JEDDAH Feb 16 A long-touted Islamic megabank
has received approval from Bahrain and a preliminary green light
from Malaysia to begin operations, an organizer said on
Saudi Arabia's Sheikh Saleh Kamel -- who is founder and
chairman of Bahrain-based Islamic bank Al Baraka BARKA.BH and
spearheaded the megabank initiative -- said the venture is still
in discussions with Qatar to obtain a licence.
The entity will likely have an authorized capital of $3
billion, a third of which will be raised in a private placement.
The fragmented Islamic finance industry lacks sufficient
capital to compete with the Islamic units of Western banks on
mandates to syndicate loans, arrange Islamic bonds and supply
project finance in the Gulf Arab region.
The lack of a lender of last resort is seen as one of the
nearly $1 trillion industry's greatest weaknesses, as few
central banks issue liquidity instruments compliant with Islamic
law, forcing Islamic banks to place their liquidity with large
In November, Kamel said he expected the megabank to launch
in 2011. [ID:nLDE6AT18H]
(Reporting by Asma Alsharif; Writing by Shaheen Pasha;
Editing by Amran Abocar)