Founded in 1989, Trustbank is based in Suriname and has operated for many years on conventional banking principles. In 2015, Trustbank took the decision to transform from a conventional bank into a fully-fledged Islamic bank. Trustbank’s Strategic Transformational Initiative focused on serving the identified but unmet need for finance options for small and medium-sized enterprises (SMEs) by offering alternative Islamic funding sources. It appointed the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IsDB), as its advisor to guide the transformation process and ensure the successful launch of the new Islamic bank.
As the leader of the congregation, the imam stood on the podium in the mosque to deliver the Friday sermon. The worshippers sat on rows on prayer rugs and waited eagerly to hear his khutbah. “In the name of Allah, the most beneficent, the most merciful,” he slowly began. “Today’s sermon will be about riba, one of the seven deadly sins.” I sat up straight upon hearing this – having worked within Islamic finance for several years, the topic of riba was fascinating to me.
Riba, otherwise known as usury, is forbidden in Islam since it is considered unjust and exploitative. In the Quran, the sin of riba is considered so heinous that God pledges to make war on anyone who refuses to abandon it. Usury makes a nonsense of money, reducing its value by inflating debts. It takes money from the poor who are forced to borrow and gives it to the rich who can afford to lend.
On an international scale, usury has resulted in whole countries having to exploit their natural resources beyond the point where they can be replenished, in order to pay interest on their debts. Deforestation, intensive agriculture and degradation of the land parallel the sort of degradation and slavery forced on individuals by interest-bearing debt. I have personally witnessed the devastating impacts that interest-bearing debts can have, and have thus dedicated my career to finding alternatives to conventional banking, which thrives on an interest-based model.
In fact, one of the reasons I had come to Suriname with my team was to offer my expertise on Islamic finance to Trustbank (Suriname), a bank which had been operating on conventional banking principles but had decided to transform into a fully-fledged Islamic bank. Suriname is a small country on the northeastern coast of South America, with a small Muslim population of just under 14%. Trustbank’s decision to become sharia compliant was focused on serving the identified but unmet need for finance options for small and medium-sized enterprises (SMEs) by offering alternative funding sources.
"I feel very grateful to have been a part of a project that transformed a conventional strategic financial institution into a bank operating on sound ethical foundations in line with Islamic banking principles."
Trustbank appointed the Islamic Corporation for the Development of the Private Sector (ICD), part of IsDB, as its advisor to guide its transformation process and ensure the successful launch of its new sharia-compliant products. As advisors, our role was to help Trustbank establish a sharia governance structure, set up a sharia supervisory board, designate a sharia review function, and convert its conventional loans into Islamic financing alternatives, amongst others within the bank.
Sharia guidelines and related documentation were developed to strengthen this function and full documentation was also produced for the new range of Islamic products, including explanations of their structure and features, associated procedures, contracts and application forms. The bank opted for a proactive, immediate approach as opposed to phasing out its changes gradually. It organized an information fair to help its clients understand Islamic banking and the new products that it would now be offering.
I feel very grateful to have been a part of a project that transformed a conventional strategic financial institution into a bank operating on sound ethical foundations in line with Islamic banking principles. Islamic banking has proven stability compared with conventional banking thanks to its sustainable approach. The inclusion of an Islamic bank within the financial system of Suriname has diversified systemic stability risks and positively contributed to the country’s economic stability.
The new Islamic bank now provides ethical financial products and services to the people of Suriname. It promotes financial inclusion to those previously excluded on religious or ethical grounds, with an emphasis on SMEs, which have been recognized as the engines of sustainable growth throughout global economies.
Suriname hopes to use Trustbank to help position itself as the financial hub for the Caribbean and Latin American region. The first Caribbean Islamic Finance Forum, organized jointly by ICD and Trustbank Amanah, was held in Suriname in November 2019. It focused on opportunities and challenges for the development of the private sector in Suriname, with a special focus on the role of technology, innovation and strategic partnerships.
"Suriname now had an Islamic bank of its own"
According to the Islamic Financial Services Board, Trustbank’s transformation was a truly inspiring milestone for the global Islamic finance industry as it officially established an Islamic banking footprint in all six habitable continents of the world. The success of the project was recognized in 2019 when Trustbank won the Excellence Award at the 5th Islamic Retail Banking Awards. ICD was able to successfully deliver this project by leveraging its knowledge resources in providing advisory services. This triumph has helped provide alternative financial products in Suriname that avoid the use of riba.
After the imam finished his sermon, my colleague went up to him and told him about the success of Trustbank and the work we were involved in. The imam was truly moved by the success of the bank’s transformation and was pleased that IsDB had helped to make this possible. He raised his hands in prayer and thanked Allah that Suriname now had an Islamic bank of its own, a historic step towards saving the people of Suriname from the harmful bondage of riba.
Tears ran down his face as he explained that he had picked the topic of the sermon as he was concerned that the small Muslim population of Suriname would have no option but to engage in riba. However now, thanks to Trustbank’s sharia-compliant products, with the help of IsDB, this was no longer the case. He promised to tell his entire congregation about the bank’s transformation and expressed his gratitude once again before he left.
The memory of the imam’s tears has stayed with me since. The memory of a chance encounter at a small mosque in Suriname motivates me during the countless challenges faced as an employee of IsDB, striving to deliver impactful development projects that transform the lives of humanity. The work of this benevolent bank sows seeds of inspiration in some of the most unexpected places, transforming the hearts of those who cross its path.