IslamicFinance.de

Ashraf Piranie, deputy chief executive and finance director at The Nottingham, has received an accolade for his contribution to finance and banking at the British Muslim Awards. Mr Piranie joined the board of The Nottingham in 2007 and was previously the finance director and joint managing director at the Islamic Bank of Britain and director of finance at Alliance & Leicester Plc. One of his most notable achievements was the proactive part he played in introducing Islamic finance legislation to the UK's Finance Acts. He continues to play an important role on UK banking regulation and since 2013 has been a member of the PRA's Practitioner Panel representing the building society sector.

The Royal Jordanian Airlines announced the successful closure of its US$ 275,000,000 dual conventional and Islamic secured syndicated facility. The syndicate comprised of seven banks based in Jordan, UAE and Qatar; they are Mashreq, Arab Bank plc, Al Khalij Commercial Bank (Al Khaliji) Q.S.C, Dubai Islamic Bank, and The Commercial Bank/Qatar acting as Mandated Lead Arrangers, Arab Jordan Investment Bank as Lead Arranger and Bank al-Etihad as Arranger. Mashreq Bank acted as the sole book-runner for the loan. The facility carries a tenor of 5 years and the proceeds of the facility will be primarily utilized to consolidate and refinance RJ's existing debt and further support the company's on-going strategic growth and turnaround plans on the short- and medium-run.

Despite the emphasis on ethics, and the growth of the industry at a time when women are increasingly making their mark on the corporate world, the Islamic finance sector is incredibly male-dominated. In the Gulf region, where much of the sector is concentrated, there are no female Islamic scholars acting as advisors to financial institutions, a key position in the sector. While there are a few prominent women sitting on company boards and working as CEOs in Bahrain and Kuwait, they are notable exceptions. Clearly, this is in large part a result of cultural factors. But even in the UK, progress has been slow. However, there is one country where women are seizing plenty of top leadership roles: Malaysia.

Only a fraction of US$11.5 trillion worth of wealth owned by Muslim individuals, institutions and government is managed by Islamic banks and financial institutions. About US$9.5 trillion remain outside the global Islamic financial services industry that has US$2 trillion asset under management, said Professor Humayon Dar, Chairman of Edbiz Corporation at the 2nd Annual International Forum on Islamic Finance in Khartoum, Sudan. Professor Humayon Dar pointed out that the missing dollars are managed by Western financial institutions. Consequently Islamic banks and financial institutions are losing potential revenue of US$180 billion on an annual basis.

Contrary to popular opinion, Sharia law is not taking over Britain. It is seen as a rule of law that contributes to the way Muslims live. Most importantly, the principles of Islamic finance encourage fairness. The presence of the likes of Allen & Overy, Hogan Lovells and Norton Rose Fulbright shows how far Islamic finance has come. The unwavering investment that has occurred over the Middle East, with offices springing up in Saudi Arabia, Oman, Qatar, United Arab Emirates and Kuwait is a testament to firms taking the Islamic practice seriously. Trainees can develop leadership skills by undertaking research and ascertaining what works for clients.

The central London offices must be run in line with Islamic principles because of a deal with rich Middle Eastern investors. They demanded the buildings be audited by Muslim scholars and subject to special rules in exchange for lending the Government £200million. The deal currently only covers three buildings - Richmond House, Wellington House and a property on Whitehall - and is almost unheard of outside of the Middle East. But Treasury officials hope hundreds of Western companies will follow their lead and turn over buildings to Islamic financiers in similar deals. The exact restrictions under which the buildings must be run which were not spelled out in the text of the deal struck with overseas investors.

A fraud of around Rs 30 billion in Islamic investment system of Mudarba and Musharaka has been committed by the Elixir Group of Companies, reveals an investigation by National Accountability Bureau. The fraud, which has victimised over 35,000 people across the country, was committed by a group of so-called Islamic scholars through a large number of mosque imams, seminary managers, madrassa students, their families, relatives and acquaintances. The scam planners are all settled abroad and most of them have dual nationalities, according to a NAB officer who is close to the investigation process.

The prospects for Islamic finance remain strong despite the inevitable correlation between oil price and Islamic wealth. Bahrain Central Bank Governor Rasheed Al Maraj said while there were some headwinds recently, the long-term growth picture within its strongest markets in the Middle East and Southeast Asia remained robust. There is a clear demand for Shariah-compliant financial products and services. As the industry matures, it is able to do more to meet that demand, he explained. Rasheed also highlighted that it was imperative for the industry to continue addressing challenges that could hamper longer-term growth such as investment in education and training.

Tahya Masr (Long Live Egypt) Fund, originally initiated by President Abdel Fattah al-Sisi to support national economy, is planning to launch a leasing firm, its executive chairman Mohamed Ashmawy said. The anticipated firm will be with a capital up to 100 million Egyptian pounds (US$13 million). The firm will help provide job opportunities for the youth. Since the fund was initiated in 2014, individuals and businessmen have contributed billions of Egyptian pounds to the fund. The fund's executive committee encompasses leading businessmen like Naguib Sawiris, former Grand Mufti Ali Gomaa and a representative from the Supreme Council of the Armed Forces.

International Finance Corporation (IFC) has agreed to invest $75 million in PT Bank Danamon Indonesia Tbk (BDMN), to develop the bank’s Islamic trade financing operations. Bank Danamon is majority owned by Temasek Holdings (Private) Limited through its affiliate Fullerton Financial Holdings Ltd (67.37%) with JPMB Franklin Templeton Investment Funds holding 6.81 per cent and 25.82 per cent with the public. IFC proposes to invest up to $75 million structured as an Islamic trade financing instrument. The total facility size would be approximately $150 million including co-investment by the Bank. With this investment, IFC is targeting deepening of Islamic financing in Indonesia through new financial products and services designed to expand outreach.

The Shari’ah Advisory Council (SAC) of the Central Bank of Malaysia discussed the issue of application of Tabarru` contract (voluntary gift) in Takaful, transfer of ownership of Hibah asset, breach of condition in Wakalah bi al-istithmar contract (agency contract for investment) and Wa`d (promise) which is attached to action, time or situation. The SAC has decided the following: 1) The underlying concept for Takaful scheme is Tabarru` and Ta`awun among the Takaful participants. 2) Tabarru` in Takaful is applied through contributions from the participants to the Tabarru` fund which is managed by Takaful operator. 3) Financial obligation (Zimmah maliyah) of Tabarru` fund is independent from the financial obligation of Takaful operator and individual Takaful participant.

Bank accounts frozen. Bankers quizzed. As offshore authorities seek to track money flows involving Malaysia's troubled government investment fund, fresh questions are rising about doing business in the country. Crisscrossing countries from Switzerland to the US, Middle East and Singapore, investigators are chasing a trail of transactions linked to 1Malaysia Development Bhd. With the probes potentially running for years, investors and analysts say it may damage the perception that Malaysia is trying to become a more transparent place. The risk is political, economic and commercial. Malaysia's global score worsened in Transparency International's Corruption Perceptions Index for 2015, putting it on a ranking near Slovakia and Cuba.

Iran currently accounts for more than 40% of the world’s total Islamic banking assets, or around $482bn. Iran could easily cross the $1tn-asset mark by 2018 given the urgency for cash-strapped Iranian public and private companies to raise liquidity after years of isolation from the international finance industry. Analysts expect that a large number of sukuk and other Islamic financing vehicles will hit the world market soon. Adding to private companies, the country requires funds for its infrastructure development programmes earmarked for the next decade worth an estimated $1tn. However, analysts point out that the road back into the global finance system for Iran could be bumpy as the long isolation withheld Iranian banks from implementing globally accepted reporting and compliance standards, and restoring ties of its formerly stand-alone banking system to global financial institutions could prove regulatory and technically difficult.

The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank Group has signed an agreement with leading provider of Massive Open Online Courses (MOOCs), edX, to deliver Islamic banking and finance courses. On February 23, 2016, IRTI will begin offering, through the edX learning platform, free courses under two series, namely ‘Islamic Finance and Banking X’ and ‘Islamic Financial and Capital Markets X’. The IRTI MOOCs program is part of a project aimed at expanding access to knowledge in Islamic economics and finance to support the development of a dynamic Islamic financial industry globally. To register for the IRTI MOOCs, please visit http://irti.org/English/News/Pages/IRTI-is-launching-Massive-Open-Online....

The British Virgin Islands remains the most popular international financial centre for incorporating companies due to its tax neutrality, political stability and flexible legal system based on English common law. It is a ready-made platform for the needs of the Islamic finance market. As the Islamic finance market grows and matures, international financial centres such as the British Virgin Islands are being used to facilitate the structuring of Islamic finance products and transactions such and the incorporation of investment funds and corporate structures. There is likely to be an increase in Islamic asset managers using the BVI. In addition, there will likely be a continual increase in Islamic financial institutions and investors using BVI companies in Islamic finance structures such as musharakah and murabaha.

The Malta Stock Exchange (MSE) will launch on Monday an Islamic equity index aiming to attract business from Middle East firms, a move it hopes will also prompt the government to issue Islamic bonds. The launch of an Islamic index, developed alongside Dubai-based sharia advisory firm Dar al Sharia, and a debut sovereign sukuk would mirror steps taken by Britain and Luxembourg to develop their own credentials in the sector. In 2011, Malta's financial regulator issued a guidance note on Islamic investment funds, the first EU member country to do so, although no such funds have been listed yet. The exchange is also launching this month a new capital market for small and medium-sized firms.

Ratings agencies in the European Union, which came under fire during the financial crisis for the verdicts they gave on sub-prime debt, still need to be better supervised, the bloc's auditor said on Monday. The European Court of Auditors said that the European Securities and Markets Authority's supervision of the agencies since 2011 was well established, but not fully effective. Cumbersome registration rules and central bank hurdles are making it harder for smaller credit ratings agencies to compete with the "Big Three" in the EU, the report concluded. Ratings agencies came under the gun during the 2007-09 financial crisis.

Singapore has seized a “large number” of bank accounts over possible money laundering offences linked to an international investigation into the Malaysian state investment fund 1MDB, authorities in the city-state said on Monday. In an illustration of the mounting pressure from global regulators on the troubled fund, Singapore confirmed that it was “cooperating closely” with relevant authorities in Switzerland and the US. The Swiss attorney general announced on Friday that there were “serious indications” that $4bn had been misappropriated from Malaysian state companies and that a portion of the funds was transferred to accounts held in Switzerland.

There have been many surveys done by academic and business institutions on the skills gap in Islamic banking in recent years, and they all come to the same conclusion: that unless this gap is bridged, the impressive average annual growth of 15 per cent achieved by the Islamic banking industry in recent years will be undermined. More Islamic financial institutions, individually and collectively, need to engage in formalised training. Next, clear and easily understood standards need to be adopted that help to define products which Islamic banks and other institutions offer. Apart from the positive impact this would have on the regulation of the industry, this would also help to demystify what the sector offers to the general public.

The Swiss attorney general’s announcement that $4 billion may have been misappropriated from Malaysian state-owned companies opened a new front in the troubles facing 1Malaysia Development Bhd. Switzerland’s top prosecutor on Friday named a number of firms in Malaysia, Saudi Arabia and Abu Dhabi in relation to the matter, but gave no details of their roles, if any. The investigation is one of a series of global probes into 1MDB. A Malaysian government investigation last year found that almost $700 million entered Mr. Najib’s alleged bank accounts via agencies, companies and banks linked to 1MDB ahead of a close election in 2013.