IslamicFinance.de

Bonki Rushdi Tojikiston (BRT), based in Tajikistan, has signed an advisory services agreement with the Islamic Corporation for the Development of the Private Sector (ICD) to process and support its conversion into Shariah-compliant operations. The agreement is designed to develop an advisory process to effectively deliver full conversion by also identifying challenges and addressing impediments. The ICD will dedicate seven key teams across the full conversion process in areas of project management, Shariah compliance, treasury, accounting, human resources, information technology, marketing and legal framework. BRT is hoping to become the leading Shariah-compliant platform in Tajikistan.

Bahrain-based Seera Investment Bank B.S.C. has announced the successful completion of a new transaction in the UK Dementia Care sector. The transaction comprises a Shari'a compliant equity investment in a dementia care focused housing development in London, United Kingdom. The development, the first of its kind, when completed will provide circa 115 housing units providing specialized care to dementia sufferers. The project will be developed over a 3 to 4 year period. The units are expected to be sold over the development period with distribution of substantially all the originally invested capital in the 4th year of investment together with a part of the profits. Upon completion of the development the project will then be held to benefit from the ongoing care revenues.

The United Arab Emirates' bank industry association has discussed a proposal to create a centralised sharia board that would monitor Islamic banking. The central bank had proposed setting up a Higher Sharia Authority that would complement and oversee the work of sharia boards at individual Islamic banks. Details of the timing and structure of the new entity were not specified. The UAE Banks Federation, which represents 50 banks, also said on Sunday that it had approved the appointment of a new, independent monitoring agency that would help to implement its code of conduct for member institutions. It did not give details.

King Salman has reorganized his cabinet, removed princes from government roles, merged ministries and realigned succession since ascending to the throne in January. As a consequence, Saudi companies have yet to market a single security in 2015, making it the country’s quietest start for Islamic sales in nine year. The companies need some stability before they start looking at sukuk-type issuance. Saudi Arabia is pursuing a $130 billion spending plan to diversify its economy away from oil, and has vowed to invest in major infrastructure projects. King Salman’s changes will impact many areas, especially financial markets.

Indonesian airline Garuda Indonesia has mandated a total of 15 banks to arrange its first dollar outing, which will be executed in sukuk format. The company has chosen National Bank of Abu Dhabi (NBAD) as sole global co-ordinator. Dubai Islamic Bank and NBAD are working as joint structuring banks.

One serious complaint against the prevalent model of Islamic banking is that interest is being charged in the garb of service fee. In fact loans from Islamic banks are much costlier than those from conventional financial institutions, particularly public sector banks. Thus, one issue that must engage us is that if Islamic banking is a viable alternative for us, how can we justify the collapse of so many Islamic financial institutions in India in recent times. The real problem is that we are not prepared for a reasoned debate. Confusion continues to prevail with sharp division of opinion. The spate of failures of Islamic banks in India have caused untold suffering to small depositors. There is no alternative except to transact with conventional banks.

The Crocus-Expo Center in Moscow has opened Moscow Halal Expo 2015. Over 200 halal companies from Russia and other countries will be presenting their products until May 23. The main theme of the exposition this year will be growth and development of national manufacturers and international commercial and investment relations with the Islamic world. Food, fashion, tourism, financial and medical companies are taking part in Halal Expo this year. Madina Kalimullina, the director of the exposition, explained that one of the main goals of the Halal Expo was to demonstrate development of the halal market in Russia.

MCB Arif Habib Savings and Investments Limited ("MCBAH") has announced that it has appointed a Shariah Supervisory Board under the Chairmanship of former Justice Mufti Muhammad Taqi Usmani for their existing as well as future Shaiah Compliant Mutual Funds, Voluntary Pension Schemes (VPS), Administrative Plans and Shariah Compliant Investment Advisory Mandates. Other members of the Shariah Supervisory Board are Dr Muhammad Zubair Usmani and Dr Ejaz Ahmed Samdani. Apart from advising MCBAH on Shariah matters, the Shariah Board will give expert guidance in introducing and implementing new investment models and products based on international Shariah research.

Short term Sukuk rated A-1 by Standard and Poor’s Rating Services (S&P’s) have been issued by the International Islamic Liquidity Management (IILM). IILM order book picks up from previous auction for A-1 rated (S&P) Sukuk. $490m issued from orders received of $1.288 Billion from 10 Bids. IILM sells its Sukuk through its primary dealers, who consist of: Abu Dhabi Islamic Bank, AlBaraka Turk, CIMB Islamic Bank Bhd, Luxembourg's KBL Private Bankers, Kuwait Finance House, Maybank Islamic Bhd, National Bank of Abu Dhabi, Qatar National Bank, Standard Chartered Bank and Barwa Bank.

Not only is Islamic finance gaining broader recognition in financial markets, it's also becoming a viable "alternative" source of funding to address pressing developmental challenges, eliminate extreme poverty and boost shared prosperity in developing and emerging economies. Islamic finance can make significant contributions to economic development, given its direct link to physical assets and the real economy. Moreover, by expanding the range and reach of financial products, Islamic finance could help improve financial access and foster the inclusion of those who are now deprived of financial services. Islamic finance also helps strengthen financial stability. However, the industry will also need to address several challenges.

Indonesia completed its largest-ever global sukuk sale, selling US$2 billion of Islamic bonds at the lowest yield in three years. The Finance Ministry issued the notes at 4.325 per cent, lower than the initial 4.55 per cent indicated, Robert Pakpahan, director general at the budget financing and risk management office, said in a text message on Friday. That compares with the 4.35 per cent rate paid on similar Shariah-compliant debt sold last year and the record-low 3.3 per cent on 10-year sukuk issued in 2012.

Islamic lender Bank Asya has not yet filed all the documents sought by Turkey's banking watchdog BDDK after the regulators took over the bank's management and seized a small stake in it earlier this year, BDDK head Mehmet Ali Akben said on Wednesday. The government has said the management of the bank, founded by followers of President Tayyip Erdogan's ally-turned-foe Islamic cleric Fethullah Gulen, was taken over because it failed to meet some legal criteria.

With expanding economies and hundreds of million Muslims, Africa deserves to be a bigger part of Islamic finance. After a slow start, there are signs the sector is beginning to gain the crucial mass and legislative backing it needs. Senegal's CFAFr 100 billion ($200 million) debut last June was Africa's biggest,ever sovereign sukuk, attracting both local and international buyers. South Africa followed in September with a $500 million 5.75-year deal that was only the third-ever sukuk issued by a non-Muslim majority country. Those in the industry argue that Africa's new-found visibility as a market for Islamic finance is long overdue.

BankIslami Pakistan Limited formally started an Internal Hiring program for former KASB employees to help them assimilate better in the amalgamated entity. While interacting with former KASB employees at the launching ceremony of the Internal Hiring initiative, Mr. Hasan A Bilgrami, CEO BankIslami, reiterated that the Bank shall ensure maximum job security and adjust the staff in internal placements by training them in Islamic Banking as well as other job related skill set.

Turkish Deputy Prime Minister Ali Babacan said on Wednesday that the growth of Islamic banking would strengthen Turkey’s financial system, praising the rapid growth of Islamic banks. Speaking at the 14th General Assembly meeting of the Participation Banks Association of Turkey in Istanbul, Babacan said the latest global economic crisis showed that interest-free financial methods are much more reliable, much more stable, and much more robust. His remarks came after one of Turkey's largest state-controlled banks, Ziraat Bank, was authorized by the country's banking regulator to start operations in its Islamic banking division last week. He also stated that an insurance system should also be developed using interest-free practice

Big-time criminals engaging in major financial crimes that effectively involve the theft of billions of dollars from the public aren’t being prosecuted. Today we learned of yet another huge settlement by five of the largest banks operating in our country. The list includes JPMorgan Chase, Citigroup, Barclays, the Royal Bank of Scotland UBS. Each of these banks admitted to engaging in criminal activity. But banks don’t commit crimes. People working for banks commit crime. And when people working for banks commit crime, it’s the responsibility of our Justice Department to indict them.

Fitch Ratings has assigned Indonesia's proposed sovereign global certificates (sukuk) issued through Perusahaan Penerbit SBSN Indonesia III (PPSI-III) an expected 'BBB-(EXP)' rating. The expected rating is in line with Indonesia's Long-Term Foreign Currency Issuer Default Rating (IDR) of 'BBB-', which has a Stable Outlook. The rating reflects Fitch's view that cash flows supporting payment on the sukuk will constitute direct, unconditional, unsecured and general obligations of Indonesia, ranking equally with Indonesia's unsecured and unsubordinated marketable external debt. The rating will be sensitive to any changes in Indonesia's Long-Term Foreign Currency IDR.

The recent IMF paper, Rethinking Financial Deepening: Stability and Growth in Emerging Markets, is focused on the impact of financial development on growth in emerging markets, but its authors clearly viewed the findings as germane to advanced economies. Their conclusion was that the growth benefits of financial deepening were positive only up to a certain point, and after that point, increased depth became a drag. But what is most surprising about the IMF paper is that the growth benefit of more complex and extensive banking systems topped out at a comparatively low level of size and sophistication.

The expanding reach of Islamic finance promises to carry a number of potential benefits. For example, Islamic financial institutions are less exposed to crisis because of their risk-sharing features. Another advantage is that Islamic finance can attract a large number of people into the banking system who have previously refrained for religious reasons. But while growing in scope, there are challenges for the industry to develop in a safe and sound manner. The IMF examined some of these issues in a recently published Staff Discussion Note, trying to understand under what circumstances the potential of Islamic Finance can be realized.

The Governor of the National Bank of Kazakhstan, H.E. Kairat Kelimbetov, launched the Islamic Financial Services Industry (IFSI) Stability Report 2015 during the Opening Session of the 12th Islamic Financial Services Board (IFSB) Summit on 20 May in Almaty, Kazakhstan. In essence, the IFSI Stability Report 2015 discusses the following topics: An overview of the IFSI as well as updates on trends and developments in the three sectors of the industry; Initiatives undertaken by international standard-setting bodies; Surveillance framework for the global financial system including identification of the gaps; Emerging issues in Islamic finance. The IFSI Stability Report 2015 aims to contribute to a wider cross-border engagement on stability issues in Islamic finance.