IslamicFinance.de

In response to fears of being fined for compliance failings banks are making blanket exits from certain businesses or closing clients' accounts on a large scale. Regulators disagree with such wholesale withdrawal from certain areas of business, even if it is done in the name of de-risking. Such de-risking moves are being carried out mostly at the large international banks, however Asia has seen very little de-risking so far.

In Iraq the private sector is primarily cash-based. Bank financing is unavailable for all but the largest companies and even then is limited mainly to overdraft facilities. Private banks are subject to large and unpredictable demands for cash from depositors, while money transfer companies do not take deposits at all. The majority of households do not have a bank account, those with savings often hold them in the form of US dollar hoards in private safes.

Sheikh Abdullah bin Saud Al Thani, the governor of the Qatar Central Bank (QCB), issued operating instructions and governance principals for insurers operating in Qatar. The instructions relate to licensing, regulations and controls, risk management, accounting and actuaries reports. The new law stipulates that listed insurance companies must have capital greater than QAR100 mn or their risk-based capital requirement, while unlisted insurance companies must have capital higher than the figure set by the QCB.

Qatar National Bank has admitted that its systems were hacked but said the incident will not have a financial impact on the bank’s customers. Security researcher Omar Benbouazza said a Turkish far-right group called Bozkurtlar for Grey Wolves has claimed responsibility for the bank breach. He stated that the attackers used an SQL injection tool and the bank made a big mistake using known vulnerable software in the targeted host.

In Bangladesh Abdus Samad has been elected as the chairman and Mohammed Abdus Salam as the vice chairman of Al-Arafah Islami Bank. Samad is one of the founder directors of the bank, and vice chairman of S Alam Group. Salam is a sponsor shareholder and ex-chairman of Al-Arafah Islami Bank, and the current managing director of Mir Group.

Summit Bank has received approval from Pakistan's central bank to conduct due diligence on Burj Bank. Burj Bank held 4.4 billion rupees ($42 mn) in paid up capital as of December, compared with the regulatory minimum of 10 billion rupees. Burj Bank said it had shortlisted three financial institutions to conduct due diligence on a non-exclusive basis. It also received an extension from the central bank to meet the mimimum capital requirement until June 30.

The financial services industry is a highly-regulated industry due to the mobilisation of investors, depositors and policyholders, that is, public funds. Significant public trust demands proper supervision and monitoring of financial services and, hence, the promulgation of statutes, statutory provisions, guidelines and circulars with direct supervision from financial authorities. Soundness and stability of the financial system are the universal concern of all financial authorities, as specified by World Bank Financial Soundness Indicators (FSIs). With regards to regulation of Islamic financial institutions and services, various jurisdictions present different forms of regulatory framework. Variations of such framework are attributed to a country’s specific approach to the adoption of Islamic financial institutions, in particular, and embracing of the Islamic financial system, in general. A social choice to regulate significantly depends on the types of government financial systems and their perspectives on financial liberation, as well as either having a banking (such as Germany) or capital market (such as the United States) orientation.

What if the hundreds, even thousands of existing local currency initiatives were interoperable? Could they constitute a global system of exchange and offer at least a partial alternative to a dominant parasitic financial system? What are the social and technical obstacles to scaling grassroots initiatives which grow out of local community action?
The Credit Commons is a proposal from the builders of two of the largest blocs of community currencies in the world. Tim Jenkin, developer of Community Exchange Systems and Matthew Slater, developer of Hamlets and cofounder of Community Forge. A new white paper introduces the a backbone accounting infrastructure, touches on the economics and the technology, and describes the parts already in place. A small but diverse group has formed around the initiative and set up creditcommons.net where the paper is hosted and developments can be recorded.

Usman Siddiqui, the Managing Director of Equitable Financial Solutions (EFSOL), a Australian Islamic finance company announced the establishment of the company’s office in Singapore. The Singapore branch, which is registered as EFSOL Asset Management, will play a key role in the company’s regional strategy. EFSOL also announced the offering of its investment scheme, the EFSOL Income Fund, registered under the Monetary Authority of Singapore as a restricted Collective Investment Scheme.

According to The Fourth Annual Global Anticorruption Survey corruption remains a growing concern. Some 90 percent of those polled replied that their industries faced corruption risks, up from 85 percent last year. Also, 28 percent of respondents said the risk was significant, compared to 22 percent last year. The numbers for Africa and the Middle East increased significantly from last year's figures of 59 percent and 45 percent, respectively. For Russia, the score improved slightly, dropping two percentage points from 75 percent last year.

Abu Dhabi’s new financial centre has been running for six months but the corridors still feel quiet. Almost 200 people have been hired to work for Abu Dhabi Global Market (ADGM) since its inception in 2013 but they are nowhere to be seen. Commentators have warned that ADGM’s established neighbour the Dubai International Financial Centre (DIFC) could prevent it from flourishing, and argued it is unwise to locate two financial centres in such close proximity.

Dr Ishrat Hussain, Chairman Center of Excellence for Islamic Finance emphasized that Islamic Finance should not be restricted to a faith based segment and the banking sector has to increase investment in agriculture, SME and Islamic Microfinance. He stated that the share of Islamic Banks is 13pc growing at the rate of 28%, however, there are still regulatory and legal challenges which need to be addressed to make a real shift in lending profiles.

Dubai Islamic Bank’s Group Chief Executive Officer Dr. Adnan Chilwan, on his first visit to Pakistan, outlined the detailed growth strategy for the franchise in the country. This newly defined strategy repositions the Bank’s medium term plans alongside the transformational growth the Group has achieved as part of their 2014-2016 strategic agenda. The event also marked and celebrated the successful 10 years of the Bank’s operations in the country.

Backed by sovereign funds Iqbal Khan and his private equity firm Fajr Capital invests for financial and social returns ins Muslim countries. Fajr is a union of institutions that have high credibility and share the same values. CEO Iqbal Khan sees it as his mission to broaden the educated Muslim middle class.

he World Bank and Rabobank Foundation are teaming up to strengthen financial cooperatives in rural areas to improve financial services for smallholder farmers and agricultural SMEs. To get access to savings and credit, rural households and farms often establish cooperative financial institutions (CFIs). The idea for intensified cooperation on CFIs is based on the experience with a program in Albania, where Rabobank and the Irish League of Credit Unions Foundation are supporting the consolidations of two local CFI federations.

Dubai Islamic Bank (DIB) is inviting its shareholders to subscribe for new shares, by way of a 1-for-4 rights issue. The Board of Directors resolved on 27 April to increase the issued capital of the Bank by AED 988,437,777 raising the capital of the bank to AED 4,942,188,884. The New Shares will be issued at a price of AED 3.20 per New Share, reflecting the nominal value of AED 1.00 per New Share and a share premium of AED 2.20. The ownership limitation on DIB’s shares remains in place: 51 per cent of the issued share capital of the bank must be owned by nationals of the United Arab Emirates.

Janet Ecker, president and CEO of the Toronto Financial Services Alliance said Canada’s stable financial market and risk management expertise, coupled with a large and growing Muslim population and an openness to the world, enables Canada to become the North American hub for Islamic finance. Just over one million people identified as Muslim on the most recent household survey in 2011, and that number is expected to grow to around three million by 2030. Muslims represented 3.2 percent of the Canadian population in 2011, up from 2 percent a decade earlier.

Qatar National Bank is investigating a security breach that appears to have exposed sensitive personal data for what could be hundreds of customers, including employees of international broadcaster Al-Jazeera and potentially senior government officials. Four people identified in the files and reached by The Associated Press confirmed their personal information was authentic. It is unclear if all of the data posted online originated from the bank itself. The bank said it was coordinating with the concerned parties to investigate the matter and offered its assurance that there would be no financial impact for its clients or the bank.

Capital Intelligence Ratings announced that it has downgraded the ratings of Tadhamon International Islamic Bank (TIIB), based in Yemen. TIIB’s Financial Strength Rating (FSR) was downgraded to 'B-' from 'B' due to the extremely challenging local operating environment and the attendant risk to the Bank’s financials, and continued pressure on earnings and associated volatility. The Bank’s Long-Term Foreign Currency Rating (FCR) is downgraded to 'C' (from 'C+') due to sovereign risk factors and the operating environment. The Short-Term FCR is maintained at 'C'. All ratings remain on a 'Negative' Outlook.

Shariah-compliant financing is emerging as a viable alternative to conventional banking in order to fund infrastructure deals, which could help promote use of longer-term transactions in Islamic finance. This month Pakistani banks arranged Rs100 billion ($955 million) worth of 10-year Islamic bonds (sukuk) for a hydropower plant, the largest infrastructure deal to use Islamic financing in the country. Finance Minister Ishaq Dar said Pakistan wanted to make Shariah-compliant financing its first choice for infrastructure and long-term financing needs.