Australian bank aspirant IBA Group appears to be on the cusp of securing a restricted banking licence from APRA.
The Sydney-based company, which is planning to launch Australia’s first privately-owned Islamic banking service, last week registered trademarks for its business with IP Australia.
IBA Group, which is chaired by former ME Bank chief executive Anthony Wamsteker, is seeking approval from IP Australia to trade as “IBANK”.
Islamic banking is one of the great untapped segments of the Australian banking market that is currently dominated by a string of cooperatives operating through financial services licences issued by ASIC.
IBA would break new ground in Australia if APRA approves its licence application.
To ensure conformity with Islamic banking principles, APRA might need to review its licensing rules.
A prohibition on the payment and receipt of interest is a key tenet of Islamic banking.
“IBA is building Australia’s first digital bank with ethical banking as the core focus,” the company states on its website.
“We’ll also be completely Shari’ah-complaint – meaning we’ll be Australia’s first bank to offer ethical banking products for Muslims within the Australian community.”
The company claims to be developing Australia’s first Shari’ah-compliant bank even though a Melbourne-based cooperative - MCCA Islamic Finance & Investments – has been offering Shari’ah-compliant financial services since 1989.
MCCA, which operates under a financial services licence, has a national distribution network that currently manages a A$1 billion-plus mortgage book.
IBank is the brainchild of Macquarie University law academic Dr Rashid Raashed, who according to ASIC records owns all of the ordinary shares in IBA Group through a private investment company.
However, IBA Group is sitting on $10 million of capital after issuing preference shares to an investment company controlled by Indian businessman, Mohammed Shaji Madathil.
One potential challenge facing IBA will be to secure control of the www.ibank.com.au domain.
According to the Australia’s domain registration authority, AuDA, the website address is presently owned by Dale Hurley, a director of another local banking aspirant, Avenue Bank.
Banking Day has sought comment from Wamsteker about the status of the company’s licence application.