April 2009 There are 4 Islamic banks among the 18 total banks in Yemen, however, the Islamic banks are seeing more growth than their commercial or conventional counterparts, said Mohammed Bin Hamam, Deputy Governor of the Central Bank of Yemen.

Hamam said that training courses on Islamic banking, organized by the Islamic Institute for Research and Training which belong to the Islamic Bank for Development, were launched for his bank last week and will last for five days.

The four Islamic banks accounted for 31 percent of total assets held in the Yemeni banking sector in 2008 compared to 30 percent in 2007. This dramatic progress reflects the prosperity of Islamic banks, Hamam said.

Bin Hamam praised amendments to the Islamic banking law provided by Parliament recently, which allow commercial banks to open branches operating on Islamic principles in line with the traditional criteria of the Central Bank of Yemen.&

He affirmed the importance of this training program to introduce commercial banks to the Islamic system. The program aims to explain principles of Islamic banking and to improve the knowledge of participants so that they are qualified to deal with Islamic banking. The program includes lectures by a number of Islamic banking experts on key topics and formulas used by Islamic banks.&

It also includes Islamic finance applications and controls, organizational arrangement, legal and practical steps to move from a conventional to an Islamic bank, and methods to introduce branches or special windows of Islamic financial services within traditional banks.

The funds and loans given by commercial and Islamic banks to finance private sector activities increased to YR418 billion in 2008, from YR359 billion in 2007, an increase of YR58.7 billion or 16.3 percent, according to an official report issued by the Central Bank of Yemen.

According to the report, the portfolio funding share of 14 commercial banks accounted for 60 percent whereas the 4 Islamic banks accounted for 40 percent. The amount of granted loans and financing of rial in Islamic banks rose to YR198 billion in 2008 from YR162.3 billion in 2007, a growth rate of 22 percent.

Loans granted by Islamic banks in foreign currency rose to an equivalent YR4.220 billion, compared toYR197.4 billion the previous year, a growth rate of 11.7 percent

© Yemen Observer 2009 omar 1.1:zy