IslamicFinance.de

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.

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

Dear User,

as salamu alaikum,

In these days I am testing the new function of IslamicFinance.de: 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 IslamicFinance.de each month pretty realistic, dont you think?

So, please visit:

http://wiki.islamicfinance.de

and share some comments.

Editing rights for the time (till I have got a team of volunteers) on manual request to avoid spamming (yes, IslamicFinance.de 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.

India is planning to overhaul regulation of its financial system to attract investments from the Gulf and to encourage its largely unbanked Muslim population to save money in a way compliant with their religion, a senior government adviser has said. K Rahman Khan, deputy chairman of India's upper house of parliament, told the Financial Times that the ruling Congress Party is proposing reforms to the finance ministry, the Reserve Bank of India and Securities and Exchange Board of India to allow for the introduction of Islamic financial services.

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IDB), said it was committed to ensure that its plan to set up an Islamic bank in the Maldives in partnership with the government of the island would materialize soon.

Fitch Ratings says that 2009 proved to be, as anticipated by Fitch, a challenging year for banks in Saudi Arabia as the full impact of the global economic crisis caught up with the region, reflected in rising loan impairments and a rapid slowdown in lending. The preliminary 2009 results released by the 10 main Saudi commercial banks rated by Fitch showed different trends in net income in 2009, with Q409 being the worst quarter of the year.

Fitch notes that five of the 10 largest commercial banks operating in Saudi Arabia showed improvements in their net income y-o-y, but overall growth in total net income for all 10 banks stagnated in 2009 y-o-y (2008: -14.2%). Areas of concern included lower domestic economic growth, mainly reflecting lower oil revenues and exports, and the negative impact on asset quality of recent rapid credit growth as well as problematic exposures to some large Saudi trading groups (primarily Algosaibi and Saad). The agency has yet to see the full audited financial statements of the Saudi banks but will review them fully in the near future. At this stage, Fitch does not expect to see further downgrades of Individual Ratings in 2010.

The London School of Economics and Harvard Law School invite you to attend a public lecture in London:

Title: Global Perspective on Islamic Finance
Date: February 24, 2010
Time: 6:30-8pm
Venue: Hong Kong Theatre, Clement House, London School of Economics

http://www.lse.ac.uk/resources/mapsAndDirections/findingYourWayAroundLSE...

Speakers:
Stephen Green, Group Chairman, HSBC Holdings &
Dr M. Umer Chapra, Adviser, Islamic Development Bank, IRTI

Chair: Professor Sarah Worthington, LSE Pro-Director,

Please spread the word around among your colleagues and friends in London who can benefit from this public lecture.

This event is free and open to all with no ticket required. Entry is on a first come, first served basis.

For questions, contact:

IFP at 617-496-2296 or 2297 or ifp@law.harvard.edu

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 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.

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.

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

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: http://www.reliefweb.int/rw/rwb.nsf/retrieveattachments?openagent&shorti...)

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.

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.

http://www.collectionscreditrisk.com/news/brunei-battles-credit-card-deb...

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:

http://www.brudirect.com/index.php/Columnist-Column/bruneians-better-off...

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: http://www.islamicfinance.de/?q=node/582 and the entry in the Islamic Finance WIKI: http://wiki.islamicfinance.de/index.php/Credit_Card

Best regards,

Michael Saleh Gassner

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.

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.

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

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.