IslamicFinance.de

The only two central banks in the Gulf with products that allow Islamic lenders to make short-term investments are expanding their offerings as demand for cash-management tools rises. Bahrain’s central bank started a seven-day Islamic deposit facility last month, and the United Arab Emirates broadened the range of collateral Shariah-compliant lenders can use for overnight lending effective 1 April. Bahrain’s one-week facility is based on a wakalah contract, where the regulator invests cash on behalf of the lender. In the UAE, the central bank has expanded the list of eligible collateral for its Shariah-compliant overnight facility to include assets other than the regulator’s Islamic certificates of deposit.

The Council of the Islamic Financial Services Board (IFSB) has resolved to approve the adoption of a new Standard on Core Principles for Islamic Finance Regulation (Banking Segment) (IFSB-17). The main objective of IFSB-17 is to provide a set of Core Principles - along with associated assessment methodology - for the regulation and supervision of the Islamic financial services industry (IFSI), taking into consideration the specificities of the institutions offering Islamic financial services (IIFS) in the banking segment, the lessons learned from the financial crisis, and complementing the existing international standards.

Regulatory proposals for a liquidity coverage ratio for Islamic financial institutions could help address some of the industry's long-standing weaknesses, particularly the lack of high quality liquid assets (HQLA), Standard & Poor's Ratings Services said in the report “Basel III Requirements Could Strengthen Islamic Banks' Liquidity Management”. Moreover, last year, the Islamic Finance Services Board (IFSB) published guidance on quantitative measures for liquidity management in institutions offering Islamic financial services. This note set three main characteristics of high quality liquid assets (HQLA): low correlation with risky assets, an active and sizable market, and low volatility.

Japan is the latest global financial hub to start making inroads into Islamic finance, a move that could help strengthen regional economic ties and give its lenders an edge in winning business in markets whose growth prospects far outpace their home turf. A regulatory effort is expected to facilitate development of the sector, and could even help Japan counter any loss of regional influence ahead of the launch of the China-led Asian Infrastructure Investment Bank. Japan's Financial Services Agency (FSA) is considering allowing banks to provide Islamic products in the domestic market for the first time.

The 95% Muslim Population of Kashmir among which pre-eminent section is far away from modern banking system because of its Ribah (Interest) meticulously verboten by Qur’an. Kashmiri business class also desire for an alternative banking system; here the preferable economic management is visible since the decades. Various federations should be designed for the micro establishment of Islamic banking in Kashmir by taking the examples of Kerala, Maharashtra and various other Micro-economic institutions running in the country. The Non-banking Finance Corporations, Investment Alternative Credits should be introduced for the economic deprived section of Kashmir.

New Left Project’s new e-book, "Alternatives to Capitalism: Proposals for a Democratic Economy" is now available for download. In it, the leading radical thinkers Robin Hahnel and Erik Olin Wright take on the crucial but all-too neglected question: what kind of society should we be fighting for instead of capitalism? Hahnel favours ‘participatory economics’. Wright advocates ‘real utopian socialism’. Alternatives to Capitalism puts these practical proposals through their paces in an in-depth, frank and extremely instructive debate about the central question of our time.

Gatehouse Bank plc ("Gatehouse") and Threadneedle Investments ("Threadneedle") have outlined their plans to explore the development of a range of diverse investment products aimed at the growing market segment of Islamic investors. This comes shortly after the announcement of Threadneedle's acquisition of a 2% strategic equity stake in Gatehouse. An important part of Threadneedle'sinvestment in Gatehouse is the desire of both parties to work together, sharing their respective global fund structuring knowledge and Shariah-compliant origination track record. This partnership recognises the growing potential for investment products targeting the Shariah-compliant financial sector.

Jadwa Investment has announced the acquisition of a majority stake in Saudi Mechanical Industries (SMI) by the Jadwa Mechanical Opportunities Fund along with Arab Petroleum Investments Corporation (Apicorp). The investment in SMI marks Jadwa’s eighth private equity deal. In 2014, Jadwa completed two major Tadawul listings with Abdulmohsen Al Hokair Group and Al Hammadi Company for Development and Investment, and a full exit via a trade sale with Gulf United Foods Company. Jadwa also announced in September 2014 the full acquisition of Global Environmental Management Services.

In this 21st century the importance of corporate learning for continuous professional development requires little explanation. However, these corporate learning courses through the traditional brick and mortar model are no more realistic most of the time. Virtual learning can help address these time and cost challenges with more impactful learning in most of the arenas of corporate learning and development. Online delivery of knowledge and skill is going to be the next big disruption in education, training, learning and development of professional skills in the corporate sector. The Massive Open Online Course (MOOC) phenomenon is having a significant impact on higher education - especially business education.

Prince Muhammad Al-Faisal, the pioneer of Islamic Banking, says that Islamic banking today is a baseless theory. Some think Islamic Banking represent Islamic Economy. But we must realize the difference between a) the financial services and b) the general economic theories controlling them, he adds. In our rush to provide Islamic financial tools, we concentrated on application without linking it to the main philosophy. We ended up with a system devoid of human values, he regrets. Today, the pioneer of Islamic banking, Prince Muhammad Al-Faisal, (79), stands alone in his search for an Islamic Economy theory. Muslim scholars and economists should join his pursuit. More than ever, the world needs a better economic system.

Global audit services firm KPMG has exclusively partnered with Hawkamah, the Institute for corporate governance, to establish the first Audit Committee Institute (ACI) in the UAE. The Audit Committee Institute (ACI) will provide information, resources and knowledge sharing opportunities, to help audit committee members, directors and senior management enhance the effectiveness, integrity and oversight of the financial reporting process in the UAE and the MENA region. The ACI will be open to audit committee members of private, public, and UAE government institutions.

Across the Gulf, companies that have traditionally used conventional finance are considering whether to "go Islamic", by conforming to sharia principles such as bans on interest payments and monetary speculation. The number of major firms taking the plunge is still small - a handful in the past six months - but they underline the growing depth and cost-effectiveness of Islamic finance after several years of rapid growth in the industry. Companies can face a range of incentives and pressures to adopt Islamic finance. Those include government efforts, social pressures or attractiveness to potential investors.

In a bid to accelerate the country’s economy, Bangladesh has launched a new interest-free financial instrument, highlighting the need for a strong Islamic Shari`ah board or council to operate and supervise the new instrument. Professor Mujahidul Islam, senior teacher and former chairman of the banking department of Dhaka University, said however, that this kind of bond was not popular with Islamic banks, financial institutions and people. He opined that this bond fund should be invested in power sector, water treatment plants and any other profitable and economically viable projects which contribute to the welfare of the country and accelerate the economy.

Arab Petroleum Investments Corp (APICORP) has signed a two-part sharia-compliant facility worth $950 million that it will use to finance investments in regional energy projects, it said in a statement on Sunday. The bulk of the financing consisted of a SAR3 billion ($800 million) Islamic loan of five years duration that was provided by five Saudi banks: Banque Saudi Fransi, National Commercial Bank, Riyad Bank, Samba Financial Group and Saudi British Bank. The remainder was provided on a three year basis by First Gulf Bank, HSBC and National Bank of Abu Dhabi , the statement added.

Family businesses must adapt faster, innovate sooner and become more professional in the way they run their operations if they are to remain successful. These are some of the findings of the second PwC survey of 44 family firms in the Middle East, titled The family factor: Professionalising the Middle Eastern family firm. Overall, this year’s survey indicates that family firms remain dynamic and resilient. Indeed, family businesses in the Middle East have been markedly more successful than their global counterparts. Middle East family businesses are also more ambitious in the medium term. The report can be downloaded at www.pwc.com/familybusinesssurvey.

The decision of State Bank of India (SBI) to put off the launch of a Shariah-compliant equity mutual fund has once again sparked debates on whether India should open doors to the concept of Islamic finance and facilitate a market for Shariah compliant financial products. The fund was designed to invest in Shariah compliant companies. Dinesh Kumar Khara, managing director and CEO of SBI Mutual Fund, said that SBI’s decision to defer the fund launch, originally planned in December, was a commercial call. On the other hand, Congress' member K Rahman Khan said in Parliament that the decision was due to political intervention.

Russian lawmakers have introduced to parliament a draft bill to support Islamic finance, aiming to attract capital inflows at a time when an economic slowdown is intensifying and Western sanctions show no sign of being lifted. The draft law, sent to parliament's lower house, the State Duma, this week, proposes allowing banks to engage in trade activities, a concept central to many of the structures used in sharia-compliant financial products. While many other obstacles remain, the bill is seen a first step to spur development of the sector. The draft law must pass three readings in the Duma before it moves to the upper house and then to President Vladimir Putin's desk to be signed into law.

Nigeria and Ivory Coast are looking to emulate Senegal's successful move into the market for Islamic bonds, Khaled Al-Aboodi, head of the Islamic Corporation for the Development of the Private Sector (ICD), said. The ICD helped arrange Senegal's debut 100 billion CFA francs ($208 million) Islamic bond, also known as sukuk, last June. Al-Aboodi added they were exploring with Nigeria and Ivory Coast. The issuance by Senegal has opened up the whole region, he said. The ICD hopes to support at least two countries in 2015 to issue a sukuk. Meanwhile, Niger has signed up for a sukuk programme worth 150 billion CFA francs ($260 million), although the timing has yet to be determined.

The High Sharia Supervisory Authority held its inaugural meeting at the Central Bank of Oman HQ in Muscat with Sheikh Dr Kahlan bin Nabhan Al Kharoosi, Sheikh Dr Abdullatif bin Mahmood Al Mahmood, Dr Said Bouheraoua, Ahmed Suhaimi bin Yahya and Dr Yaqoob bin Mohammed Al Waily in attendance. The formation of the High Sharia Supervisory Authority is considered pivotal to the CBO's efforts to introduce Islamic banking to Oman in a way that is likely to match demand. Both standalone Islamic banks as well as Shari’ah compliant windows are allows in Oman, unlike neighbouring Qatar.

More than US$718 million will be invested in roads, power generation, water supply, sanitation, agriculture and rural development projects in a number of countries after the Islamic Development Bank (IDB) approved a funding partnership with the Bill and Melinda Gates Foundation. The projects will be in Turkey, the Sultanate of Brunei, Uganda, Uzbekistan, Cote d'Ivoire and Benin. Technical assistance will also be given to projects in Bahrain. The first tranche of funds under the agreement will see $100m worth of grants issued before the end of this year. Operations are expected to begin in 2016.