The board endorsed the authenticity of capital allocation from BankMuscat shareholders' fund for Meethaq Islamic banking operations.

Speaking at a press conference at BankMuscat head office on Monday, Sheikh Dr Ali Qaradaghi, chairman of Meethaq Sharia board, said that the capital allocation is in line with injunctions of Quran and Sunnah.

"Various contemporary Sharia scholars have endorsed the use of shareholders' funds for Sharia-compliant transactions."

He said, "Meethaq will adopt the best practices in Islamic banking and finance and combine a robust model which will protect customers and complement the Islamic banking industry.

"The Meethaq suite of banking products which combine traditional values with modernity are in the pipeline to give the choice of staying true to one's values."

Sulaiman al Harthy, GM of Islamic banking at BankMuscat , said that the assigned amount for capital may increase if required. "The final allocation will be determined by business opportunities in the market.

"We have got approval for RO150mn capital for Islamic banking, but we may need more than RO150mn in the future. However, for the time being RO150mn is quite sufficient for us."

Harthy added that Meethaq will provide housing finance to individual customers and also provide financing to residential and commercial real-estate projects.

Sheikh Essam Muhammad Ishaq, member of Meethaq Sharia board, said, "Meethaq will stand out for its independent Sharia supervisory board, separate capital, unique risk management tools, fund segregation, separate books of account and core banking system which supports Islamic banking operations, separate Islamic banking branches and proper profit distribution mechanism."

© Muscat Daily 2012