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Islamic finance is making further inroads in agricultural sectors globally. The trend is increasingly adopted in Central and Westerns Asian countries, in Southeast Asia and in Sub-Saharan Africa. Firstly, the impact of Islamic finance can be higher than that of other financial products due to its asset-based structure. It can be applied in many fields, starting from the purchase of farming machines and equipment, seeds and pesticides, warehouses, as well as in the dairy, livestock and fishery sectors. Ijara contracts can be used for leasing or renting farm machines and other equipment. Other structures such as musharaka or mudaraba can be used for long-term developments such as rural housing, reforestation or irrigation. Secondly, Islamic finance can help broaden financial inclusion by establishing cooperatives or partnership-based financing structures. In Pakistan the state bank has now issued guidelines on Islamic agricultural finance. In Indonesia, the government has launched a new national master plan and has explicitly included agriculture as a field for Islamic finance.

Al Baraka Bank has finished due diligence for the proposed merger of Burj Bank. Abid Qamar, chief spokesman at the State Bank of Pakistan (SBP), said Al Baraka was given permission for due diligence of Burj Bank and they have completed the process. Summit Bank and Bank of Khyber were also interested in Burj Bank, but they did not carry out any due diligence process. The deal is expected to be completed within next three months, but the complete integration of both entities would take six to eight months. The potential deal would be a part of the significant efforts, currently being made by the SBP, to fix the problem of the small banks that fell below the minimum capital adequacy ratio requirement and minimum paid-up capital requirement.

A 2% tax cut announced for all Shariah-compliant companies is bound to give a big boost to Islamic Banking in Pakistan. The government has introduced the 2% rebate for Shariah-compliant companies through the Finance Act 2016. The Finance Act also covers the entire national budget for the fiscal year 2017. The latest decision to expand the programme followed a report by the State Bank of Pakistan (SBP), which confirmed a continuing spread of the Islamic banking system in the country. Islamic banks currently have a 13% share of the conventional banking in Pakistan.

In #Pakistan the Ministry of Finance stated that amendments in legal framework are under review to strengthen the framework of taxation proposals for Islamic Banking. The initiatives mainly include review of Mudaraba guidelines to align those with overall regulatory framework of Islamic Finance, issuance of Sukuk guidelines, issuance of Takaful rules and government Ijara Sukuk. A multi-tiered Shariah supervisory and compliance framework has been put in place. Also, a Shariah governance framework for Islamic Banking Institutions (IBIs) was formulated, which explicitly defines Shariah related rules and responsibilities of all key organs of IBIs. The initial Minimum Capital Requirement (MCR) for an Islamic Banking subsidiary was revised from Rs 10 billion to Rs 6 billion.

The AL-Baraka Bank Pakistan (ABPL) has decided to purchase the Burj Bank Pakistan. The ABPL bank will purchase the Burj Bank through swap Ratio of 1 share of ABPL for every 1.7 shares of Burj Bank for shareholders of Burj Bank, while its face value will be Rs 10 each in the ABPL for every 1.7 shares of Burj Bank. The ABPL will finalise this merger on August 22. In April this year, the ABPL was allowed due-diligence of the Burj Bank for the amalgamation of two of the smaller entities in Pakistan’s banking industry. The two banks deal in Islamic products only.

The Islamic Advisory Group (IAG) for Polio Eradication has adopted a new work plan to end polio in Pakistan and Afghanistan. The announcement came at the third annual IAG meeting held at the Islamic Development Bank’s headquarters in Jeddah. In a statement issued by the meeting, the IAG affirms the religious obligation of parents to vaccinate their children to keep them healthy. According to IAG deputy Dr. Abbas Shouman, the misperceptions usually arise due to fatwas issued by non-specialists who leave children exposed to handicap or death. IDB president Dr. Ahmad Mohamed Ali urged the partner institutions of the IAG to coordinate with WHO to transfer their experience in polio to other emergency and epidemic situations, particularly in Africa.

Silkbank introduced Emaan Islamic Banking (EIB) through conversion of its seven conventional banking branches into dedicated Islamic Banking branches. Emaan Islamic Banking offers a complete suite of deposit products including Current Account, Saving Accounts and Term Deposits. Diminishing Musharaka, Musawamah, Murabaha, Musharaka and Trade Finance facilities are also available. The Emaan Islamic Banking’s branch network stands at a total of 10 branches in 8 cities across Pakistan.

The Steering Committee of Sitara Chemicals received laudation for the promotion of Islamic Banking in #Pakistan. The Committee was headed by Mr Saeed Ahmed, Deputy Governor State Bank of Pakistan. Sitara Chemicals has shared with Islamic debt investors its profits without comprising on true Musharakah principles. This fact is evident from the level of rate of return offered by the Company on its earlier Islamic debt issues. In 2012 Sitara Chemicals signed an agreement for design and procurement of Coal Based Power Plant having Capacity of 38.5 MW. Total Project cost was estimated at Rs 3.1 billion and Diminishing Musharika Facility Rs 2 billion from syndication of renowned Islamic Banks of Pakistan. In July 2016, this project has been commissioned and trial production has started. First instalment of this facility has been repaid as per its planned schedule.

In #Pakistan Faisal Private Bureau (FPB) has transferred its entire shareholding in Faysal Bank Limited (FYBL) to Ithmaar Bank. On June 30 FPB has transferred over 38.686 million of its stakes in Faisal Bank into Ithmaar's CDC account. However, FYBL secretary Aurangzeb Amin said the transaction had no affect in terms of change of ownership. He also added that the State Bank of Pakistan had already granted its approval for transfer of shares to Ithmaar Bank on April 29, 2016.

Pakistan Industrial and Traders Associations Front (PIAF) has felicitated Wapda and National Bank of Pakistan (NBP) for the Rs 100 billion agreement of 16 banks under Shariah compliant facility for Neelum Jehlum Hydro Power (NJHP) project. There was a long delay and the cost of project escalated up to Rs 414 billion from initial estimates Rs 84 billion. PIAF chairman Irfan Iqbal Sheikh said that now a ray of hope appeared for the completion of the project. He said this is the biggest ever funds mobilisation for a public sector entity in which 16 local banks participated. The issuance of Sukuk worth Rs 100 billion for NJHP would go a long way in arranging funds for other hydropower projects.

The controversial sale of the Kasb Bank to Bank Islami has been challenged before the Islamabad High Court. The petition was filed by Mohammad Khalid Randhawa, a shareholder of the Kasb bank, who claims that Kasb Bank was sold to the Bank Islami for only Rs1,000. He was praying before the court to declare the sale illegal. Judge Aamer Farooq made documents related to the inquiry of the deal as part of judicial record and adjourned the case.

Issuance of Sukuk is up all around the world, up on last year, due to current economic factors and the goodwill for the instrument among global investors
The good news on the Sukuk front is continuing. The proportion of Sukuk bond issuance hit a record in the first quarter of 2016 in the main markets for this form of finance, said Fitch Ratings. According to Fitch’s data, there is a clear upwards trend in use of Shari'ah-compliant borrowing as more countries create legal frameworks to support issuance and as issuers try to attract a broader investor base, including Islamic finance investors.
Total new Sukuk issuance in the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan was around $11.1 billion in the first quarter of 2016, with a maturity of 18 months. Issuance was up 22% from the fourth quarter of 2015 and 21% from a year earlier, while non-Sukuk bond issuance of $17.1 billion was down 23% quarter on quarter and 45% year on year. Sukuk represented 39.3% of total bond and Sukuk issuance in these countries during the quarter—the highest proportion in the past eight years.

In Russia a Memorandum of Understanding was signed between Islamic business and finance development Fund (IBFD) and TAWUN, a Shariah consulting company of Pakistan. The Pakistani delegation was led by S.M Muneer from the Trade Development Authority of Pakistan and Mehmood Arshad, the Founder of TAWUN. Arshad stated that the Russian market is very interesting for his organization and TAWUN has all the necessary experience and competence. They will support Russia to launch Shariah-compliant products and get additional funding from OIC countries.

In Pakistan Islamic modes, financing and products have captured at least 15% of the overall financial market share in 2016. The interest is illustrated by the results attained by the UAE-based banks Alfalah and Bank Al Meezan. Bank Alfalah CEO Atif Bajwa reported a double-digit top line growth, Rs7.523 bn in CY-15, 33% growth from 2014. Meezan Bank reported a Rs2.67 bn profit for the first half of CY-2015. The bank has also introduced Meezan Asset Allocation Plan-1, Pakistan's largest asset management company.

The German car manufacturer Audi has partnered with BankIslami Pakistan to introduce its brand in the Pakistani market. A Memorandum of Understanding (MoU) has been signed with Premier Systems, Audi’s general importer in Pakistan. BankIslami will provide tailor-made financing packages to Audi customers across the country through its flagship product of Islami Auto Ijarah. The MoU was signed by Muhammad Yasin Khan, CFO of Premier Systems and Yasser Abbas, Section Head Auto Ijarah, BankIslami.

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.

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.

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.

Pakistan has great potential of starting its own sustainable, digital turnaround. The country is embracing digital technology as a powerful tool which is not just limited to simple communication anymore rather it has become a life-changing catalyst. According to Alliedcrowd statistics, Pakistan currently ranks 22 among developing countries on the crowdfunding market with annual estimated business of $5.4M. The prospects for crowdfunding are quite positive in Pakistan as small businesses and young entrepreneurship is gaining popularity in the country.