Islamic Financial Institutions: International & National
Islamic Development Bank (IDB)
The idea of establishing an international financial institution for Muslim counties was discussed in the late 1960s by the Organization of Islamic Conference (QIC) Working papers were circulated and proposals made, but no concerted action was taken until the first meeting of the Finance Ministers of the Islamic countries held in Jeddaha 1393H (December, 1973).
The second conference of finance ministers held in August 1974 adopted the Articles of Agreements establishing the Bank. The Bank began functioning on 15 Shawal 1395H (20th October 1975).
- IDB Objectives:
The establishment of the Islamic Development Bank was aimed at contributing to economic development and social progress of its member countries by reinforcing economic co-operation among them, assisting in the development of Islamic economics, banking and finance, and promoting the economic and social welfare of Muslim communities in non-member countries. In order to realize the above objectives, the IDB is empowered by its Articles of Agreement to engage in the following activities:
- Participation in equity capital of productive projects and enterprises in member countries.
- Investment in economic and social infrastructure projects in member countries by way of participation or other financial arrangement.
- Extending loans to the private and public sector for the financing of productive projects, enterprises and programs member countries.
- Establish and operate special funds for specific purposes including a Fund for assistance to Muslim communities in non-member countries.
- Operate trust funds.
- Accept deposits and raise funds in any other manner.
- Assist in the promotion of foreign trade especially in capital goods, among member countries.
- Suitably invest funds not needed in its operations.
- Provide technical assistance to member countries.
- Extend training facilities for personnel engaged in development activities in member countries.
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