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Bermuda likely to host first Islamic bank by year-end

Bermuda is likely to see the first Islamic financial institution to be up and running by the year end, a development which will boost the chances for Bermuda to become an emerging hub for the Islamic banking and finance in the Western Hemisphere.

The Deputy Premier and the Minister of Finance Paula A. Cox, on the sidelines of the Bahrain-Bermuda seminar, said that she was positive about the outcome of efforts aimed at establishing the first Islamic bank or Takaful Company by the fourth quarter of the year.

Bermuda's Deputy Premier, who held talks with the Minister of Finance Shaikh Ahmed bin Mohammed Al Khalifa among other officials, said the double taxation agreement with Bahrain has helped to create an opportunity for both financial centres to create further synergies while working in Islamic banking, Islamic insurance and fund industry.

"The landmark double taxation treaty with Bahrain, the first of its kind in the region, has paved the way for possible cooperation in variety of areas within the financial sector. We are certain that once the Joint Economic Committee is announced this will look into the all details of future cooperation," she said. Talking about the preparedness of Bermuda to enter into Islamic banking and finance she said that the spadework has already been done and furthercooperation with Bahrain would help creating a proper climate for such institutions to grab the opportunities.

A 12-member strong delegation led by the Deputy Premier and the Minister of Finance Bermuda Paula A. Cox is in Bahrain to explore the opportunities of cooperation with Bahrain in the fields of Islamic banking, takaful and other areas of interest including the capital market.

During the seminar the experts from both discussed in length about the possibility of cooperation with the possibility how Bahrain can replicate the Islamic banking and Islamic insurance model for Bermuda in line with the recently signed double taxation agreement or known as DTA.

Under the terms of the DTA, Bermuda and Bahrain have agreed to work together to develop a multi-faceted relationship and to explore numerous opportunities covering investment, insurance and reinsurance.

Peter Hughes, Group Managing Director, Apex Fund Services said that Bahrain and Bermuda cooperation would complement and strengthen the positions of the both financial centers.

Peter, who has been in Bahrain for the past seven years and serving across the GCC as fund Managers Company, said the investment potential in this part of the world, was very high.

Colm Homan, Partner at Pricewaterhousecoopers, who put together the recommendations for the Islamic insurance or Takaful business, said Bermuda was ready to launch the Islamic insurance or takaful business.

"We have conducted exhaustive study on this subject and many areas have been already covered in terms of rule and regulations.

We are also seeking help from Bahrain to setting up a right framework for Takaful business.

Having said that, we are anticipating the first Taklaful Company to kick off business later this year," he added.

Wayne L Brown, Assistant Financial Secretary with the Ministry of Finance said the DTA seen as a turning point between Bahrain and Bermuda.

B Mahmood Rafique

© Bahrain Tribune 2010

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