IslamicFinance.de

Pakistan's central bank has updated guidance on sharia governance for Islamic finance institutions. The goal is to expand the scope of external audits to help mitigate conflicts of interest and increase transparency. Those religious scholars who are members of an Islamic bank's sharia board are now barred from serving in any external audit firm. From now on, external sharia audits will have to cover pool-management practices and technology systems. This includes the way Islamic banks calculate distribution of profit and loss to depositors, the tracking of assets, and the allocation of income and expenses. The move is designed to separate the verification of profit and loss distribution between the banks and the external auditors, in contrast to the joint verification that was allowed under earlier guidance.

Maybank Islamic hopes to attract RM2 billion (USD453 million) in deposits – within a year – by launching two new financial products. The products are Foreign Currency Mudharabah-i (FCM-i) and the Profit Now Account-i (PNA-i). FCM-i is a short-term Islamic foreign currency term deposit account based on the principle of Mudharabah. Dividends on FCM-i are based on an agreed profit-sharing ratio which is agreed up-front. The actual dividend will then be calculated on this ratio and the amount payable will be known upon maturity of the investment. The minimum deposit for individual customer is equivalent to USD5,000; tenures range from one to 12 months.

The principal reasons are the small size of Islamic banks, and the additional legal transactions involved with Islamic mortgages. In the UK, Muslims are often surprised to find that Shariah compliant Islamic mortgages are noticeably more expensive than conventional ones. A conventional mortgage is a reasonably simple transaction to document legally. Conversely, a residential Islamic mortgage involves both the bank and the new owner occupier purchasing the property jointly. The contracts used are less standardised and there are simply more pieces of legal paperwork involved in an Islamic mortgage. Furthermore, the stand-alone Islamic banks in the UK are very small compared with the very large conventional banks. All these costs must ultimately be borne by the customers and are reflected in the higher prices Islamic banks charge for Islamic mortgages.

Turkey's state grain board TMO and construction firm Gap Insaat have received regulatory approval for debut sukuk sales. Turkey has seen steady issuance of sukuk from the government and the country's Islamic banks, but an increase in corporate issuance could help tap into a much wider stable of issuers. According to the country's Capital Markets Board, the TMO will raise 150 million lira ($41.6 million) via a sukuk that will be arranged by Islamic lender Kuveyt Turk. Turkey is seeking to build a bigger role in the industry and forge closer ties with fast-growing economies in the Gulf and southeast Asia. The Turkish Treasury hired banks to arrange a sale of sukuk in the international markets, with meetings set to begin this week in the United Arab Emirates.

Takaful Ikhlas aims to introduce its online platform for basic term life insurance to encourage youths to obtain insurance coverage. Senior Vice-President, Wan Rosli Shaharuddin Wan Yaacob is optimistic the online platform will attract youths as they will be able to compare the products' features, policies, as well as pricing via the platform. He said Malaysians below 35 years old currently constituted the largest group in the country who have yet to be covered by any insurance company. According to Bank Negara Malaysia (BNM) Financial Stability and Payments Report 2016, Malaysia's overall insurance penetration remained flat, within the range of 54% to 56% over the last five years. The central bank had earlier set the penetration rate target at 75% by 2020. It specifies that standalone protection products must be available through direct channels from Jan 1, 2017, followed by critical illness and medical and health insurance/takaful products by Jan 1, 2018.

Maybank Islamic launched a new account for its Islamic private wealth clientele. The new feature will provide high net worth (HNW) clients with comprehensive private banking services. The bank explained that the enhanced platform will allow HNW clients to view and monitor their various Islamic investment portfolios holistically, in one single statement. The recent Asia Pacific Wealth Report by Capgemini indicates that the greatest enthusiasm for putting portfolios to work for social gain comes from high net worth individuals in the emerging markets of Indonesia, followed closely by Malaysia. Maybank's Group Head of Community Financial Services, Datuk Lim Hong Tat, said that Maybank Islamic provides an avenue for HNW individuals to earn returns in a more socially-responsible manner.

Turkish treasury mandated the Dubai Islamic Bank, HSBC, and Standard Chartered to explore opportunities for a possible sukuk issue. A series of investor meetings will be organised in the UAE on March 28, 2017. Meanwhile, the country’s monetary authority raised its highest interest rate while leaving all of the other rates unchanged. The lira rallied as the move was seen paving for they way for tighter policy and serving as insurance against bouts of currency weakness.

Two standard-setting bodies are proposing new guidelines for sukuk that would make them more transparent and easier to structure. The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) published draft accounting standards for sukuk. It clarifies how sukuk should be treated on balance sheets and which information issuers should disclose. The AAOIFI said it had also formed a working group to overhaul its sharia standards for sukuk. Last year, the Malaysia-based Islamic Financial Services Board (IFSB) drafted its own guidelines for disclosure related to Islamic capital market products. Aligning the market around common standards and requiring all issuers to disclose the same information could increase investment in sukuk.

Wednsday 5th April 2017: 18:00 – 20:30. Discussion starts promptly at 18.30

PwC, 1 Embankment Place, London WC2N 6RH, United Kingdom.

The Committee of IoD City of London in partnership with The British Malaysian Society invites IoD members
and guests to a discussion on ‘Islamic Finance: what it means & the opportunities for the UK post- Brexit.

The Islamic Finance Industry is predicted to reach $2.7 trillion in 2017. Islamic Banking contributes
80% to a total of $2.3 trillion. Other components of Islamic Finance include Sukuk Bonds (14%), Asset
Management (3%), Insurance (2%) and Micro finance (1%). Source for all figures – Centre of Islamic
Banking and Economics.

Our speakers are:
• Dato’ Faiz Azmi – Chairman, PwC Malaysia and Global lead
• on Islamic Finance for PwC
• Andrew Gosnay, Head of Banking and Finance,
Laytons Solicitors LLP
• Iqbal Asaria CBE , Islamic Finance expert and
Special Advisor to the Muslim Council of Britain
on business and economics affairs

After the panel presentations there will be opportunities for Q & A and discussion, followed by a drinks reception.

The evening is kindly hosted by PwC London. Dress code is business wear.

Please consider participating in the fundraising campaign for the victims of the #londonattack: https://www.launchgood.com/project/muslims_united_for_london#/

And also share and distribute further the letter to baghdadi http://www.lettertobaghdadi.com/ - the fatwa concerning the movement calling itself "ISIS".

"The attack on Westminster

At around 2:40 pm on the 22nd of March, an attacker drove a car into pedestrians on Westminster Bridge and then stabbed a police officer within the grounds of the Houses of Parliament. At least 4 people have been killed, including officer PC Keith Palmer, and about 40 were wounded (BBC News). The alleged attacker, apparently a British citizen, has been shot and killed by police. A full investigation has been launched.

Indonesia's finance minister Sri Mulyani Indrawati announced the government plans to issue a global sukuk this week. Indrawati did not give further details on the planned issuance. An official has previously said the government will issue global sukuk in the first half of 2017. According to Thomson Reuters, Indonesia has given initial yield guidance of 3.75% for a five-year tranche of the U.S.-dollar sukuk and 4.5% for 10-year tranche.

Casablanca Finance City welcomes international businesses that have been flocking to Morocco to take advantage of its cheap labour, skilled work force and proximity to sub-Saharan Africa. Amid the uprisings that characterised the Arab Spring, Morocco remained relatively stable. Political and social stability continued after 2010, while the neighbour countries struggled. Adding to Morocco’s allure is the introduction of formal Islamic financial products, officially labelled participatory finance in the country. In 2017 authorities issued five participatory banking licences to Moroccan banks and three to international banks. As Morocco continues to roll out participatory financial products and services slowly and cautiously, the sector will remain a niche.

Shareholders of Kuwait Finance House (KFH) have approved issue of sukuk and other sharia-compliant financial instruments.

Asian Finance Bank (AFB) has appointed Khalid Mahmood Bhaimia as its new chief executive officer effective from March 21, 2017. Bhaimia has over 20 years of experience in the global Islamic banking industry. He previously served as the CEO of Unicorn International Islamic Bank and RHB Islamic Bank as well as Hong Leong Islamic Bank’s managing director. AFP is a full-fledged Islamic bank and is backed by a consortium of shareholders comprising Middle Eastern financial institutions.

Nigerian CEOs have hinged the achievement of Sustainable Development Goals (SDGs) on partnership by businesses. This was stated by CEO of the Sahara Group, Tonye Cole, who delivered a keynote address at the CEO roundtable organised by First Bank of Nigeria in Lagos. Adesola Adeduntan, managing director of FirstBank, said the bank had put in place an environmental, social and governance management system to drive responsible lending and its commitment to financial inclusion. The bank CEO noted that engagement through programmes included over 16 executive education programmes, organised 16 workshops and three international conferences. The bank also empowered over 3,000 Small and medium Enterprises (SMEs). He called on business leaders to consider such partnership for the enhancement of sustainable development.

The recently established International Islamic Business Association (IAIB) has announced plans to develop halal businesses and open offices throughout the region. However, changes in Russian legislation are needed to attract investment from Muslim countries. The IAIB was launched in the assembly hall of the Golden Ring hotel in Moscow on 16 February. One of the founders of IAIB, Samir Huseynov, said that lobbying to change Russian legislation and to create favorable conditions for Islamic banks is one of the main goals of IAIB. In contrast, former Russian Vice President Alexander Rutskoy, who took part in the launch event, said that he does not believe laws need to be changed to enable the operation of Islamic banks in Russia.

The Central Bank of Jordan (CBJ) the second sukuk issuance on behalf of the National Electric Power Company (NEPCO) at a total value of JD75 million, 4.1% returns and a five-year maturity period. The bank reported that demand on the sukuk was 2.73 times the value of the issue, having received orders for JD205 million-worth bonds. The CBJ said the high turnout underlines the increasing demand on the financing tools compatible with the Islamic Law, which have been lacking in the local market during past decades. The bank said the success of this issuance was a result of the continuous coordination of the Finance Ministry, the CBJ, NEPCO, the Jordan Securities Commission and the Central Sharia Oversight Commission.

The International Monetary Fund (IMF) has been a proactive supporter of Islamic banking and has declared it a priority for its operations in countries with Islamic banking. In a recent report titled "Ensuring Financial Stability in Countries with Islamic Banking", IMF economists have created a plan of action that would have game-changing implications for the industry. The report acknowledges the progress achieved in developing prudential standards, but concludes that the current framework governing the global industry contains many gaps. Particular attention needs to be paid to developing resolution, financial safety nets, such as deposit protection insurance and a lender of last resort, and liquidity management frameworks. According to IMF, the emergence of complex hybrid Islamic financial institutions and products is a regulatory challenge.

Malaysia’s proximity in the ASEAN region and its mix of urban, suburban and rural population makes it a suitable environment for testing and launching FinTech solutions for the global Islamic Finance market. Datuk Yasmin Mohamood, CEO of Malaysia Digital Economy Corp (MDEC), has opened the country’s doors for FinTech startups and companies. Yasmin was speaking at the Finnovasia 2017 Conference in Kuala Lampur and claimed Malaysia as a viable test-bed for FinTech companies. He added that an organized FinTech ecosystem will be developed with the support of Bank Negara Malaysia and the country’s Securities Commission. In August last year, Bitspark partnered Malaysia’s Vitaxel to bring remittance solutions over the bitcoin blockchain. Later in December, Malaysian non-profit Blockchain Embassy Asia established a steering committee toward educating organizations about blockchain technology.

Mahmood Hashim Al Kooheji, the head of Bahrain’s sovereign wealth fund, Mumtalakat, is intent on brokering safe, considered deals that yield long-term growth. The wealth fund is taking an increased interest in the comparatively stable sectors of healthcare, education and industry. As evidence of this strategy, Mumtalakat last year took an undisclosed equity stake in Italian healthcare firm KOS Group. In October 2015, Mumtalakat took a majority stake in UAE-based GEMS Education as part of an investment group that included US private equity firm Blackstone. Al Kooheji expects another deal to be reached next year to launch GEMS schools in Bahrain. He also points out that Mumtalakat announced six new deals in 2016, a significant number for a small fund. According to Al Kooheji, Mumtalakat is now truly diversifed in the GCC, US, UK and Europe and this will continue in the future.