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Police have named two more suspects in an alleged Bank Syariah Mandiri scam implicating three bank officials, bringing the total number of suspects to six. The two latest suspects are Hen Hen Gunawan and doctor Rizky Adiansyah. Gunawan allegedly used the identity cards of his 26 employees to embezzle up to Rp 12.4 billion ($1.1 million) from the bank through its loan scheme. Rizky, meanwhile, allegedly borrowed ID cards of some of his neighbors to siphon Rp 12.2 billion from the bank. These two new suspects were ‘instructed’ by an accounting officer of the Bogor branch of BSM, John Lopulisa. John was earlier arrested, along with the head of BSM‘s primary branch in Bogor, M. Agustinus Masrie, the head of a smaller Bogor branch, Haerulli Hermawan, and Iyan Permana. The fraud is believed to have cost the bank Rp 59 billion.

Asia needs to invest about $8 trillion in overall national infrastructure, the use of cross-border financing and investment through Islamic finance will help to widen the investor base and lower the cost of financing for well-structured investments, the Asian Development Bank said. In recent years, Islamic finance has been enjoying growth rates of 20 per cent a year, most of which comes from Asia. Increased activity is expected in Thailand, China, Bangladesh and India as well as more traditional market such as Malaysia, Indonesia and Pakistan. The conference on Islamic Finance for Asia, opening in Manila on Monday, aims to create greater awareness on the potentials and opportunities brought about by Islamic finance to the region.

The Anti-Corruption Commission (ACC) of Bangladesh has filed 12 cases against 53 officials of five banks and the Bismillah Group for their alleged involvement in the embezzlement of funded loans worth over Tk9.9bn. The list of the accused included 13 people from Bismillah Group, 12 Janata Bank officials, eight Prime Bank officials, seven Premier Bank officials, five Jamuna Bank officials and eight Shahjalal Islami Bank officials. According to the probe report, Bismillah Group, in association with the bank officials, embezzled the money through loans against trust receipts using names of fake foreign buyers. They secured cash incentives against fake export documents, taking advantage of inland bills purchases and overpricing non-existing export items. The inquiry also found that the group laundered money abroad.

Malaysia's Malayan Banking (Maybank) has launched an Islamic asset management unit to cater to growing investor appetite for sharia-compliant investment products. Maybank asset management will leverage the Maybank group's network of business lines, which range from consumer banking to Islamic insurance, as well as its geographical presence across Asia. It aims to launch Asian-themed investment funds using a bottom-up investment strategy, with products to be marketed primarily in Malaysia and Indonesia. Maybank acquired Indonesian asset management firm PT GMT Aset Management, and it will also explore opportunities in the Middle East through Maybank Investment Bank's stake in Saudi Arabia's Anfaal Capital, according to Nor Azamin Salleh, chief executive of Maybank asset management.

Dear Reader,

IslamicFinance.de is still edited by myself, Michael Saleh Gassner. In the same time the website became part of the family's publishing house, Al Kitab.

Myself I moved to Geneva for professional reasons, working as Islamic private banker. IslamicFinance.de remains to be a private passion.

Best regards,

Michael Gassner

The Law Harmonisation Committee is working to encourage use of Malaysian rules for cross-border Islamic deals instead of English law. Regulations are being amended to remove loopholes that discourage Shariah deals to make the nation the preferred place to settle disputes. Malaysia still has a single set of laws that govern both Shariah-compliant and non-Islamic commercial contracts, and they can sometimes render Islamic deals less competitive. However, Malaysian law is unlikely to displace English legislation in other deals, although it may find some acceptance among offshore investors who have businesses or investments in the country.

Dear Readers,

Venture Capital has often been regarded as the ideal tool for Islamic finance, particpating in profits and losses of innnovative companies.

Now a major assessment has been done by Cambridge Associates in terms of performance, comparing it to the wider stock market. Result: No outperformance. Considering the lack of liqudity it seems to be much less attractive to professional investors than thought.

See: http://www.cambridgeassociates.com/pdf/Venture%20Capital%20Index.pdf

The lack of success also is induced by lack of transparency and fee models taking away the eventual outperformance. This is for the US market of course. Experiences in less advanced markets could be better or even much worse.

It still has other benefits, as diversifying risk, promoting overall growth and eventuall fostering social benefits.

In order to protect the investor, proper disclosures must be integrated to grow this industry in a healty manner. Further the focus on impact investing will ensure that value is created and risk better managed. What impact investing means could be read here:

See: http://www.thegiin.org/cgi-bin/iowa/home/index.html

Amanie Shariah Screening system app, launched by Amanie Nexus Sdn Bhd, screens and filters all public-listed equity/stocks in the global stock exchange to produce the universe of Shariah investable stocks. With this app, it is possible to download and check the Shariah status of over 33,000 stocks worldwide any time and anywhere before making any investments. Newly released, the app is available in Android variant on Google Play Store before it is released a Windows Phone 8 version and Blackberry 10. Razi Pahlavi, chief executive officer of Amanie Nexus, feels that Malaysia has sufficient talents in app development. However, the commercialisation stage is where most developers will need help and guidance, he notes.

The Saudi Arabian and Malaysian cooperative and Islamic insurance (takaful) markets are the only two that are seeing growth especially in new policies and profitability, according to the report 'Global Takaful Insights 2013' by Ernst & Young. Too many operators are pursuing an insufficient number of risks to increase their gross written contributions (GWC). The Saudi Arabian Monetary (SAMA) directed all insurance operators in the Kingdom to align with the cooperative insurance model. Saudi Arabia is the single largest Islamic insurance market in the world. Meanwhile, Malaysia has emerged as the world's largest family (life) takaful market, with a proven model and regulatory clarity. In the near to medium term, traditional growth markets, including Saudi Arabia, UAE and Malaysia, continue to ride on favorable market conditions and a young demographics structure, the report concludes.

Al Salam Bank Bahrain has led investment into a new waste-to-biodiesel plant in Hong Kong. The plant is operated by ASB Biodiesel, a Hong Kong-based company under the chairmanship of HRH. It is capable of processing waste oils into 100,000 tonnes of biodiesel annually. The construction cost of the plant was $165 million. Specifically, ASB Biodiesel collects waste cooking oil and up to 550 tonnes of grease trap waste per day, then processes the waste using multi-feedstock technology from Austrian designer BDI Bioenergy International.

Aeon Credit Service, which has been deliberating on a cash-raising exercise to beef up its capital adequacy ratio (CAR), is said to have chosen the route for a perpetual notes or sukuk issue instead of equity. Analysts are expecting the proposed perpetual notes or sukuk, which is subject to the authority's approval, to be announced soon given the non-bank financial institution's 16.3% CAR as of Aug 20, 2013 is nearing Bank Negara Malaysia's minimum requirement of 16%. Aeon Credit could raise some RM190 million from the proposed exercise to increase its CAR to 22% based on its shareholders funds. No significant dilution on Aeon Credit's earnings per share is expected. Aeon Credit's D/E ratio surged to 5.67 times as of Aug 20, 2013 from 4.6 times as of May 20, 2013.

The Indonesian banking and property mogul Dato Sri Tahir has donated 75 million US dollars towards programs for Indonesia's most needy. Ten million are for family planning, and 65 million for The Global Fund to fight AIDS, Tuberculosis and Malaria. The billionaire's gift is the largest donation the Fund has ever received from an individual in a developing country. Besides, Bill Gates through the Bill and Melinda Gates Foundation is also donating 65 million dollars to the Global Fund. The money will be used for prevention activities against HIV and AIDS. Moreover, the Fund has distributed 8.8 million bednets for malaria and supports detection and treatment of TB. Although philanthropy for social welfare isn't too familiar in Indonesia, wealthy individuals in Asia will be encouraged to give more generously if they see their contribution is being put to good use.

Malaysian takaful players are poised for a dearth in talent and must prepare their human resource (HR) requirements to avert the inevitable situation within the next five years. This is due to the fact that takaful players will have to hire more people following the introduction of the Islamic Financial Act (IFSA) 2013 which requires them to separate their family and general takaful businesses into separate entities. There is already a shortage of valuable industry personnels not just in the takaful industry but also in the conventional insurance industry now and this will be exacerbated when the IFSA comes into force.

Malaysia continues to take the lead in the Asean takaful industry with 71% share of gross takaful contributions, according to a report by Ernst & Young. Malaysia has a largely underinsured population with a low insurance penetration rate and strong government support for the Islamic finance sector. With a proven model and regulatory clarity, the country is set to further build on this leadership position. At present, Malaysia’s takaful sector derives nearly 78% of its net contributions from the family takaful business. However, globally the recent trends suggest an deceleration of the industry. Hence, expansion of the takaful industry is relatively slowing as firms struggle for scale and face growing competition, but the sector is still poised to sustain double-digit growth, said the report in its overall findings.

Broking firm, Miller has recruited Razi Sulaiman, a treaty reinsurance and takaful specialist, for its Malaysia operations. Miller anticipates significant future growth in the takaful sector and Razi will help to further develop the company's presence in this arena. Razi Sulaiman has built up knowledge of treaty and facultative reinsurance having specialised in technical support and claims previously. He began his career with Uni Asia Insurance before joining Miller. Working closely with Faris Davidson and the rest of the team in Malaysia he will help to grow Miller’s treaty and facultative book, focussing on Malaysia, Brunei & Indonesia and with particular emphasis on the takaful sector.

Syarikat Takaful Malaysia is targeting double digit-growth in new business this year driven by its family and group segments. Group managing director Datuk Mohamed Hassan Kamil said the company aims to maintain its lead in the group family takaful business, capturing 40% of the market sector, and 20% of the combined family and general takaful business. He noted that Takaful Malaysia will carry on being cautious in accepting only profitable underwriting contracts while avoiding those prone to greater risks. Hassan also mentioned that developing new product offerings is definitely an area the company is looking into as it strongly believes this would likely be the key driver of sales. Takaful Malaysia's growth areas are still within the fire and engineering segments.

BIMB Holdings yesterday received shareholders' nod to buy the remaining 49% stake it does not own in Bank Islam Malaysia Bhd from Dubai Financial Group (DFG) and Lembaga Tabung Haji (LTH). The acquisition is expected to be accretive to the group's earnings by another 5% from the financial year ending Dec 31, 2014 (FY14). With BIMB's current 51% controlling stake in Bank Islam, the Islamic banking unit is already contributing 85% to the group's revenue and earnings. BIMB shareholders also gave the green light to BIMB to raise up to RM3 billion through a combination of a rights issue and a sukuk to part-finance the acquisition. Besides, BIMB might reportedly acquire stake in Bank Muamalat Malaysia from state investment fund Khazanah Nasional and conglomerate DRB-Hicom.

The Insurance Commission (IC) is looking at the feasibility of establishing an Islamic insurance system, particularly the possibility of offering takaful insurance in the country to help Filipino Muslims. Taking notice of the disasters and destructions that happened in the southern part of the country, Insurance Commissioner Emmanuel Dooc said the IC is looking for ways to help the Muslims in Mindanao. Plans include the setup of an investment advisory council for preneed life and non-life that will look into viable investment activities, and the mandatory earthquake insurance for residential units and small and medium enterprises. However, the IC sees the need for Islamic finance regulations to be able to offer takaful products.

Shahjalal Islami Bank Ltd. has signed a Memorandum of Understanding regarding e-GP (Electronic Government Procurement) system with the Central Procurement Technical Unit (CPTU), Implementation Monitoring and Evaluation Division (IMED), Ministry of Planning. Under this Memorandum, Shahjalal Islami Bank Ltd. will provide e-GP (Electronic Government Procurement) service within the territorial jurisdiction of the Bank. CPTU of the Ministry will provide e- GP Portal Dashboard and training to nominated focal persons of the Bank for the use of payment system under e- GP. On the other hand, CPTU Ministry of Planning will publish the names of the Bank in e-GP portal link to the Bank as the e-payment service provider.

Islamic banking has a presence in India in the form of NBFCs and Baitul Mal (Islamic Treasury), but the business is small. Many Indian institutions, including some government-owned ones, have shown interest in this growing niche opportunity, for example Kerala government-owned KSIDC. India needs an Islamic banking model as a tool of financial inclusion. Moreover, India could attract the Middle East’s high investible surplus through Islamic banking and finance. However, there are also challenges, like the regulatory framework, dearth of Islamic banking professionals and lack of awareness. By not introducing Islamic finance, India is losing the opportunity of garnering capital from a large section of the Muslim population as well as from Islamic nations in the Middle East and elsewhere.