332 chapter eight
was officially opened. The purpose of the Bank is to foster the eco-
nomic development and social progress of member countries and
Muslim communities individually and jointly in accordance with the
principles of Sharì"ah.
The functions of the IDB are to participate in equity capital and
grant loans for productive projects and enterprises besides providing
financial assistance to member countries in other forms for economic
and social development. Moreover, IDB is required to establish and
operate special funds for specific purposes including a fund for assis-
tance to Muslim communities in non-member countries. IDB, which
is authorized to accept deposits and to mobilize financial resources
through Sharì"ah compatible modes, is charged with the responsibility
of assisting in the promotion of foreign trade among member coun-
tries; providing technical assistance to member countries, and extend-
ing training facilities for personnel engaged in development activities
in these countries (IDB website).
The shareholders of IDB are governments of Muslim countries,
some 57 countries which are members in the Organization of Islamic
Conference (OIC), represented on the Board by the members’ Ministers
of Finance (the Treasurers). The authorized capital of the Bank
increased from two billion Islamic Dinars in 1975, to six billion ID
in 1992, and to fifteen billion ID in 2001, with a par value per
share of 10,000 ID, and a subscribed capital of slightly over eight
billion ID. Starting with a Head Office in Jeddah, Kingdom of Saudi
Arabia, at the time of, and for a few years after, its establishment,
IDB widened its scope of representation to include regional offices
in Rabat, Morocco, Kula Lumpur, Malaysia, Almaty, Kazkhastan,
and field representatives in another eleven member countries in the
Middle-East, Central Asia, South-East Asia, and Africa. Interestingly
enough, to facilitate communication, IDB has three official languages:
Arabic, English and French.
IDB operations cover a wide range. They are mainly: project
financing, trade financing, private sector promotion, special assistance
and scholarships, technical cooperation, young researchers support
programme, Islamic banks’ portfolio, unit trust investment fund and
infrastructure fund.
In line with the Sharì"ah, modes of finance in IDB are mainly as
follows (IDB website):
Loans. These are interest free but with an administrative charge
ranging between 0.75% and 2.5% per annum, with a grace period