Islamic Banking Investors Told Hold Strain
Most CIB investors got back their money. Not so those who put money in the CIB’s Islamic Banking Service
Scores of investors who pumped some $35 million into the novel Islamic Banking Service (IBS) which the Clico Investment Bank (CIB) introduced eight years ago with promises of big returns are still nervously waiting for their funds to be returned to them, possibly with interest.
They do have cause for concern because hundreds of people who put their hard earned savings in CIB have been getting back their money from First Citizens Bank which has taken over the failed financial entity.
No problem, as the Central Bank, scrupulously, keeps its word to guarantee the safety of people’s investments.
The IBS investors, meanwhile, have had to hold a bit of strain for the past three months.
The Central Bank, however, is urging them to keep the faith. Things are taking time but progress is being made.
An announcement from the Central Bank states:
“We continue to work diligently to reconcile all records of the IBS. Although good progress is being made, it is taking longer than expected”.
The Central Bank gave the further assurance:
“We are working with interested parties in order to transfer the IBS business in a manner that is Sharia-compliant. This would also take time as it involves careful due diligence to be conducted by these interested parties.
It should be noted that under the terms of the Escrow Contract, the monies invested in the IBS fund are unlike deposits normally held at a commercial bank. This is because the value of the account or the entitlement held in the name of each investor is governed by the performance of the total investments that make up the fund. This a requirement of Sharia Law.”
Last month, Dr Waffie Mohammed, an IBS official, also assured nervous investors, who expressed concern about their funds at a San Fernando meeting, that their money was safe.
The IBS had an asset base of some $40 million at the end of last year-less than two months before the Central Bank took over CIB in the wake of the Clico scandal.