Dubai Islamic Bank’s Chilwan: “We need to fortify Islamic banking in the Philippines to create opportunities”

• The Philippines has to position Islamic banking differently to gain customers
• Islamic banks are more resilient because of real assets
• The principles of Islamic banking include alleviating poverty and inequality

With the recent passage of the Republic Act No. 11439, more commonly known as the Islamic banking law, the Philippines, specifically the Bangko Sentral ng Pilipinas (BSP), has begun to address the constraints in the country’s banking system, providing opportunities for interested foreign and domestic players to enter the market.

One of those who conveyed interested is Adnan Chilwan, the CEO of Dubai Islamic Bank and one of the speakers in a recent Islamic finance conference held in the Philippines. Chilwan clarified that “Islamic banking is for all”. He went on to explain that instead of telling Muslims that they should have an Islamic bank, he recommended that the Philippines should come up with the right branding and positioning to eliminate the misconception that Islamic banks are only for Muslims.

He went on to add that Islamic banks are more resilient because of its real assets. Its very principle is on the concept of trading. Nothing is speculated, which is something that he wants other banks to take note of. Islamic banks, however, are still trying to find the right footing. This is why Chilwan says that the myth surrounding Islamic finance “needs to change.”

“We need to tell people to come and join our Islamic bank because it is more convenient, accessible, matches their demands and has all the products and structures that satisfy their requirements today, and not because it is an Islamic bank,” Chilwan shared.

The change in positioning helped Dubai Islamic Bank internally and made the world take notice of Islamic banking. Dubai Islamic Bank, the first commercial Islamic bank in the world, only had a 3% market share when it started. The institution now has 11% market share and this was all done without compromising the Islamic law.

Chilwan, who is interested in bringing the same concept to the Philippines, believes that the country has the right platform to cater to Muslims and non-Muslims alike. The Philippine population has around 100 million with more than 70% of the population considered unbanked, according to the BSP.

“When you look at Islamic banking and its principles, it talks about participation and risk sharing as well as alleviating poverty and inequality,” the CEO noted.

There are other sectors within the Islamic economy, such as insurance, tourism and hospitality, but Islamic banking is the “catalyst that is driving everything”. And Islamic banking fundamentals can be engraved in any economy, which allows non-Islamic countries to adopt them to create liquidity and monetise their assets.

Islamic finance is a mode of financing that should be available to all, and if the regulatory framework allows Chilwan to do so, he would be interested to work with regulators to try and see how he can “tap into the market, bring his expertise and set up shop”.