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PTI govt decides to promote Islamic banking in #Pakistan

The federal government of Pakistan has decided to initiate a comprehensive plan for the promotion of Islamic banking in the country. The National Assembly Standing Committee on Finance chaired by Asad Umar announced that the State Bank of Pakistan was in the process of formulating a seven-year plan and a comprehensive framework in this regard will be introduced within two months. The SBP officials gave a briefing to the committee about the Eradication of Riba Act, 2019. The chairman advised the standing committee on finance to expedite the work on the bill and constituted a sub-committee, headed by MNA Raza Nasrullah.

Steady uptrend for Islamic finance in Pakistan: SBP

The Islamic banking and finance sector in Pakistan continues to be on an upward trajectory, with assets, deposits and the number of branches of Islamic banks all showing solid growth. According to the latest Islamic Banking Bulletin issued by the State Bank of Pakistan on September 13, assets of Pakistan’s Islamic banking industry stood at Rs2,992bn ($19.8bn) by June-end, 2019, a growth of 20.6% as compared to June-end, 2018.

State Bank issues updated Islamic financing facility

The State Bank of #Pakistan issued an updated Islamic financing facility for the renewable energy projects. The financing under Islamic Financing Facility for Renewable Energy (IFRE) is now available to the customers under three categories. Under the first category, the prospective sponsors are setting up power projects with a capacity ranging from more than 1MW and up to 50MW for their own use, or sell electricity to the national grid or combination of both. The State Bank of Pakistan will make Mudarabah investment in general pool of Participating Islamic Financial Institutions (PIFIs) under IFRE. IFRE shall be effective immediately and financing shall be available for projects up-to June 30, 2022.

Emirates NBD coordinates $500m Islam-compliant syndicated loan for #Pakistan

Dubai's Emirates NBD has coordinated a $500m Islamic law-compliant syndicated loan for the government of Pakistan. The loan was provided by a consortium of 12 banks and was oversubscribed by more than 40%. The consortium comprised Emirates NBD, Commercial Bank of Dubai, Noor Bank, Allied Bank, Dubai Islamic Bank, First Abu Dhabi Bank, Mashreq Bank, Sharjah Islamic Bank, Samba Financial Group, Bank of Jordan, Habib Bank Limited and Union De Banques Arabes Et Francaises. The loan was organised as a murabaha.

Draft Bill Proposes Ban On #Cryptocurrencies In #India

India is considering a ban on cryptocurrencies. A draft bill explains that a Digital Rupee, which will be issued by the Reserve Bank of India (RBI), would be approved as legal tender, while all other digital currencies would be prohibited. However, the ban does not apply to anyone using distributed ledger technologies (DLT) or other related technologies for experiments or research, as long as cryptos are not being used for payments. The proposed penalty for violating the ban would be a fine or up to 10 years’ imprisonment, or both. The news comes after reports that RBI has been developing a blockchain platform for banking in its R&D branch. However, RBI has denied it had any involvement in the proposed legislation.

ACCA hosts Dr Amjad, founder of Islamic micro finance

Dr Muhammad Amjad Saqib, the founder of the Islamic micro finance company, Akhuwat, met with Alan Hatfield, executive director for strategy and development at ACCA London headquarters. In Pakistan, micro finance is proving popular amongst the growing SME sector. The country’s SME development authority calculates that nearly 90% of companies are SMEs, most of them operating in the informal sector, so the demand for micro finance is also growing. Akhuwat has opened over 850 branches in 486 cities/towns across Pakistan, enabling over 3.5 Million families to become self-reliant by extending interest-free loans worth more than £400 million. Dr Saqib's latest initiative is called Akhuwat University, which will provide higher education without any tuition fee to support the upward social mobility in the country.

'Halal' Ponzi Scams and Islamic Finance in #India – Need for a Strict Shariah-Compliance Certification Framework

Prominent Islamic Finance activists have been trying to create recognition and make an impact in the implementation of Islamic Finance in India since decades. Recent years have seen quite a few setbacks in the Islamic Finance initiatives, with many financial initiatives being eventually discovered as Ponzi schemes. Some of these prominent schemes include Heera Gold, Ambiant Marketing, and now the latest is called I Monetary Advisory (IMA). Investigations revealed that IMA did not even have a Shariah board to begin with, and often used non-Shariah compliant statements in its marketing resources. Despite claiming to be a Shariah-compliant investment avenue, IMA had promised a fixed minimum return. A country with a sizeable Muslim population like India demands a central Shariah-Compliance Certification platform that keeps a strict control over Islamic Finance activities.

With no official nod for halal funds, money scams arise

Investigation authorities are probing complaints that a Bengaluru-based company, which promised to route investors’ savings into halal investments, cheated them of 2000 crore. India does not recognise Islamic banking, but there are investment options for those who do not want to violate religious laws while investing their savings. Researcher Shafeeq Rahman says that Muslims have an unmet need for Shariah-compliant investments. Because they are more likely to run their own businesses, Muslims have more need for credit and go to groups that offer halal financial services. The problem is that these institutions use the claim of Shariah investments to lure depositors, but these groups are not regulated by government agencies.

Pakistani startup Tez Financial Services wins at Inclusive Fintech50

Pakistani fintech startup Tez Financial Services has been selected as one of the winners of 2019’s Inclusive Fintech 50. Tez was the only Pakistani startup to have qualified for the competition. Inclusive Fintech 50 is a competition to help early-stage fintech companies attract capital to benefit the world’s three billion financially underprivileged people. Tez Financial Services is the first fully digital Non-Bank Microfinance Company focused on serving the unbanked and underbanked in Pakistan. The founders of Tez were leading forces in the creation of Tameer Bank, Easypaisa, and CheckIn Solutions.

Government decides to issue fresh #Sukuk worth Rs 200 billion

Pakistan's Federal Government has decided to issue fresh Sukuk worth Rs 200 billion, in addition to earlier Sukuk of Rs 200 billion through the same consortium of Islamic banks aimed at reducing circular debt. The consortium comprising Meezan Bank Limited, Faysal Bank Limited, Bank Islami Pakistan Limited, Dubai Islamic Bank Pakistan, MCD Islamic Bank Limited and Al Baraka Bank Pakistan Limited have already submitted their term sheets to the Finance Division. The syndicate of Islamic Banks had also forwarded a tentative term sheet for Rs 100-200 billion which specifies that the facility is subject to availability of suitable assets. The energy sector's circular debt is around Rs 1.5 trillion. According to Minister for Power, Omer Ayub, the government would bring down circular debt to Rs 250 billion by December this year.

Financial inclusion of low-income groups a must for economic growth

Jameel Ahmad, Deputy Governor of State Bank of Pakistan believes that the newly adopted National Financial Inclusion Strategy (NFIS) will contribute significantly to the economic growth. He said the central bank and Pakistan's government have a firm resolve to reach the under-served groups. The NFIS would focus on the enhanced targets including Small-Medium Enterprises (SMEs), agriculture, housing and Islamic finance on an extended time-line to 2023. By 2023 the NFIS aims to enhance the usage of Digital Payments to 65 million active digital transaction accounts, to increase deposit to 55% of the GDP, to promote SME Finance to 700,000 enterprises, to increase Agricultural Finance disbursements to Rs.1.8 trillion, and serve 6 million farmers through digitalized solutions and to enhance share of Islamic Banking to 25% of the banking industry.

Bank Alfalah & Ghandhara Industries signed a MoU for Promoting Isuzu D Max Variants

Pakistan’s Bank Alfalah Islamic has recently signed a Memorandum of Understanding (MoU) with Ghandhara Industries Limited (GIL). Under this MoU, Bank Alfalah Islamic and Ghandhara Industries Limited have agreed on a joint campaign to promote “Isuzu D-Max Pickup variants” through Bank Alfalah Islamic’s Auto Finance product. The signing ceremony took place at Bank Alfalah Head Office, Islamic Banking Division in Karachi. The memorandum has been signed by Dr. Muhammad Imran, Group Head Bank Alfalah Islamic Banking Division and Mr. Muhammad Kuli Khan Khattak, DCEO Ghandhara Industries Limited.

Patterns of light and colour that bear endless repeating

The Monir Museum in Tehran is displaying the work of Monir Sahroudy Farmanfarmaian, first for a female artist in the country. She saw many of her works confiscated and destroyed following the Islamic Revolution in Iran in 1979, so she emigrated to New York. In 2004 she returned and felt able to reopen her studio and workshop in Tehran. Geometric patterning is part and parcel of Monir’s visual language. Her work synthesises traditional Islamic art and design and Western geometric abstraction.

Noor exits $6mln stake in #Pakistan’s Meezan Bank

Noor Financial Investment announced selling 9 million shares or 0.85% of its equity ownership in Meezan Bank, Pakistan's first and largest Islamic bank. The equity transaction is valued at $5.57 million or KWD 1.68 million. Following this exit transaction, Noor currently owns 39.53% equity in Meezan Bank. The financial impact of this transaction will be a profit of KWD 293,000 that will be registered in Noor's income statements of the third quarter of 2018, in addition to an increase of KWD 648,000 in the shareholders' equity rights. In mid-July, Noor announced selling 27.23 million shares or 2.56% of its equity in Meezan Bank at a value of $15.76 million or KWD 4.77 million.

#Pakistan likely to borrow $4bn loan from Islamic Development Bank: report

Pakistan plans to borrow over $4 billion from the Islamic Development Bank to bolster the country's low level of foreign currency reserves. A senior advisor in Islamabad said the paperwork is all in place. Finance minister-in-waiting Asad Umar has previously said that Pakistan must decide by the end of September if it would go to the International Monetary Fund (IMF) to bail out its economy. He reiterated his stance that Pakistan was examining other options as well as the IMF, including loans from friendly countries or remittances from overseas Pakistanis.

Looming economic crisis: #Sukuk, dollar-denominated bonds to be launched, says Asad

Pakistan is considering to launch dollar-denominated bond and Sukuk bond to tap a favorable response from expatriates in order to tackle the looming economic crisis. Finance minister Asad Umar said the coming government will have to take tough decisions in the first six weeks after coming into power. Asad promised to grant independence to the Pakistan Bureau of Statistics in order to get reliable official data on various sectors of the economy. He pledged to take action on it in the first 100 days of government. The situation has touched such an alarming position as the current account deficit used to be in the range of $2 billion on per annum basis, which now peaked to $2 billion on monthly basis.

#Kazakhstan: Will Astana’s financial gamble pay off?

With the official opening of the Astana International Financial Center (AIFC), Kazakhstan aims to become the region’s main financial hub. The aspiration is for the center to draw $40 billion in finance by 2025 and in the process rebrand oil-rich Kazakhstan as a financial hotspot. However, at the moment it is very much a work in progress. The stock exchange is not yet trading. According to AIFC chief executive Kairat Kelimbetov, the center will operate according to English common law. A court staffed with English barristers and an arbitration center will be available for dispute resolution. But the sobering reality is that of the 49 companies registered at the AIFC, most are no-names. The mightiest player registered at the AIFC is the China Development Bank, a fact that signals a welcome vote of confidence from Beijing.

Bank Pasargad of #Iran to Open Branch in #India: Report

India has reportedly approved a proposal from Bank Pasargad of Iran to open a branch in Mumbai. The Federation of Indian Export Organizations had earlier objected the entry of Iranian banks into India. In the wake of new US sanctions, India may explore the possibility of reviving the rupee-rial arrangement to import oil from Iran that it has used in the past. The presence of an Iranian bank in India will ensure the smooth flow of funds between the two countries. US President Donald Trump announced on May 8 that Washington was walking away from the nuclear agreement between Iran and the UN Security Council. Trump also said he would reinstate US nuclear sanctions on Iran and impose economic bans on the Islamic Republic.

#China’s support is critically instrumental in developing Islamic finance

While China and Arab countries discuss ways to develop their bilateral ties, #Kazakhstan aims to become a new global financial hub. At the newly established Astana International Financial Center (AIFC) an economic event was carried out between July 3rd and 5th to talk about the main issues of global finance. Experts have emphasized China has a priority role in the global economy and that China’s support can be very instrumental in the development of Islamic Finance. Kazakhstan has also positioned itself to take advantage of China’s Belt and Road initiative as it strived to draw investors from Central Asian countries as well as from the Arab world. Lawyers have also stressed that because the newly formed Astana International Exchange will be operating under the principles of English common law, it will create even more opportunities for collaboration between Central Asian countries and the Arab world.

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