IslamicFinance.de

Tajikistan is keen to benefit from Islamic banking and utilise the experiences of Islamic banks in his country, Minister of Economic Development and Trade Nematullo Hikmatullozoda has said. Hikmatullozoda, who visited QIIB headquarters yesterday expressed the hope that Tajikistan would be able to attract Islamic banks to his country, where his ministry is making efforts to convince investors about the attractive investment opportunities available. In particular, Tajikistan is keen on expanding and further cementing the relationship with Qatar’s financial and business sectors.

The State Bank of Pakistan (SBP) has introduced three-year Fixed Rental Rate Government of Pakistan (GOP) Ijara Sukuk (FRR-GIS). Presently, Variable Rental Rate GOP Ijara Sukuk (VRR-GIS) is being auctioned and its rental rate is being fixed every three months on the basis of Market Treasury Bills' cut-off yield. However, on the request of Islamic Banking Industry, SBP has decided to launch Fixed Rental Rate GOP Ijara Sukuk for market development. The rental rate decided in the auction will be applicable to the entire tenor of FRR-GIS and will be paid to FRR-GIS holders on semi-annual basis. Minimum bid size will be Rs 100,000 and in multiples thereof. Rental rate (% p.a.) has to be specified up to a maximum of two decimals points.

Western companies have been rushing into Iran for a part of post-sanctions business action but European banks, still reeling from punitive US fines over links to the country, are waiting on the sidelines until they feel it is safe to do business with Tehran. France has already hailed a new era after welcoming Iranian President Hassan Rouhani, who sealed a host of post-sanctions deals last week. But when it comes to high finance, there is hesitation, at least on the part of European banks. The hefty fines levied on these financial institutions during the sanctions has made them particularly wary. European banks are not only confronted with potential sanctions risks, but also other exposure points under international banking regulations and practices.

Silkbank introduced Emaan Islamic Banking through conversion of its seven conventional banking branches into dedicated Islamic Banking branches. In early 2013, three new branches were added to the Islamic Banking network. Emaan Islamic Banking offers a suite of deposit products as well as a range of asset products. The Islamic Banking Division has an alliance with Pak Qatar Family Takaful to provide Takaful & Saving Plans. With the implementation of the SBP Shari’ah Governance Framework and induction of a renowned Shariah scholar, the Islamic Banking Division endeavours to develop Islamic Banking products in Pakistan and serve as a catalyst in Islamic Banking growth in the region. The Bank plans to add 60 new branches in 2016 to the existing network and another 102 branches in the next two years.

The State Bank of Pakistan (SBP) rejected request of Jehangir Siddiqui and Company Limited (JSCL) to review its decision to disallow Dubai Bank to sell out its shares to its sponsor shareholders of BankIslami. JSCL approached the central bank in September 2015 to submit an application to the central bank with suggestions in order to getting additional shares in BankIslami. However, the central bank retained its decision and disallowed the management of BankIslami to sell its stakes of Dubai Bank to JSCL in pursuant to Founding Shareholding Agreement under which sponsor shareholders are not allowed to increase its shareholding. Earlier in August 2015, a consortium led by Ali Hussain of JSCL and Alkaram Group offered Dubai Bank to purchase its 144.200 million in the BankIslami.

Many Iranian banks have created a roadmap to open up to the world. Bank Pasargad, the second-largest finance company of Iran with billions of dollars of blocked assets in many countries worldwide, is one of them. According to Mostafa Beheshtirooy, a member of the executive board at Bank Pasargad, the bank has started conducting research into Turkey, Germany, Spain and China, adding that business could be done via a local partner or a take-over of a bank. Beheshtirooy said that, despite the negative impacts of the rising dollar and falling oil prices, the bank's total assets will reach $70 billion; in stark contrast to the current $19 billion it holds.

Bahrain's central bank said on Tuesday it is taking steps to close down Iranian-owned Future Bank, which is based in the Gulf state. Bahrain's central bank has not elaborated on its reasons for the action. Future Bank, based in Manama, is a commercial bank which was founded as a joint venture between two Iranian banks - Bank Saderat and Bank Melli - and Bahrain's Ahli United Bank. The bank's assets stood at 569.4 million dinars ($1.51 billion) at the end of September 2015. On Monday, Ebtisam al-Arrayed, head of regulatory policy at the central bank, said that the regulator had yet to make a decision about Future Bank after placing it under its administration last year, along with Iran Insurance Co - the Bahrain branch of an Iranian insurer.

For over 6 million Pakistani smallholders with 10 acres of land or less, financing options are very limited and prevent them from building assets over time. Thus, farmers tend to do what has been done for centuries: use Artees, middlemen who have long responded to their agricultural and personal financial needs. Artees directly provide farmers with seeds and fertilizers, and collect the equivalent amount in crops at harvest time. According to some estimats, Artees finance at least 50% of smallholders in Pakistan. Since 2009, farmers in Punjab have had another financing option called Salam, which seeks to give them a bigger role in the decision-making. It is offered by Wasil Foundation.

Griffon Capital, a Tehran-based firm set up by a group of international and Iranian investors in anticipation of Iran’s nuclear deal, is seeking to raise 100 million euros ($108.2 million) by the end of the year for a new offshore fund specializing in the country’s stocks. Griffon’s Iran Flagship Fund, domiciled in the Cayman Islands, is an open-ended vehicle investing mainly in the Tehran Stock Exchange and Iran Fara Bourse, the company said. Griffon will start pitching the fund in the U.K. next month. Iran is opening up to foreign investors after the lifting of international sanctions earlier this month ended a decade of isolation. Last week Charlemagne Capital Ltd. and Turquoise Partners started an institutional fund to buy Iranian securities.

Mina Mehrnoush, the head of planning at Iran’s Organization for Trade Development, said three Russian banks have voiced their readiness to promote banking relations with the Islamic Republic in the near future in a bid to boost commercial cooperation between Tehran and Moscow. Mehrnoush also said that during a recent visit to Russia by an Iranian trade delegation, “good meetings” were held with three Russian banks, namely Mir Business Bank, Tempbank and RFC Bank. Mir Business Bank, which is the agent bank of Bank Melli Iran, agreed to provide good facilities and open proper credit lines for Iran, she said. The Iranian trade official went on to say that other issues were also discussed in her meetings with Russian banking officials, including opening accounts for Iranian companies without having to make a trip to Russia.

For Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system, the Society for the Worldwide Interbank Financial Telecommunications, is used to transmit payments and letters of credit. A senior official with Iran's central bank said that all the private and state-owned banks have taken the necessary bureaucratic steps, regarding rejoining the SWIFT system. While international banks are expected to link up with their Iranian counterparts via SWIFT, Iran will also be looking to encourage foreign institutions to expand involvement in the country’s financial system. But for many foreign banks, there are concerns about being caught up in ongoing U.S. sanctions.

Iran's capital market regulator wants to develop a market for mortgage-backed securities (MBS) and has published rules covering them, the latest move by authorities to revamp the financial sector. MBS could help to stimulate the debt market and spur housing construction in the country of about 80 million people. Iran has seen some issues of MBS but on a small scale, and active trade in them has not developed. The new MBS rules, released by the SEO last week, include strong consumer protection features. They also feature some particularly Iranian aspects that make them different from similar securities elsewhere. The central bank uses tools such as reserve requirement ratios and open market operations to conduct monetary policy.

Banks from the UAE, Oman, Qatar and Kuwait have reportedly spent months drawing up plans for entering the Iranian market. There are certain regional institutions taking legal advice to manage very real risks associated with doing business with Iran, according to Stuart Jones Jr., an executive director at EY. Any re-engagement with Iran will take place in several stages and will require updates to policies, procedures, systems and controls as well as ongoing communication with regulators and correspondent banks, Emirates NBD said, adding it did not currently have any material assets or liabilities in Iran. The Persian Gulf banks are weighing re-entry into the Iranian financial system after it was announced that the implementation of a nuclear deal finalized by Tehran and world powers back in July 2015 has officially been started.

The deputy governor of the State Bank of Pakistan has announced that the bank is setting up a Shariah-compliant open market to manage liquidity of the Islamic banking sector. Deputy Governor, Saeed Ahmed's announcement came on Wednesday as he addressed the global forum on Islamic economics, banking and finance arranged by the University of Management and Technology's Institute of Islamic Banking and Finance. In his speech, he reiterated his bank's commitment to promoting and developing the Islamic banking in Pakistan. The existing banking laws are being amended and soon this process will be finalised, he said. Those who too addressed the forum were Islamic finance scholars Mufti Muhammad Taqi Usmani, Justice Khalil-ur-Rehma, among others.

Abdolnaser Hemmati, the CEO of the National Bank of Iran (known as Bank Melli Iran or BMI), said that frozen assets of the bank at the Deutsche Bundesbank were freed. Following the move, 17 BMI subsidiaries will be able to work abroad. Deutsche Bundesbank authorized BMI’s branch in Hamburg, and the BMI’s Dubai branch has also been freed of transaction barriers previously in place under sanctions. Measures have been taken to launch the London branch of the BMI. Only a UK permit is left to be issued, he added. Mir Business Bank CJSC, a BMI branch in Moscow, can also resume its full operations, according to Hemmati. In one week, all BMI branches abroad will be operational, he stated.

Premier Insurance appointed Imran Taqi Usmani as Shari’ah Adviser and Ernst and Young Ford Rhodes Sidat Hyder as Shari’ah Auditor. Premier Insurance, which deals in various conventional insurance products, is offering Shariah compliant products, Takaful. The Securities and Exchange Commission of Pakistan (SECP) enable Takaful business in the country and Premier Insurance offers the various services to clients across all economic sectors and products in all classes of general insurance. Imran Taqi Usmani, son of Justice (r) Taqi Usmani, renowned Islamic scholar holds LLB, MPhil and PhD degrees in Islamic Finance. He also holds an Alamiyya and a Takhassus (Specialisation in Islamic Jurisprudence) from Jamia Darul-Uloom, Karachi.

Iran will receive $32 billion of unfrozen assets after sanctions were lifted in a deal with world powers over its nuclear programme, Iranian central bank chief Valiollah Seif said Tuesday. Seif was quoted as saying that $28 billion (25.8 billion euros) would go to the central bank and $4 billion will be transferred to the state treasury as the share of the government. The unfreezing of assets comes after the U.N. atomic watchdog confirmed at the weekend that Iran had complied with measures imposed by the deal with global powers reached in Vienna in July. The central bank plans to keep the funds in centralized and safe accounts abroad, he added.

The United Nations Security Council announced on Sunday that it has removed Iranian Bank Sepah and its international subsidiary from a sanctions list. This move came after Saturday's announcement of a UN report confirming that Iran has completed necessary preparatory steps to start the implementation of a plan of action aiming to resolve the nuclear issue. Bank Sepah had been under a Council-mandated asset freeze since 2007. It provides support for the Aerospace Industries Organisation (AIO) and subordinates, including Shahid Hemmat Industrial Group (SHIG) and Shahid Bagheri Industrial Group (SBIG), according to the UN website.

Jura Energy Corporation has announced that its wholly-owned subsidiary, Spud Energy Pty Limited ("SEPL"), has entered into a secured long term syndicated financing arrangement totalling Pakistan Rupees ("PKR") 750 million (US$7,153,500) effective December 18, 2015. The syndicate is comprised of Al Baraka Bank (Pakistan) Limited ("ABPL"), the lead arranger and JS Bank Limited ("JSBL"), a related party of Jura, with participation of PKR 500 million and PKR 250 million respectively. The Facility will carry a mark-up at the rate of 3-month Karachi Inter Bank Offered Rate ("KIBOR") (6.48% using the State Bank of Pakistan posted rate on December 29, 2015) plus 2.75%, maturing five years from the date of disbursement.

The Islamic Corporation for the Development of the Private sector (ICD) and OJSC Agroinvestbank of the Republic of Tajikistan signed a Memorandum of Understanding for cooperation to consider extension of a Line of Financing facility to OJSC Agroinvestbank as part of the country programme allocation of USD 25 million for the Republic of Tajikistan. The Line of Financing facility will be extended by OJSC Agroinvestbank to the SMEs sector to project's in industrial, communication, technology, health, construction and agricultural sectors. Previously ICD extended a total of USD 11.5 million Line of Financing facility for the development of Small and Medium Enterprises in Tajikistan which demonstrates ICD’s firm commitment to develop the private sector in its member countries.