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Indonesia's regulators have launched a plan aimed at growing the sector, which currently accounts for less than five percent of banking assets. It is modelled after similar bodies in other countries, such as the International Islamic Financial Centre in Malaysia. In addition to the OJK roadmap, the government has announced plans to merge the Islamic banking subsidiaries of four state-owned banks to create an Islamic mega-bank, which should be able to provide better services than the current Islamic lenders. Authorities believe it is a good moment, with many Indonesians getting wealthier after years of strong economic growth and an increasing trend towards piety across broad sections of society.

China’s foreign-exchange reserves fell by a record in the third quarter as the central bank sold dollars to support the yuan after a surprise August 11 devaluation sparked the currency’s steepest slide in two decades. The stockpile plunged by $180 billion in the three months through September to $3.51 trillion. The hoard shrank $43.3 billion in September, less than the $57 billion predicted in a survey, suggesting the pace of central bank intervention has eased. The central bank has this year lowered the proportion of deposits that lenders must lock away in an effort to offset capital outflows and intervention to support the yuan.

Dubai Islamic Bank PJSC has reportedly obtained an approval from Indonesia's Financial Services Authority to increase its stake in PT Bank Panin Syariah Tbk to 40 percent from 24.9 percent currently, according to chief executive of Dubai Islamic Bank, Adnan Chilwan.

Chinese property developer Country Garden Holdings Company Ltd plans to issue up to MYR1.5 billion ($340 million) of medium-term sukuk, through its Malaysian subsidiary, to finance the latter’s present and future investments. The issuer, Country Garden Real Estate Sdn Bhd, plans to commence marketing of the first tranche of medium term notes (MTN) to qualified investors. The MTN will not be offered to the general public and will not be listed on any securities exchange, Country Garden said. The mode of issuance, size and coupon rate of the proposed issue will be determined prior to distribution, and is subject to market conditions and investors’ interest. CIMB Investment Bank Berhad was appointed as the lead arranger and lead manager.

Khazanah Nasional Bhd is "not in a rush" to sell its 30% stake in Bank Muamalat Malaysia Bhd, under the proposed merger with Malaysia Building Society Bhd (MBSB). Khazanah's managing director Tan Sri Azman Mokhtar said the Malaysian state-owned investment arm's decision was incumbent upon the negotiated value for its Bank Muamalat stake. He cited the right price and the right configuration as requirements for a sale. DRB-Hicom Bhd holds the balance 70% stake in Bank Muamalat. According to Azman, as Khazanah is only a 30% shareholder in Bank Muamalat, Khazanah is not taking the lead in the merger talks. Khazanah will make a decision based on whatever they decide, he added.

Malaysia Building Society's (MBSB) planned merger with Bank Muamalat Malaysia is expected to create a financial services entity with a collective asset size of some RM60 billion. Affin Hwang Investment Bankwrote in a note today that MBSB and Bank Muamalat's assets were valued at RM41 billion and RM22 billion respectively. Nevertheless, there could be potential write-offs of the loan book subsequent to due diligence exercises, which is likely to follow suit. However, Affin Hwang also said they were not too optimistic about the merger, as previously there have been other merger discussions between Bank Muamalat and other parties that were unsuccessful.

A first-of-its-kind bank following Islamic principles was opened in Xining, capital of China's northwestern Qinghai province. The Jianguo Road Branch of Xining Rural Commercial Bank began operation as Muslims celebrate Eid-ul Adha tomorrow. Before opening, the bank invited an imam from the city's Dongguan Mosque to offer supervision in terms of Islamic doctrines, standard of behaviour and the use of Arabic translations in their services. The bank offers small-sum loans to Muslim customers at 15 per cent of average interest rate as well as guarantee and mortgage services for Mecca pilgrims.

Malaysian companies building railways and power plants under Prime Minister Datuk Seri Najib Razak’s US$444 billion (RM2 trillion) development programme will help revive sukuk sales from the slowest quarter since 2010. Corporate issuance could rise to as much as RM60 billion for the full year, said Mohd Effendi Abdullah, head of Islamic markets at Kuala Lumpur-based AmInvestment Bank. More Shariah-compliant bond sales are likely to be announced once the United States goes ahead with an expected interest-rate increase, removing an uncertainty that’s stifled issuance, said Effendi.

Malaysian companies building railways and power plants under Prime Minister Najib Razak’s $444 billion development program will help revive sukuk sales from the slowest quarter since 2010. Corporate issuance could rise to as much as 60 billion ringgit ($13.5 billion) for the full year, said Mohd. Effendi Abdullah, head of Islamic markets at Kuala Lumpur-based AmInvestment Bank. While the forecast would mark a pickup from the 31.5 billion ringgit sold so far this year, offerings would still remain below levels for the past three. Effendi said sukuk issuers that need the funds will still go ahead with sales even if market conditions are tough because they can structure longer-maturity debt to appeal to pension funds and insurers.

Malaysian Electronic Payment System Sdn Bhd (MEPS) and its member banks will waive the fee for its real-time Instant Transfer, previously known as Inter-bank Funds Transfer (IBFT) service, from tomorrow – Oct 1 – to Dec 31. In a statement yesterday, MEPS said the zero fee was applicable for transactions on the Internet and mobile banking channels of the participating banks. However, the instant transfer fee at automated teller machines (ATMs) remained at 50 sen, it said. The initiative shows the banks’ and MEPS’ support for Bank Negara Malaysia’s (BNM) e-Payment adoption. By 2020, BNM is targeting to increase the number of e-payment transactions per capita from 72 to 200.

Indonesia is drawing interest from Middle Eastern banks seeking to tap the world’s biggest pool of Shariah-compliant investors as some Islamic lenders wind down or close operations in Malaysia and Singapore. Emirates NBD PJSC wants to invest at least US$300 million in a new Shariah lender or acquire a stake in an existing one. The investments would be a boost for Indonesia in its ambition to become an Asian hub in the US$2 trillion industry. Emirates NBD’s plan comes as Kuwait Finance House prepares to close its Islamic operations in Malaysia, while Bahrain’s Elaf Bank BSC has already done so. DBS Group Holdings Ltd is winding down its Singapore arm catering to Muslims.

Indonesian regulators have launched a plan aimed at growing the sector, which currently accounts for less than five percent of banking assets, compared to a quarter in Malaysia and around half in Saudi Arabia. Authorities believe it is a good moment, with many Indonesians getting wealthier after years of strong economic growth and an increasing trend towards piety across broad sections of society. The Financial Services Authority (OJK) is spearheading the drive, and unveiled a five-year roadmap earlier this year that included plans to educate the public about Sharia’h lenders and the establishment of an Islamic finance committee to better manage the sector.

Pak-China Joint Chamber of Commerce and Industry (PCJCCI) has called for making the businesses and commercial activities in accordance with Islamic financial laws. The PCJCCI President Shah Faisal Afridi said all stakeholders should understand the limitations at this stage and work towards its advancement to develop an economic system truly reflective of the sacred principles of Islam. According to Global Islamic Finance Report, Pakistan ranked at number nine in the world in terms of development of Islamic financial services industry in the country, and second largest Islamic market (population-wise) after Indonesia, and could become the most important player in Islamic banking and finance, if it attained 20 percent market share.

Allianz Life Insurance Malaysia Bhd, which is aiming to have 10,000 agents by year-end from 8,300 now - remains interested in the takaful business although it is not in talks with any potential acquisition target now. Allianz Life CEO Rangam Bir said it sees that a large part of the market has the need for takaful solutions. Allianz Life is a subsidiary of Allianz Malaysia Bhd, which in turn is Allianz SE’s subsidiary. Allianz SE had failed in an attempt to buy a local takaful operator in 2011. Last year, a member of the board at Allianz SE said that it is not economically viable to enter into the domestic takaful market just yet.

News that Islamic Bank of Asia, a subsidiary of Singapore’s banking major DBS, will be closing down left the Islamic finance community in the city state baffled. The institution was founded just eight years ago by DBS to tap the Islamic finance potential in Southeast Asia and beyond – with $500mn of paid-up capital shared between DBS and prominent Gulf investors. However, DBS announced in a statement to the Singapore stock exchange on September 14 that IB Asia “will be gradually wound down as it was unable to achieve economies of scale.” The wind-down will likely take two to three years. The apparent failure of IB Asia has been partly attributed to Singapore’s lacklustre regulatory framework for Islamic finance and the absence of a larger local client base.

Qatar National Bank (QNB) has halted preliminary talks with Kuwait Finance House (KFH) to buy its Malaysian unit, the Gulf Arab region's largest bank said. An agreement has not been reached. Earlier, KFH's chief executive Mazin al-Nahedh had said the bank had ruled out a sale or merger for its Malaysian unit, adding the largest Islamic bank in the Gulf Arab state will begin restructuring the unit with immediate effect. The disclosure from KFH comes after a source familiar with the matter said last week that QNB had bid to buy the unit, with the Qatari lender later acknowledging it was in early talks about an acquisition.

CIMB Group Holdings Bhd is expected to appoint Rafe Haneef, who currently heads HSBC Amanah Malaysia Bhd, as the new chief executive officer of its Islamic banking arm CIMB Islamic Bank Bhd. It is understood that Rafe has tendered his resignation, after almost five years of helming the foreign Islamic lender. The appointment is still in the process of getting Bank Negara Malaysia’s approval. CIMB Islamic Bank has been without a captain ever since Badlisyah Abdul Ghani resigned as its CEO and board member in July. CIMB Islamic Bank then appointed Mohd Shafri Shahul Hamid as the person in charge of the bank while it looked for a new CEO.

slamic finance is gaining prominence as a channel for China to expand its economic influence abroad as banks strengthen ties with Muslim-majority countries and Chinese companies start to tap offshore pools of Islamic funds. With a Muslim population of about 20 million, China has little reason to develop Islamic banking at home. But there are powerful reasons for it to get involved in the sector overseas. China wants to build stronger trade ties with Asian countries under its "One Belt, One Road" strategy to rebuild Silk Road trade links with Asia and Europe. The network will include the world's main centers of Islamic finance, the Middle East and Southeast Asia.

Kuwait Finance House (KFH) has ruled out a sale or merger for its Malaysian unit, its chief executive said on Tuesday. Mazin al-Nahedh added the lender, the largest Islamic bank in the Gulf Arab state, will begin restructuring the unit with immediate effect. The disclosure from KFH comes after a source familiar with the matter said last week that Qatar National Bank had bid to buy the unit, with the Qatari lender later acknowledging it was in early talks about an acquisition.

Dubai-based bank Emirates NDB has expressed interest in spending $300 million to establish Islamic banks in Indonesia as it seeks to tap into the archipelago's underdeveloped financial sector. Emirates NDB would join Middle Eastern banking rivals Qatar's Masraf al Rayan and Dubai Islamic Bank in its quest to set up shop in the nation. Emirates NDB will have to team up with local partners in order to fulfill its aim of establishing a new bank as a current government regulation limits foreign ownership to 40 percent, said Dhani Gunawan, OJK director of Islamic banking research and development, supervision and licensing. Meanwhile, Al Rayan seeks to acquire shares in existing Islamic banks, he added.