The core banking unit of Sumitomo Mitsui Financial Group Inc. has obtained a license for foreign currency-based Islamic finance services in the Southeast Asian country, which promotes Islamic finance under a national policy, informed sources said.
SMBC hopes to use a fully owned local subsidiary as a key operational base for the whole of Southeast Asia, where the demand for funds is strong thanks to economic and population growth, the sources said.
The local subsidiary, Sumitomo Mitsui Banking Corp. Malaysia Bhd, is starting financial services in dollars and other currencies that are fully compliant with Sharia, which bans financial transactions involving interest payments and acceptance.
The group will seek clients among local companies and Japanese firms participating in natural resources and infrastructure development projects, according to the sources.
Source: The Japan News