IslamicFinance.de

In #India Jammu and Kashmir Bank is willing to offer Islamic banking to its customers. Chairman Parvez Ahmad said there was great demand for Islamic Banking in the state, so the bank would examine the proposal after taking the Reserve Bank on board. As far as the JK Bank positioning is concerned, it has 63% share on the asset side, 62% share on the deposit side, out of 862 branches, 745 are in the state, out of 1030 ATMs, 950 in JK state, 90% of the population is dealing with JK Bank. Ahmad added that other banks were only offering products and services, JK Bank was more concerned about the development of JK state as a whole.

According to the findings of Emirates Islamic’s second Islamic Banking Index, there has been an increasing public acceptance and demand for Islamic banking in the UAE. Chief executive of Emirates Islamic, Jamal Bin Ghalaita, said 51% of banking consumers had at least one Islamic product, demonstrating that the efforts by Islamic banks to improve their customer outreach were paying off. As far as perception is concerned, Islamic banks’ trustworthiness rose 42% among Muslim consumers compared to 37% in 2015. Among the non-Muslim population, there was a sizable increase in the number of non-Muslim consumers willing to consider subscribing to an Islamic banking product. The survey also highlights the key challenges for Islamic banks. For a second consecutive year, Islamic banks lag behind conventional banks in technology, innovation and customer service.

#Bahrain's Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa has met with the new President of the Islamic Development Bank (IDB) Group, Dr. Bandar Hajjar. The meeting was held on the sidelines of the minister's participation in the annual meetings of the Boards of Governors of the IMF and the World Bank Group held in Washington. Ways to broaden the close cooperation between the two sides were discussed. The minister praised the IDB's distinguished standing, which plays a vital role in promoting the development movements in Arab and Islamic countries.

Sarajevo's stock exchange launched an Islamic index, a first for the Balkans region. Director of the Sarajevo stock exchange, Tarik Kurbegovic, said the SASX-BBI Index includes 25 Bosnian firms which respect Islamic teaching and was set up in cooperation with Bosnia Bank International (BBI), founded by Gulf countries. BBI director Amer Bukvic said that with this index investment in Bosnia by Gulf countries would grow in a significant way during the next three to five years. In the last few years, Gulf businessmen have invested significantly in tourist and residential real estate in Sarajevo and the surrounding region. The goal of the Islamic index is to direct new investment towards the sectors of agriculture, tourism, metallurgic industry and energy.

A recent UNICEF survey indicates that Somalia is off-track in achieving Millenium Development Goals for Water, Hygiene and Sanitation, a challenge facing Somaliland as well. To off-set the developmental challenges, Somaliland ought to implement sound financial systems. International Development Agencies note that if Somaliland is to have full confidence in Islamic Banking, then it needs to standardise, deregulate and diversify the economy. That would attract more investment from multi-lateral agencies, such as the World Bank, Islamic and African Development Banks (AfDB) and the United Nations. New technologies, such as mobile banking, can enhance the hard to reach areas and further attract potential customers. DBI and Dara Salaam banks are both investing in the latest technology for improving the economy.

According to Moody’s Investor Services, there is stable flow of sovereign sukuk issuance this year, which is set to touch US$28 billion (US$1 = RM4.15) in Southeast Asia. Among the Southeast Asia countries, Malaysia and Indonesia continue to regularly issue long-term sovereign sukuk while Gulf countries favour conventional debt structure to finance their deficit. Moody’s Vice President Gabriel Torres said the governments of Cote d’Ivoire, Senegal and Sharjah returned to the sovereign sukuk market in 2016, but issuance volumes are primarily supported by more regular issuers, such as Indonesia, Malaysia and Turkey. Sub-Saharan African sovereign sukuk issuance is likely to remain active as governments set up regulatory frameworks for a retail Islamic banking sector and test market appetite.

In #Indonesia the Financial Service Authority (OJK) is seeking to boost Islamic financial products growth through better access to the financial service industry. According to OJK Commissioner Council member Firdaus Djaelani, better access to financial products will ease service delivery, lead to the affordable price, as well as to other benefits. The market share of Islamic finance in Indonesia is still low at 5.3%. However, Firdaus is optimistic that Islamic finance industry has a huge potential. He believes that people need to participate in enhancing market share of Islamic finance industry, including through engagement in the Islamic Economic Society (MES). The better understanding of Islamic financial products will open up access to financial institutions. Better access for the people and SMEs will also provide a sense of security in financial investment.

In #Malaysia APM Automotive Holdings has proposed to establish an Islamic commercial papers (ICP) programme and Islamic medium term notes (IMTN), with a combined nominal value of up to RM1.5 billion. In a bourse filing APM said the ICP and IMTN programmes will have a tenure of seven years and 20 years respectively, from the date of first issue. The proceeds from the issuance of the sukuk murabahah shall be utilised by the company for general corporate purposes and to refinance future financing of APM and its subsidiaries. APM assured that the utilisation of the proceeds of the sukuk murabahah programmes would be at all times for syariah-compliant purposes.

NB: Figure was amended from RM 3 bn to RM 1.5 bn following correction in original source.

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) plans to finalize several new standards by the end of the year. Bahrain-based AAOIFI has published a draft sharia standard for gold-based products with a one month consultation period ending on Nov. 9. AAOIFI's sharia board also discussed work on a new sharia standard covering credit cards, while a final draft of a sharia standard covering liability of investment managers would be issued during its next meeting. Standards for murabaha, sukuk and ijara are also underway with a working group expected to finalize them by the end of the year. A revision of the existing standard on sukuk will cover issues including the asset-backed and asset-based nature of sukuk, capital boosting instruments, beneficial ownership and non-viability clauses.

Vice President and Prime Minister of the #UAE, Sheikh Mohammed bin Rashid Al Maktoum said that the Islamic Economic system offers a real opportunity for economic, commercial and financial growth. He added that the Islamic Economic system has been tested by various international financial institutions and the UAE has started reaping the benefits of this system. Crown Prince of Dubai Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum said Dubai is set to launch ambitious projects as part of a plan to transform the city into the capital of the Islamic Economy by 2021. Sheikh Hamdan made these remarks ahead of the start of the third Global Islamic Economy Summit in Dubai. He expressed his hope that the Summit would also discuss how Islamic Economy instruments can stimulate the development of the private and public sectors.

The Affin Bank Group hopes that its new new strategic alliance with the Islamic Corporation for the Development of the Private Sector (ICD) will catapult both institutions to a new level. Affin Bank and ICD have signed a memorandum of understanding (MoU) where they agreed on strategic collaboration especially within the Asian region. The cooperation reflects ICD’s ambition to expand its geographic footprint and exert its influence within the Asian region. In the process, both parties will offer technical and advisory support particularly on product development and Shariah concepts. Mohammed Alammari, acting CEO of ICD, and Kamarul Ariffin Mohd Jamil, CEO of Affin Bank, signed the MoU. Mohammed Alammari expressed his strong support for the partnership.

In #Pakistan Chair­man of the Senate Standing Committee on Finance Senator Saleem Mandvi­walla has strongly criticized the issuance of $1 billion sukuk. He said that the hurried decision was an act of im­­maturity by the government and it was expected that the rates would be high. Senator Mandviwalla is surprised that Eurobonds which carry sovereign guarantees were sold at 8.25pc interest rate and sukuk, which are guaranteed by assets, are sold at 5.5pc. He said that the federal government also blamed the higher rate on Pak-India border tensions. He added that it would have been better to wait with the issuance for a more suitable time.

A recent study on Islamic microfinance by the Consultative Group to Assist the Poor (CGAP), Yale University and Tameweelcom found less price sensitivity by some consumers and a lot of focus on simplicity in product offerings and Shariah compliance. Consumers of financial products are in general price sensitive and as costs increase, demand goes down. It turned out that about 30% of Muslims always prefer a Shariah-compliant product with little price sensitivity. When given the option to choose between Islamic and conventional banking products, consumers are less likely to make a choice than if presented with only one of the products. The authors attribute this finding to the 'paradox of choice'. If a conventional bank thinks they can maintain market share by starting an Islamic window to offer Islamic products alongside conventional products, they may end up turning off consumers.

In the #Philippines Golden Haven Memorial Park and Cemex Philippines are now among the Shariah-compliant securities listed locally. Golden Haven and Cemex were among the 56 listed securities that made it to the Shariah list. Chief Operating Officer of the Philippine Stock Exchange (PSE), Roel A. Refran, said the PSE continues to provide a list of Shariah-compliant securities to cater to the needs of Islamic investors. He noted that by highlighting listed firms that adhere to the standards of Shariah law, PSE hopes to open investment opportunities in the country to Islamic funds.

The third quarter of 2016 saw Bank Negara Malaysia publish policy documents on ijarah, hibah, qard and wadi'ah. The Central Bank of Bahrain launched a consultation on a proposed sharia governance module and the Indonesian government launched a 10-year Islamic finance master plan. The Islamic Financial Services Board (IFSB) and the Arab Monetary Fund signed a memorandum of understanding (MoU) to establish a framework to promote initiatives that foster the development of the Islamic finance sector in the Arab region. The MoU is for an initial period of three years.

Nigeria's central bank has set commercial banks' investment in Islamic bonds issued by state governments to 10% of the total amount on offer and fixed a maximum tenor of 10 years for the bonds. The central bank said it considered the need to issue the guidelines to enhance the quality of sukuk instruments and to grant liquidity status at its discount window as well as for banks' liquidity ratio. Nigeria is working out details for issuing a debut sovereign sukuk and also planning to sell Eurobond to raise $1 billion this year. The regulator assigned a weight of 20% for capital adequacy for banks' investment in sukuk and a weight of 50% for Islamic bonds that do not qualify as liquid assets.

EthisCrowd has been recognized as the Best Islamic Crowdfunding Platform for its social impact real estate campaigns in Indonesia. The Singapore-based platform received the award at the 6th Global Islamic Finance Awards (GIFA) 2016 in Jakarta. EthisCrowd said the inclusion of the crowdfunding category symbolized the growth and adoption of Islamic Crowdfunding. The platform’s community now claims 17,000 registered members who have invested in projects to build 5,000 houses for the needy in Indonesia. Ronald Yusuf Wijaya, EthisCrowd’s head of Indonesian operations, stated that affordable housing projects are commercially viable and can provide excellent returns for the crowd. EthisCrowd uses Mudarabah contracts to formalize rights to profit or revenue sharing for investors, directly with real estate developers and contractors. There is no capital guarantee or fixed interest rates for investors.

L’Executive MBA en finance islamique a été lancé par l’Université Internationale de Casablanca (UIC) en partenariat avec et Al Maali Consulting Groupe (ACG), filiale d’Al Maali Consulting Group. Ce MBA permettra aux cadres et managers de la finance, particulièrement du secteur bancaire, d’être former aux métiers de la banque, de la finance, de l’assurance et de la gestion d’actifs. Notons que la formation est assurée pendant les week-ends, répartie sur 12 mois. Elle comprend des séminaires animés par des experts nationaux et internationaux, des dirigeants d’entreprise et des influenceurs. Mais aussi des projets intégrés en relation avec les business stratégiques de la finance islamique; des séances de coaching et d’encadrement des projets professionnels.

The re-entry of #Pakistan into the international Islamic bond market after a gap of two years with the issuance of one billion dollars Sukuk will help the country bolster its external account position. According to analyst Saad Hashemy at Topline Securities, Pakistan's ability to raise funds from the global financial markets at the historic low rates shows investors' optimism about the economic prospects. The government raised $1.0 billion through the issuance of five-year dollar-denominated Sukuk at the historic low rate of 5.5%. The investors across the world showed interest in parking around $2.4 billion in the bonds. Pakistan’s credit rating has remained stable or improved during the last few years. International credit rating agencies Moody’s, Fitch and Standard & Poor’s (S&P) rated Pakistan as B3 (stable), B (stable) and B (positive), respectively in their last ratings.

According to The World Bank, less than 20% of Muslims use conventional banking worldwide, in spite of the ever growing number of Islamic financial products. The bank's Vice President and Treasurer, Arunma Oteh, said this in Washington during the World Bank High Level Seminar on Islamic Finance. Ms. Oteh said that the huge financial gap that exist in the Muslim world could not be bridged and the lack of trust of financial service providers was a reason for the disparity. She added that Islamic finance was a tool for achieving Sustainable Development Goals (SDGs) with Islamic investors applying the ethical and quantitative measures in their investment decisions.