Duterte Signs Law Regulating Islamic Banks
President Rodrigo Duterte has signed into law the regulatory framework for Islamic banks in the country.
Duterte signed Republic Act 11439 on August 22, a copy of which was released by Malacañang to reporters on Friday.
Islamic banking, as defined by the law, refers to banking business with objectives and operations that do not involve interest (riba) as prohibited by the Islamic religious law Shari’ah and which conducts its business transactions in accordance with Shari’ah principles.
The measure placed Islamic banks under supervision and regulation of the Bangko Sentral ng Pilipinas (BSP).
The BSP’s Monetary Board may authorize conventional banks to engage in Islamic banking arrangements, including structures and transactions through a designated Islamic banking unit within the bank.
The board may also allow foreign Islamic banks to operate in the Philippines, taking into account what the economy requires as well as the preservation of stability in the banking system and maintenance of healthy competition.
The BSP may require Islamic banks to maintain reserves against their deposit accounts and funds held in trust or under investment accounts.