Islamic Fund BAAC
A Futuristic Alternative for Muslim Investors
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Alami News : With the growth and the opening of the AESEAN Economic Community (AEC) are forced to have the Islamic finance system into the region. However, the financial institution of Islamic system in Thailand, which is one of the region’s financial markets and the global market is hot they are going to cope with.
So, The Alami’s magazine for this issue is going to introduce and get to know about the Islamic Banking Fund by passing through “ Apinya Poonyarit , Senior Vice President Deposit Department Bank for Agriculture and Agricultural Cooperatives (BAAC)
Apinya mentioned about the concept of Islamic Banking Fund Management (BAAC) by pointing out that after the Bank for Agriculture and Cooperatives (BAAC) was established for the quality of life for farmers, and one of our customers is Muslim. The demanding for Islamic Banking system is important and is in high demand. Because of this reason, we established the Bank system according to religious principle since 1999. “ System management is separated from the regular financial system, which is like another bank system”.
However, for the management system, we are separated from the normal operation because the Islamic financial system must be Halal, and it must be carried out according to the Islamic doctrine (Sharia). It is not related to interest (Riba), Uncertainty (Gharar) and related vices (Maisir). Islamic Bank Funds work both for transactions, deposit, and loan under Thai law, and we have the advisory boards consisting of Mr. Arun Boonchom as the Chairman and four other directors, namely Dr.woravit Baru, Mr. Vinai Sa-ma-un, Mr.Abdullah Andares, and Mr. Vitthaya Viseatrat.
The management of Islamic Banking System is separated from the deposit account and loans, and it is apart from the regular bank. We have a separating administration and use the form of Sharia law, and it is considered as a small bank within our big bank. The deposit according to the Islamic Bank will invest to the Islamic Financial loan. When it has a profit, we will distribute them to the depositor. We open the service through the Branch office around Thailand, which are approximately 1,250 Branches now.
However, for the financial services, we open for the financial service including financial savings (Wadiah) daily deposit (Muqorobah) as well as deposit accounts about 65,472 accounts.
For the business loan, the transaction is carried by Muqorobah doctrine, which focused on purchasing and selling products (Capital + Profit) by taking deposits and savings (Wadiah) and daily deposit (Muqorobah) together for fund to continue the transaction business. In 2014, we opened the transaction about 1,444 million Baht (31 March 2015). Most of this transaction is giving to the customers in Agriculture part, such as the Cooperative Housing Fund. It is a business to support the Halal in the form of Agriculture related to Agriculture and expanding production and processing business.
For the expansion of Islamic Bank System, we will look at the ASEAN Community, and most of our neighbors are Muslim, and they are considered as good economy inside the country like Malaysia, Brunai, and Indonesia.
If talking about how the objective of the Islamic Bank System will be, Apinya stated that Islamic Banking Fund is like the branch of our main bank. We will move little by little. We try hard to support our customers in term of finance. We want customers from every region to be our customers because we are sure that we work correctly according to the religious doctrine, and the most important is that we have experts that are knowledgeable in term of religion.
“However, the development and expansion of the transaction must be logical. We have to look at the proportion of deposits. Currently, we have customer transactions about 1,444 million Bath and the deposits in the amount of approximately Two billion Bath, and it should be balancing between the loan and deposit. If we expand the loan, we also need to spread the deposit, and it should be totally different from the other banks, and other bank can be borrowing money from another bank to support them”.
In the long term, we are studying that the Islamic Funds can be issued the Islamic bonds or not. We want to develop the Islamic fund to be the Islamic banking to support Muslim who has some problem, and we want to work according to the Islamic doctrine, especially for Halal SME can be used the Islamic Fund System. It is the main investment for Halal system.
“ We service customer through the branched of Agriculture for agriculture, and we already have 1,250 branches, and Muslim can go and use our service ” ; Apinya stated .
