Islamic Banking

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Grameen-type bank opens in Bahrain

Nobel Laureate Professor Muhammad Yunus and the Chairman of the Board of Trustees of the Royal Charities Organization, Prince Shaikh Nasser bin Hamad Al Khalifa inaugurated the Family Bank, a microfinance bank licensed by the Central Bank of Bahrain, at a ceremony held at the Gulf Hotel Convention Hall in Bahrain recently.

Thomson Reuters unveils risk management solution for Islamic Banking

Thomson Reuters announced the launch of a risk management system specifically tailored for Islamic banking.

Kondor+ Suite for Islamic Banking is a real time trade and risk management solution, which will provide full front-to-back and cross-asset coverage for Islamic banks as well as Islamic windows in conventional banks.

Strategic tie up between "Sharjah Islamic Bank" and "Noor Takaful"

Sharjah Islamic Bank (SIB) has signed an agreement with Noor Takaful according to which the Bank will offer Noor Takaful Motor Takaful Insurance to all SIB customers through its network of 23 branches. This strategic partnership will enable SIB customers to access Noor Takaful's motor insurance plans for their currently owned or newly purchased sedans and 4x4s at preferential rates and with minimum documentation.

QIIB lends a helping hand here

Qatar International Islamic (QIIB) Bank has made a donation to support the programmes of the Centre for Educational Perspectives, Qatar.

Building a Viable Microfinance Sector in Afghanistan

The microfinance sector in Afghanistan is going through a period of reform which is largely due to the consequence of an early emphasis on rapidly achieving operational sustainability.

AREU researched on the impact of microcredit on informal credit systems and rural livelihoods illustrated by the viability of challenges faced by MFIs. These challenges were linked to having invested little effort in determining the viability of clients by understanding the social and economic contexts in which they were to invest their loans or in offering loan products meeting client needs.

MISFA's reforms have initially targeted MFIs' internal structures, capacity, and control systems. However, they also recognise the need to consider greater diversity of loan products and methodologies to meet client needs. To support diversification in the future, after internal reforms are in place, MISFA has committed to an action research agenda to investigate demand for savings products, agriculture and livestock loans, and Islamic finance products.

Full report at:

Jamsostek's subsidiary to acquire local sharia banks

State insurance company PT Jamsostek plans to acquire stakes in two local sharia banks this year through a joint agreement with the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD).

The new investment arm of the company, the Jamsostek Investment Company (JIC), expected to be established in the first semester of this year, will purchase the stake of the country's biggest sharia lender BNI Syariah and Bank Syariah Bukopin by the end of this year, Jamsostek president director Hotbonar Siaga said on Friday.

Gassner's picture

Congrats to Brunei for the new credit card rules

Dear Reader,

I am very glad to read the news that the first Muslim country is taking a strict policy against credit cards in its country. Brunei shows courage and leadership and shall be congratulated by the whole community of Islamic finance.

Even the US ambassador is supporting and defending the rules which for a transition period makes life of consumers more difficult, but he reminds for the good effect it has on the long run:

Remember: Credit cards are a major part of the world financial crisis, hundred of thousands of people went into debt and even worse in a vicious circle of debt. There is barely on consumer level a financial product spreading more harm, whether or not it is Islamically replicated.

See my previous blog on it: and the entry in the Islamic Finance WIKI:

Best regards,

Michael Saleh Gassner

Khurshid backs Islamic banking concept of Kerala

The Centre has offered a helping hand to Kerala in revoking a stay order by the state high court against setting up of an Islamic bank.

Noting that the court order could hamper investment opportunities in the country, Union minority affairs minister Salman Khurshid said the Centre would coordinate with the state government in dealing with the issue legally.

The Kerala government cleared the project after a feasibility study found that Islamic bank was a viable proposition in Kerala. A company was also registered to take the process forward. The share capital of the proposed bank had been fixed at Rs 1,000 crore.

According to the Islamic banking concept, the bank will not pay any interest to customers. A Sharia board can decide what sort of investments the bank can make. The bank will also have Sharia-compliant banking products.

Profits made out of the investments will be distributed to shareholders.

Sharia banking grows strong in Indonesia

The people of West Java also showed their support by injecting Rp 106 billion into the bank. Although its business was not too bright in its early days, the bank recorded a profit of Rp 372.5 billion in the second quarter of 2009. The achievement of Bank Muamalat is proof of the great potential of sharia banking in Indonesia. Sharia banking is based on Islamic law.

Bank Indonesia data reveals there are currently five sharia banks operating in the country, namely Bank Syariah Mandiri, Bank Muamalat Indonesia, Bank Syariah Mega, Bank Syariah Bukopin and Bank Syariah BRI. Twenty-six other banks have sharia banking units, such as Bank Permata, Bank BNI, Bank CIMB-Niaga, Bank Danamon and BPD DKI.

The Acting Governor of Bank Indonesia said that banks based on Islamic law are predicted to enjoy further growth in 2010. Darmin added that sharia banks would continue to flourish due to the organic growth within existing banks and the establishment of new sharia banks and unit.

Is foreign investment the answer to Iraq's banking needs?

A muscular banking sector will make or break whether Iraq is to rebuild and prosper.

Iraq's financial architecture to support a growing, privatised economy is a bottom-up operation. The country remains a cash economy with a thriving black market. Private banks are thin on the ground, lending is sparse and there is no ingrained credit culture.

Local focus

In terms of commercial banking in the country, the landscape is principally local Iraqi banks and joint-venture banks. Products offered are in four main areas: remittances/cash transfers and some foreign exchange; trade finance; commercial lending; and securities and stockmarket trading. Activity in all of these areas is fairly limited.

Lending potential

Sakana - BMI Bank in Islamic Financing deal

Bahrain-based Sakana Holistic Housing Solutions and BMI Bank (BMI), an associate of Bank Muscat, signed a Commodity Murabaha Islamic Financing facility whereby BMI Bank provided BD 3 Million funding for 1 year to Sakana towards working capital requirements.

This agreement is in continuation of a 2 year relationship which both organizations with Islamic financing facilities amounting to BD 8.2 Million extended by BMI to Sakana which were repaid on due date.

Alrajhi Bank has achieved the highest profits among all Saudi Banks

Mr. Abdullah Bin Sulaiman Al Rajhi, Managing Director and Chief Executive Officer of Al Rajhi Bank announced that the bank has achieved a net profit for 2009 amounted to SAR 6,767 million ($1,804 million) compared to SAR 6,525 million ($1740 million) in 2008 with a rise of 4 per cent.

France seeks Islamic financial system

The laicist French government seeks to make amendments to laws improving Islamic finance investors access to France. Although a relevant draft law was turned down by the Constitutional Council in form, but not in content, French Minister of Economy, Industry and Employment Christine Lagrade made it certain that the government would work further. The French minister's advisor Thierry Dissaux told KUNA that the government would introduce amendments to French legal and tax systems in order to match Islamic financial principles.

According to recent studies, Islamic financial investments in France are estimated at roughly USD 120 billion.

Talal al-Kandari reported on Kuna.

Alinma profit plunges 85%

Alinma Bank's profit fell by 85 percent in the fourth quarter of 2009 as its net income amounted to SR5.6 million ($1.49 million), compared to SR38.6 million ($10.29 million) for the previous quarter, according to a posting on the Saudi stock market (Tadawul) website on Saturday.

Benzinga Snapshot On Islamic Bonds (Sukuk): Going Strong In 2010?

The sukuk market, which has been gaining ground since the second half of 2009, is expected to chart stronger growth in 2010, buoyed by the global economic recovery, low interest rates and the Government's pump-priming initiatives.

Stress Testing Islamic Banks

Article on Stress Testing Islamic Banks in Business Islamica

Keeping Pace: Islamic Banks and Stress Testing
A wake-up call has been raised by the current crisis, mainly in countries offering both conventional and Islamic forms of banking. These countries have had to tackle two issues. First, managing the crisis, which has largely affected conventional banks, and second, attempting to gauge the impact of the crisis on the Islamic sector...

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Bank Islam taps into IPO business

Bank Islam Malaysia Bhd is expanding its corporate investment banking business to include initial public offerings (IPOs) as part of its expansion drive.

BKME to go Islamic in Q2, achieves 13 percent growth, Bank to be renamed ‘Al Ahli Al Muttahad’

Bank of Kuwait and Middle East (BKME) has achieved a growth of 13 percent in the last three years, and is now undergoing a change to become fully Sharia-compliant.

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