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#Pakistan's National Savings is expected to launch its first Islamic savings product by the start of 2018. According to Zafar Masud, director general of National Savings, the proposed product would begin with one year maturity and allow investors to earn monthly profit. The plan is to issue this product from the National Savings centres. Investors can invest a minimum of Rs10,000 with no maximum investment limit. National Savings manages a portfolio which is around 30% of Pakistan’s total banking deposits and serves more than seven million accounts. Experts see prospects of higher demand for Islamic finance to tap domestic savings. It is expected to increase competition among conventional and Islamic lenders to offer best returns to the savers.

Pakistan has allowed immediate borrowing of up to $3bn from international debt markets by floating three sovereign bonds. The country is going to float the bonds in the largest transaction to take pressure off the central bank’s foreign exchange reserves that are depleting at a rapid pace. Earlier, the government borrowed $2bn in 2014 through similar capital market transactions. A consortium of banks have initially indicated that five-year sukuk, ten-year Eurobond and another 30-year Eurobond with combined proceeds of around $2bn to $3bn can be floated. The cabinet waived a dozen income taxes to make the float attractive for foreign investors. Road shows are expected to be held in the UK, US, Dubai, Singapore and Hong Kong. Standard Chartered Bank, Industrial and Commercial Bank of China, Citibank and Deutsche Bank were appointed for the Eurobond issue. For the proposed Sukuk, the Fourth Pakistan International Sukuk Company is being incorporated by the Finance Division.

In #Bangladesh seven members of Social Islami Bank’s board of directors have resigned from their posts. At the same board meeting nine new directors were appointed. Among the seven that have resigned, four were independent directors: Abdur Rahman, Abdul Muhith, Asaduzzaman and Moinul Hasan. The remaining three were shareholders of the bank. The names of the nine new directors are yet to be known. Earlier Social Islami Bank Limited (SIBL) faced what insiders claimed was a hostile takeover, when chairman and comittee chairman were replaced by Anwarul Azim Arif and Belal Ahmed. Former managing director of SIBL Shahid Hossain also stepped down and was replaced by Quazi Osman Ali. All new directors are connnected to the S Alam group, Belal is the son-in-law of S Alam Group Chairman and Managing Director Mohammed Saiful Alam.

Bank Islam Malaysia Bhd (BIMB) had obtained approvals from Bank Negara Malaysia and the Securities Commission Malaysia to establish the third subordinated Sukuk Murabahah programme with the issuance of RM300 million. BIMB said the sukuk has tenure of a 10-year non-callable five years with maturity date on November 12, 2027. BIMB noted the proceeds shall be utilised to finance Bank Islam’s Islamic banking activities, working capital requirements and other corporate purposes.

After examining the details of Islamic banking, Reserve Bank of India (RBI) has decided not to pursue the matter any further. It all started in late 2008 when former RBI governor Raghuram Rajan had stressed on the need for a closer look at the issue of interest-free banking in the country. Later, an inter-departmental group (IDG) set up in the RBI examined the legal, technical and regulatory issues for introducing Islamic banking in India. It recommended an "Islamic window" in conventional banks for gradual introduction of Sharia-compliant banking. However, no deadline was given for the proposal. This Sunday the central bank has refused to go on with the idea saying the decision was taken after considering the opportunities available to all citizens to access banking and financial services.

#Malaysia Building Society Bhd (MBSB) is buying Asian Finance Bank (AFB) for RM644.95 million in cash. MBSB stated that the proposed merger would result in it becoming a full-fledged Islamic bank. MBSB entered into a conditional share purchase agreement with the shareholders of AFB. MBSB will pay RM396.89 million in cash and RM255.51 million via the issuance of 225.51 million new MBSB shares at RM1.10 each. The cash option was based on a valuation of 1.2 times AFB net assets valued at RM496.12 million as at December 2016, while the shares option was based on a valuation of 1.5 times the accepted net asset. MBSB said the proposed merger was expected to be completed by the first quarter of 2018. The subsequent tranches of the proposed transfer of assets and liabilities and disposal of the residual should complete in three years from the first tranche transfer.

Pakistan has picked arrangers for a potential $2bn debt sale planned for later this year. The sale would come as Pakistan’s finances are starting to show strain. The nation’s foreign-exchange reserves have fallen 15% to $19.8b this year as its traditional exports dwindle and imports rise. The World Bank estimates that $17b of external financing is needed in the next financial year for Pakistan to bridge its rising debt payments and current account deficit. The deficit is expected to widen to 5.7% of gross domestic product, from a deficit of 4.4% in 2016. The country is planning to raise $1b from a Sukuk offering, and has mandated Citigroup, Standard Chartered, Deutsche Bank, Dubai Islamic Bank and Noor Bank to manage the sale. Citigroup, Standard Chartered, Deutsche Bank and Industrial & Commercial Bank of China were chosen for a potential conventional bond offering of an equal amount.

Malaysia Building Society (MBSB) is a step closer to becoming a full-fledged Islamic bank after the proposed acquisition of Asian Finance Bank (AFB). If the merger takes place, the tie-up between non-bank MBSB and AFB would create the country's second largest Islamic bank.

HSBC Bank #Malaysia hopes to see a lot more Islamic financing instruments used in the development of the Southeast Asia railway network which connects China to the region. CEO Mukhtar Hussain said HSBC had a unique value proposition in this matter, being the first bank to issue sukuk in Malaysia. The railway network involves building more than 3,000 km of rail lines from China’s Yunnan province through Laos, Cambodia, Thailand, Malaysia, Singapore and Indonesia. It is one of China’s seven main transport routes under the Belt and Road Initiative (BRI). The project adopts a public-private partnership financing approach, one that puts the financing requirements efficiently to the private sector and therefore can relieve the pressure from the nations’ budget.

Malaysia Building Society Bhd (MBSB) plans to acquire Asian Finance Bank (AFB) from its foreign shareholders for 645 million ringgit ($152.5 million). Malaysia Building Society agreed with AFB's shareholders to pay 396.9 million ringgit in cash and the issuance of 225.5 million new shares at 1.10 ringgit per share. The deal values AFB at 1.3 times book value, MBSB said. MBSB has sought to become a full-fledged bank in the last few years. In 2014 a three-way merger deal with CIMB Group Holdings and RHB Bank was planned, but the plan fell through in early 2015. Talks with Bank Muamalat Malaysia Bhd in the last quarter of 2015 also collapsed.

Dubai Islamic Bank (DIB) and Shahnawaz have entered into a strategic alliance agreement. Shahnawaz is the authorized general distributor of Mercedes-Benz in Pakistan. This initiative will help in establishing Dubai Islamic Bank Pakistan as the preferred financial services partner for Mercedes-Benz in the country. The signing ceremony was held in Karachi in the presence of M Naeem, CEO of Shahnawaz, Naseem Shaikh, General Manager of Shahnawaz and Junaid Ahmed, CEO of Dubai Islamic Bank Pakistan. Junaid Ahmed said this alliance enables the bank's high net worth clientele to achieve their dream of driving their own state-of-the-art Mercedes.

An international workshop on waqf management begins in Dhaka tomorrow. The event is jointly organized by the Islamic Research and Training Institute, Islami Bank Bangladesh and the Centre for Zakat Management. The workshop on the revival of waqf for socio-economic development will review the rules and regulations of waqf management in different countries. President Abdul Hamid is scheduled to inaugurate the event. Islami Bank Chairman Arastoo Khan stated that waqf could play a vital role in developing the country and there were many rich people in the country who want to donate for waqf. A total of 29,341 accountholders of Islami Bank has so far deposited Tk 104 crore under its waqf product called Cash Waqf.

The world's growing Muslim population opens up near limitless potential for Islamic finance. However, the pool of talent is very limited at the moment. The International Center for Education in Islamic Finance (INCEIF) welcomes students from all over the world. Since its opening in 2006, half of the 1,300-plus graduates have been Malaysians, but the other half have been from over 70 countries. The list includes predominantly Muslim nations, like Indonesia, Pakistan and Somalia, but one does not have to be Muslim to enroll. Malaysian authorities are encouraging other educational endeavors, too. The Islamic Banking and Finance Institute Malaysia will launch two new programs offering professional certifications in Islamic finance. The two certifications, chartered Islamic banker and chartered takaful practitioner, are the equivalent of conventional financial qualifications.

Islamic fintech finance in Asia is anticipated to be bigger than originally thought. According to the secretary-general of the Islamic Financial Services Board (IFSB), Zahid ur Rehman Khokher, Islamic finance has the potential to expand further into the Asian market. He noted that the IFSB has been closely monitoring global developments in fintech. Yet, he feels there is a shortage of staff with the appropriate skills. Earlier this month, it was reported that Malaysia was the idea test bed for developing fintech solutions. According to Marzunisham Omar, assistant governor at the Bank Negara Malaysia, even though Islamic finance is still growing within the country, now is the time for the sector to embrace the fintech wave.

While still quite new in Pakistan, Islamic banking is moving ahead in all segments of their operations. The network of Islamic banking institutions (IBIs) has expanded. Now it consists of 21 IBIs, five full-fledged Islamic banks and 16 conventional banks having stand-alone Islamic banking branches. IBIs have expanded their branch network to 2,320 branches. The number of Islamic banking windows, operated by conventional banks, is now at 1,255. Islamic banks' assets in overall banking assets were 11.6% at the end of June. Their asset base increased by Rs150 billion, or 8%, during the quarter to stand at Rs2,035 billion. The market share of IBIs in the overall banking industry was recorded at 11.6% and deposits 13.7% at end-June 2017.

According to Zahid ur Rehman Khokher, secretary-general of the Islamic Financial Services Board (IFSB), the growth potential of Islamic finance in the Asian market is much bigger than might be expected. He emphasized the developing role of fintech within the sector and the IFSB's role in setting standards. He noted the importance of Islamic microfinance in addressing issues of financial inclusion and improving participation in the financial sector. With the range of new services that are emerging, Zahid feels that capacity building is the biggest challenge at the moment. He feels there is a need for developing human resources and appropriate expertise within central banks, Shariah boards, as well as in commercial financial institutions.

The scope of waqf funds need to be expanded in Malaysia beyond the traditional norms of building mosques and Muslim cemeteries. Bank Rakyat chairman Tan Sri Shukry Mohd Salleh said the waqf funds can be fully utilised in other programmes. Cash waqf, he added, had been identified as one of the major tools that could resolve poverty issues in Malaysia. In order to eradicate poverty, Shukry said waqf funds should be distributed within four key sectors, namely health, education, economic development and financial assistance for small enterprises. He also said that even though a lot of waqf efforts have been made, the waqf collection system needs to be streamlined and improved professionally.

After the top level management of Islami Bank Bangladesh Ltd (IBBL) was removed in January, a similar series of drastic changes takes place in Social Islami Bank Ltd (SIBL). SIBL Chairman Rezaul Haque and Executive Committee Chairman Md Anisul Hoque were replaced by Prof Anwarul Azim Arif and Belal Ahmed. The Managing Director of SIBL, Shahid Hossain, has also stepped down and been replaced by Quazi Osman Ali. The decision to remove the top three of the senior management and the announcement on their replacements was made at a closed door meeting of the bank’s board of directors. The changes are allegedly being backed by Chittagong-based S Alam Group that bought up shares of both banks prior to the takeover.

Islamic banking in Bangladesh is taking shape rapidly with partial practice of Shariah. Islamic banking was first introduced in Bangladesh in 1983 by foreign investors from Saudi Arabia and Kuwait. Currently, eight full-fledged Islamic banks are operating with 1,068 branches in the country. Moreover, 19 Islamic banking branches of nine commercial banks and 25 Islamic banking windows of eight commercial banks are also providing Islamic financial services. According to Md Yasin Ali, professor of Bangladesh Institute of Bank Management (BIBM), most of the Islamic Banks in Bangladesh are not Shariah compliant. Currently, there is no proper regulatory framework for strict monitoring of Islamic banking. The Islamic banks in Bangladesh have been facing excess liquidity problem, which is depriving them of being financiers in public projects.

The #Philippines House of Representatives has approved the government’s plan of tapping the bond market to finance the reconstruction of Marawi City. Ben P. Evardone said the Bureau of Treasury should pursue the issuance of a P50-billion 'Marawi Bond' considering the low interest rates prevailing in the market. By tapping the bond market to finance Marawi’s reconstruction, the lawmaker said this will free up a huge part of the regular budget for government’s other programs. According to Budget Secretary Benjamin E. Diokno, the government would allocate P15 billion to Marawi City in the next two years. He also added the tax settlement paid by Mighty Corp. and Philippine Airlines would be used to finance the rehabilitation of the war-torn city.