Of Financing Costs

Sami Swailem, deputy director at the Islamic Research and Training Institute of the Islamic Development Bank, said the financial instrument is a method and not an aim in itself. The financial instrument shall be based on credibility which depends on the market integrity and efficiency which enables the financial institutions reach their aim with the lowest costs.

On the sidelines of the first conference organized by the Egyptian Islamic Finance Association under the title of the development prospects of Islamic finance in Egypt, Swailem added that murabaha is more efficient than the traditional finance as it offers a better method of dealing between the bank and the customer.

Swailem emphasized the importance of activating the role of the electronics companies in order to improve the link between the service providers, banks and customers. He suggested offering murabaha cards which will be different from the commercial credit cards as the bank will offer the required goods. These cards will be available for persons and companies.

The need for liquidity is decreasing with the electronic payment methods, Swailem affirmed. The role of electronic banking is being more important as it does not depend on branches and saves 50% of costs. In addition, there are about 4 billion persons in the world who do not have bank accounts. 

Swailem called on the Egyptian Islamic Finance Association to do a study on electronic banking in order to update the mechanisms used by Islamic banking transactions.