Islamic Banking

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CBN understudies Malaysia in financial crisis management

Central Bank of Nigeria (CBN) confirmed that the two institutions signed a Memorandum of Understanding (MoU) to share expertise and exchange relevant information in the areas of banking supervision, Small and Medium Enterprises (SMEs), Microfinance and Islamic Finance, Monetary Policy and Development Finance Institutions. The MoU was signed at the headquarters of the Malaysian Central Bank, the Bank Negara in Kuala Lumpur.

New financial system blueprint being drawn up

Malaysia’s competitive advantage in Islamic finance will strengthen as the country evolves into an international hub for Islamic finance.

Islamic Wealth Management Report published by Bank Sarasin

Press Release

The report provides investors with an in-depth overview of the various asset classes in Islamic wealth management along with a synopsis of the market scenario during the past 18 months. The report also explores the concept of estate and succession planning, which Sarasin believes is insufficiently addressed in the Islamic finance industry and is a key element of Sarasin’s Islamic wealth management offering. Finally, the report provides an insight into the bank’s economic outlook for 2010.

The key issues and challenges addressed in the report are:

  • how Sharia screening reduced the downside in volatile markets and how it affects the finance industry and investors,
  • the behaviour of direct real estate investments in comparison with real estate funds and Sharia-compliant real estate investment trusts,
  • the income-related role of Sukuk within Islamic balanced portfolios and the probability of defaults,
  • a comparison between various Islamic investment funds ranging from income-oriented to commodity, real estate and equity funds,
  • the size and future of the Islamic private equity and venture capital industry,

Launch of International Islamic Finance Journal from Dubai

Press Release

Today sees the launch of a new Journal on Islamic finance from dedicated Islamic finance media entity Yasaar Media.

The Journal, called So Far – the Journal of Strategic Thinking in Islamic Finance, is written and edited by members of an Islamic finance Think Tank and is modelled on traditional academic journals. The difference with So Far is that the members of the Think Tank are predominantly practitioners rather than academics.
Member of the Think Tank are drawn from the ranks of committed Islamic finance professionals around the world and range from the Gulf and the Far East to the USA and Europe.

Each issue of So Far is dedicated to a single topic of core importance to the Islamic finance industry – and the launch issue looks at the thorny issue of the problems facing the Sukuk market. Unlike many other journals So Far is distributed free in PDF format and is available from a variety of sources including Yasaar Media thus guaranteeing maximum readership and exposure.

Shari’ah-Compliant Master Agreement Introduced for Hedging Islamic Finance Transactions

On March 1, 2010 after many months of work, ISDA (the International Swaps and Derivatives Association) and IIFM (International Islamic Financial Market) jointly issued the first Shari'ah-compliant master agreement for over-the-counter (OTC) derivatives.[1] Styled the "ISDA / IIFM Ta'Hawwut Master Agreement" (ta'hawwut signifies "hedging" in Arabic), the new template master agreement (the "Ta'Hawwut Agreement") provides a framework for the expansion of derivatives activity in the Middle East, South Asia and many regions throughout the world where hedging is not currently standard practice due to ethical concerns. While based on the 2002 ISDA Master Agreement (the "2002 Master Agreement") and with many terms familiar to participants in swap markets, the Ta'Hawwut Agreement has been developed under the guidance and approval of the IIFM Shari'ah Advisory Panel. The Ta'Hawwut Agreement is therefore expected to be used as a reference for market participants where they or their customers need to hedge risks in line with Shari'ah principles.

Saudi regulator fines top Islamic lender al-Rajhi

Saudi Arabia's regulator has fined the country's biggest Islamic bank, Al-Rajhi , for not notifying it about the resignation of two senior executives, the regulator said.

Shari’ah Being Used by a Debtor to Avoid Payment Obligations Under a Wakala Agreement

Blom Developments Bank SAL (“Blom”) placed US$10 million with The Investment Dar Company KSCC (“TID”)under a wakala agreement (the “Agreement.

The Agreement was governed by English law and provided that TID would invest the Capital Sum (as the agent of Blom) in a shari’ah compliant manner. The Agreement further provided that at the end of the investment period TID had an obligation to pay to Blom the Capital Sum together with the anticipated agreed profit (the “Profit”).

TID failed to fulfill its obligations under the Agreement to pay to Blom the Capital Sum and the Profit at the end of the investment period. As a result Blom brought a summary judgment application in the English High Court. The Court ordered TID to pay to Blom the Capital Sum (but not the Profit).

Al Rajhi Capital, Arcapita announce launch of $500m real estate income fund

Al Rajhi Capital, the investment banking subsidiary of Saudi Arabia's Al Rajhi Bank, and Arcapita Bank B.S.C.(c), an international investment firm headquartered in Bahrain, announced today the launch of a $500m (SR1.875bn) fund, the ARC Real Estate Income Fund.

Islamic Finance must turn to its roots, by Muhammad Ayub

The global economy is facing a deep downturn as a result of the crisis. It was due to excessive
ability to create money and credit for earning increasing profits without creating anything of
value for use by the mankind. The system needs radical change in the approach, principles and
the operation of economic and financial systems. Creation of money, and lending it on interest –
interest based debts and financial obligations leading to undue receivables for the lenders, is
the biggest and primary problem of the conventional system. Islamic principles of finance
provide checks for the factors that have distorted the system. Enhanced supply of risk-related
capital, restricted risk taking, balanced return rate structure based on the real sector economic
activities, and supply of money commensurate with prospects of growth in an economy, provide
a sound basis for sustainable development. Hence, Islamic financial institutions and markets
have better ability to sustain in the hard times. Islamic banking industry should not only have
escaped unharmed during the crisis, it should also have availed the opportunity of developing

Islamic banks unfazed by new competition

The country’s existing Islamic banking players remain unfazed by the upcoming competition in the form of more licences to be issued for world-class Islamic banks and takaful operators. CIMB Islamic Bank Bhd executive director and chief executive officer Badlisyah Abdul Ghani said the move would result in a greater variety of syariah-based financial services and products being offered to the public.

Barclays launches sharia-compliant financing facility

But about 10 per cent of the Dubai’s US$80 billion debt load is estimated to comply with Shariah, casting the spot light on the credibility pedestal Islamic financing has ridden on over the years. Islamic banking experts at IIBI say that Islamic finance as a viable solution to get rid of the weaknesses of conventional finance is mainly limited to theoretical debate.

AAOIFI Standards to be translated into Russian

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is co-operating with the Mufties Council of Russia to translate AAOIFI's international Islamic finance standards into Russian language. The translated standards are expected to help regulatory authorities and financial institutions in developing Islamic finance in jurisdictions that use Russian language as their official language.

Experts pitch for Islamic banking in India

With the global financial crisis putting the spotlight on "casino capitalism" of the West, leading scholars and experts from the Arab world on Thursday pitched for interest-free Islamic banking as a solution and its introduction in India, home to the world's largest Muslim minority.

Growing interest in Bahrain banking sector

Efforts to make Bahrain and its economy more business friendly has attracted growing interest from the Gulf and beyond, Rasheed Al-Maraj, the Governor of the Central Bank of Bahrain (CBB), told CNBC Europe’s “Closing Bell” programme in an interview from the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland.

Emirates NBD to discontinue S&P's credit ratings service

Dubai Emirates NBD announced yesterday that the company has decided to discontinue use of Standard & Poor's (S&P) Investors Service for rating of its banking subsidiaries, Emirates Bank International (EBI) and National Bank of Dubai (NBD).


The Bank of Kuwait and the Middle East (BKME) expects 2010 to prove a year of major and strategic changes towards operation as an Islamic Sharia-compliant bank as of the second quarter, upon completion of procedures to obtain the required Amiri Decree approving the conversion.

Dawood Islamic Bank opens branches

Dawood Islamic Bank, Pakistan’s only double AA rated bank has completed its hat trick by inaugurating three more branches in Lahore.


Gassner's picture invites its users to betatest the Islamic Finance WIKI

Dear User,

as salamu alaikum,

In these days I am testing the new function of The Islamic Finance WIKI.

For long time I felt a need to have a proper encyclopaedia on Islamic finance, which is up to date and easily accessible for all industry members.

Now I started, initially with a small glossary, which I want to add up. Also from the start other experts are invited to contribute: Just in the same way as the famous online Wikipedia was created. We do not need 1.000.000 entries, but just about 1000 good entries would help spreading knowledge and improving best practice. With far more than 5,000 visitors to each month pretty realistic, dont you think?

So, please visit:

and share some comments.

Editing rights for the time (till I have got a team of volunteers) on manual request to avoid spamming (yes, was already spammed with comments about non Sharia compliant activities...). Please indicate your background, it will not be stored on the website itself, just for me to avoid unpleasant vandalization of the site itself.

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