MANAMA, Oct 29: Islamic banks set up a specialised rating agency in Bahrain on Tuesday to evaluate Islamic financial institutions along with Islamic instruments to help make them acceptable internationally.

Bahrain Islamic Bank head Adnan Youssef said banks and financial houses from Bahrain, Saudi Arabia, United Arab Emirates, Malaysia, Kuwait and Pakistan elected the board of directors of the new Islamic International Rating Agency (IIRA).

The agency has a $1 million paid-up capital and a $10 million authorised capital, said Youssef, whose Bahrain-based bank has an 11-per cent stake in the IIRA.

“It’s the first Islamic agency that will rate Islamic banks to help them develop their business with foreign banks. It will also help make Islamic instruments acceptable internationally,” he told reporters.

Islamic Development Bank (IDB) holds a majority stake of 42 per cent in the IIRA which will start operations in the first quarter of 2003, Youssef said. Cyprus-based Capital Intelligence owns two per cent of IIRA.—Reuters