IslamicFinance.de

Morocco's central bank has started talks with a body of Islamic scholars on establishing a central sharia board to oversee the country's fledgling Islamic finance industry. The board, composed of scholars and financial experts, would rule on whether instruments and activities complied with sharia principles. Moreover, the government plans to submit to parliament a bill regulating Islamic banks, which will be called participative banks under the legislation. Parliament's vote is expected by the last week of April.

Dubai Islamic Bank cut its dividend by a third - to 10 % - after the Central Bank denied approval for its payout to shareholders. But according to Kashif Moosa, the bank's head of investor relations, the regulator gave no reason why it had advised Dubai Islamic Bank (DIB) to cut its dividend.
The bank's shares fell 1.3 per cent to Dh2.19 each in trading after the announcement.
Last year, a consultation with the IMF recommended the UAE rein in dividend payments in its banking sector to prevent difficulties in managing the after-effects of Dubai's debt crisis.

Islamic banks operating in the UAE have objected to new lending rules enforced by the Central Bank early this year and requested amendments for their own business, motivating that some of the new rules violate Shariah banking.
The new lending law presented by the central bank for the country's 23 national banks and 28 foreign units capped personal loans at 20 times a borrower's monthly salary and stipulated the loan must be repaid within 48 months.

There are already 8 Islamic banks in the UAE with 260 branches and assets and liabilities of AED 269 Billion (US$ 73.1 Billion). This represents 17% of total assets and liabilities of the banking system in the UAE.
Sultan Bin Nasser Al Suwaidi, UAE Central Bank Governor, congratulated the Sultanate of Oman for licensing its first Islamic bank at a seminar on "Islamic Finance in a global perspective" which was held at the Central Bank.

Demand for the Kingdom of Bahrain sovereign debt, which the Central Bank manages on behalf of the Ministry of Finance, are still at low levels.
Demand for debt with longer maturities remained strong. The CBB was capable o issue 12 month Government Treasury Bills at a coverage of 211%.

Qatar sold $13.7bn of bonds to local banks as the country seeks to absorb excess cash with lenders.
The bonds, both Islamic and non-Shariah compliant, mature in three years. The conventional bond pays 5% interest.

The conventional way in which banks offer Shariah-compliant services and likely boost the performance of banks that focus solely on such services will be changed by the new rules for Islamic banking in Qatar released by the Central Bank in late August.
The new regulations, made public on August 29, prohibit conventional banks from allocating more than 10% of issued capital to Islamic banking operations and from opening additional branches for Islamic banking.

The UAE Central Bank started issuing the country's first Islamic certificates of deposits (ICDs) as part of a plan to create a new investment tool for Shariah-compliant banks in the country.
The new ICDs would be issued in dirham, US dollar and euro and their maturity date would range between one week and five years.

New rules for Islamic banking in Qatar released by the Central Bank in late August will change the way conventional banks offer sharia-compliant services and likely boost the performance of banks that focus solely on such services, reports Global Arab Network according to OBG.
The new regulations, made public on August 29, prohibit conventional banks from allocating more than 10% of issued capital to Islamic banking operations and from opening additional branches for Islamic banking. There is also a limit on mudaraba (profit-sharing) and musharaka (joint ventures) to 5% of a bank’s total Islamic operations.
The message seems to be that banks can either focus on conventional or sharia-compliant banking, but not both. The new rules come into effect immediately but banks have until the end of 2011 to fully comply.
While that may be true in the short term, the limits on conventional banks may spur them to increase product offerings in other areas and will likely increase competition among institutions that offer only sharia-compliant services.

The UAE is working on a mortgage law which will make it easier for people to buy residential units, UAE Central Bank Governor said.
Speaking at the seminar, the Central Bank governor said the government has also set up a committee to look into the Amlak issue.
The UAE government said in late 2008 that it would merge Amlak Finance and Tamweel and has been working on a plan to restructure them. Shares in the two firms have not traded since. But last month, Dubai Islamic took majority stake in Tamweel leaving Amlak's fate hanging in balance.
Sources told Emirates 24|7 on Wednesday that three Islamic banks - Emirates Islamic Bank, Dubai Bank and Noor Islamic Bank - are considering merger and then the merged entity will take over Amlak.

Two UAE banks have presented a plan for their merger to the Central Bank despite conditions made by one of them not to shoulder any losses suffered by the other bank.
The Emirates Islamic Bank (EIB), which has been locked in negotiations to merge or acquire Dubai Bank (DB), stipulated that the government should handle DB’s losses which could range between Dh500 million and Dh2 billion.
Dubai’s Government holds around 29.8 per cent of Dubai Bank, which has an authorised capital of nearly Dh3.4bn. It is controlled by the Dubai Banking Group, an affiliate of the government-owned Dubai Holding.