IslamicFinance.de

Iran's Chief Auditor Nasser Seraj announced that there is no truth to rumours that a death sentence issued in the so-called $3-billion fraud case will be withdrawn. Seraj indicated that the authorities are continuing to trace the assets of Amir Khosravi, adding that the investigation is proceeding well. The case came to light in 2011, and 39 defendants were accused of using forced documents to obtain credit from banks to buy state-owned companies. Four people were sentenced to death for the charge of "corruption on earth" including Amir Khosravi, and others were sentenced to prison terms of up to 25 years. Mohammad Reza Khavari was the CEO of the country's largest bank, Melli Bank, and he remains a major suspect in this case, having fled to Canada as soon as the investigation became public.

In Nigeria, the practice of Islamic finance was introduced in 1992 by the former Habib Bank (Bank PHB, and now Keystone Bank). The profile of this type of banking was again raised between 2008 and 2009 when Nigeria joined the Islamic Financial Services Board (IFSB). Later, the CBN issued framework dated January 13, 2011 to regulate Islamic finance in Nigeria. In July, 2011 the CBN granted licence to Stanbic IBTC Bank to operate an Islamic banking window and subsequently to Sterling Bank in 2013; the CBN had earlier granted approval for the establishment of Jaiz Bank to operate as the first full-fledged Islamic bank in Nigeria. In sum, for Nigeria to benefit from Islamic finance, the governing laws and regulations must be written and subject to interpretation and analysis.

After waging a legal battle with the regulator as well as conventional insurers for almost two years, Islamic insurance companies have finally agreed to an out-of-court settlement of the longstanding dispute over controversial Takaful Rules 2012. General and family Takaful companies will withdraw their constitutional petition against the SECP, 23 insurance companies and the federation of Pakistan within this week, thus allowing conventional insurers to run Shariah-compliant insurance business through parallel window operations. The SECP is said to have agreed to the Takaful players’ suggestion that conventional insurance companies should be required to maintain separate capital accounts for the two lines of business.

Limitless LLC, the Dubai-based developer, has reportedly asked creditors to defer the first installment on its $1.2 billion restructured debt until the end of 2015. The company has offered banks 200 million dirhams ($54 million) toward the $400 million amortization due in December. Limitless, which was put under the management of state-controlled developer Nakheel PJSC in 2010, has requested postponement of payment for a year. The company is revising business plans and will approach lenders about the debt maturing in 2014, its chairman Ali Rashid Lootah said. Options include sale of land in Jebel Ali, he added. Seemingly, the company reached an arrangement that would give lenders a profit rate equivalent to interest of 175 basis points over the London interbank offered rate and may extend payment by five years.

Turkiye Finans navigated challenging markets on Tuesday to price its $500m five year sukuk inside guidance at 5.375%. After what one investor termed a “sluggish” start, the deal achieved a $1.4bn order book and rallied from par on the break to 100.125/100.375. Turkiye launched as tensions mounted again between Russia and Ukraine. The Russia 4.875% ’23 bond has fallen three points since the start of the week and equity markets are down. Despite this, the Turkish participation bank tightened its guidance from 5.5% and almost doubled its book.

The Islamic Financial Services Board (IFSB) successfully organised the 6th IFSB Seminar on Legal Issues in the Islamic Financial Services Industry (IFSI), themed "Innovation in Sukuk Securitisation and Islamic Hedging Instruments: Developments and Challenges" on 25 March 2014 in Brunei Darussalam. This Seminar is a part of the IFSB seminar series on legal issues in the Islamic financial services industry. Speakers shared their insights on the legal challenges faced by asset securitisation and Sukuk structuring. Moreover, discussions focused on the need for establishing international standards governing transactions of Islamic hedging instruments in order to reduce the legal uncertainty. In the last session, speakers discussed the Shari`ah governance structure and the role of Shari`ah supervisory boards in assisting the innovation and development of these evolving markets.

Caretaker President Moncef Marzouki this week received presidents and directors of Islamic banks of West Africa. The meeting discussed ways to strengthen the national economy, boost investment and find ways to finance small and medium enterprises in Tunisia (SMEs). The President of the Republic on Monday commended the signature of a strategic draft agreement between the Zitouna Bank and the Islamic Development Bank (IDB) to create a specialised joint institution in Islamic micro-finance that would allow both partners to expand to Africa. He insisted on the need to speed up legal reforms in the finance field to allow Tunisian banks to integrate in Africa and overcome challenges. The IDB will contribute to the Tunisian government's programmes to meet the challenges of employment, fight against poverty and regional development.

With Islamic financing growing significantly in Kenya over the last five years and now accounting for 2% of the country's total banking industry, it's not surprising that Standard Charted chose Kenya as the first African nation in which to launch its Sadiq suite of Islamic banking products. Trade Finance caught up with Wasim Saifi, Standard Chartered's global head of Islamic banking, to find out what Islamic trade products it has planned for Kenya and why the bank sees Africa as the new growth frontier for the $1 trillion plus Islamic finance market.

Qatar-based Islamic Holding Group reported a net profit of QR2.96bn for the first quarter of 2014, up 40 percent compared to QR2.11bn in the corresponding period in 2013. Dr Yousef Ahmed Al Neamah, Chairman and Managing Director of the group, said during a meeting of the board of directors that these positive results are an indicator of growth potential. He added that there was a sense of optimism, especially at the Qatar Exchange. The group seeks to discover new opportunities for investment, achieving better growth and adequate return for the shareholders.

Baitul Mal Wa Tamwil (BMT) is a microfinance institution in Indonesia that is a shariah compliant. It aims to develop micro and small business enterprise for the poor and economically marginalized sector in the society. BMT is a small financing institution which operates using mixed concepts of "Baitul Maal" and "Baitul Tamwil" with its target focused on the small business sector. By this concept, BMT also acts as Zakah institutions (Amil). BMT has been in operation since 1995 under the supervision of Incubation Center of Small Business (PINBUK). Since its establishment in 1995, around three million customers have obtained micro-financing from BMTs in Indonesia. At present, the role of BMT as an Islamic microfinance institution has become increasingly important, particularly regarding poverty alleviation in Indonesia.

Morocco is set to give Islamic finance a second try, counting on closer regulation and a clearer legislative framework to resolve problems which plagued its first attempt in 2007. Morocco's parliament is considering a detailed bill that would regulate Islamic banks and issues of sukuk, and its passage - which could occur this year - is expected to prompt some Moroccan banks to establish dedicated sharia-compliant subsidiaries. Meanwhile, Morocco's central bank plans to set up a central sharia board to oversee the sector. Moroccan officials are also looking to develop Islamic finance in areas outside banking. Moreover, the ministry is studying the operations of real estate investment funds.

Abu Dhabi Islamic Bank PJSC (ADIB) is seeking to bring a boom in Shariah-compliant lending to the expatriate population in the UAE. ADIB agreed to buy the conventional retail assets of Barclays Plc (BARC) in the United Arab Emirates for 650 million dirhams ($177 million). The deal is the second of its kind for ADIB, which bought a stake in Egypt’s National Bank of Development in 2007. ADIB has been a corporate-focused bank so having a larger retail footprint will be positive for balancing it’s loan book. Barclays’s U.A.E. customers will notice a difference during the transition, even while they won’t experience any disruption.

UK Universities Minister David Willetts has launched a 12-week consultation period on Shari’ah compliant student loans with the aim of getting more Muslim students into higher education in the UK. The Department for Business, Innovation and Skills (BIS) has been developing a model alternative finance product which would be Shari’ah-compliant and could potentially be offered alongside traditional loans. This model finance product has been developed by experts in Sharia-compliant finance and has received preliminary approval from the Islamic Bank of Britain’s Sharia supervisory committee. The consultation seeks to determine whether the alternative finance model identified would be acceptable to anyone who might be deterred from the conventional system.

Morocco is set to give Islamic finance a second try, counting on closer regulation and a clearer legislative framework to resolve problems which plagued its first attempt in 2007. Morocco’s parliament is considering a detailed bill that would regulate Islamic banks and issues of sukuk, and its passage – which could occur this year – is expected to prompt some Moroccan banks to establish dedicated sharia-compliant subsidiaries. Meanwhile, Morocco’s central bank plans to set up a central sharia board to oversee the sector. In its current form, the proposed legislation appears to address the tax issue well. It provides for the use of special purpose vehicles (SPVs), while transfers of real estate between sukuk originators and SPVs would not face double taxation.

Al Baraka Bank Pakistan Ltd is the lead advisor and arranger of Rs 3 billion first Musharaka based Islamic transaction to Zaver Petroleum Corporation Limited. The signing ceremony took place in Islamabad. Present at the occasion were Saddruddin Hashwani, Chairman Hashoo Group, CEO Al Baraka Pakistan, Shafqaat Ahmed and representatives of the Zaver Group, Al Baraka and member banks of the consortium; United Bank, Askari Bank, Bank of Punjab, Dubai Islamic Bank and Burj Bank. This is Al Baraka's first step in providing value added services to major players in the oil and gas sector and more such transactions are expected in the future.

Statistical, Economic and Social Research & Training Centre for Islamic Countries (SESRIC) – OIC and AlHuda Centre of Islamic Banking and Economics (CIBE) have signed a Memorandum of Understanding (MoU) to provide trainings and Capacity Building services to the central banks of 57 member countries of the Organization of Islamic Conference (OIC). The main purpose of the initiative is to mould the expertise, scholastic ideas and international best practices according to international standards. The MoU was signed by Muhammad Zubair Mughal, Chief Executive Officer, AlHuda CIBE and Mr. Mehmet Fatih Serenli, Director, Training and Technical Cooperation, SESRIC - OIC. Muhammad Zubair Mughal, said that this relation will be extended to Islamic Microfinance, Halal tourism and other pertinent fields. Find more information in the attached file.

Ahmad Hamad Algosaibi & Brothers Co. invited creditors including BNP Paribas SA (BNP) and Standard Chartered Plc to discuss claims on $5.9 billion of debt as it seeks to recover from the Middle East’s biggest default. The Saudi Arabian company will outline proposals aimed at achieving a comprehensive settlement with more than 70 creditors at a May 7 meeting in Dubai. The company didn’t give further details on the proposed terms. Banks rejected an original debt restructuring proposal from Algosaibi four years ago. Algosaibi hired Simon Charlton, former head of forensic services in the Middle East for Deloitte LLP, as chief restructuring officer and Ben Jones, also from Deloitte, as chief financial officer last June to restructure its operations.

The Bank of England is studying ways to increase the number of Shariah-compliant assets that Islamic financial institutions can use in their liquidity buffers. Currently, sukuk issued by the AAA-rated Islamic Development Bank are the only assets that meet the central bank’s criteria for use in the liquidity buffers of the 22 Islamic financial institutions operating in Britain. In addition to reducing risks, expanding the eligible list could improve growth prospects for the industry and remove a potential entry barrier to the sector. The Bank of England’s proposal is in line with the approach of Basel III global banking regulations, which allow sukuk issued by high-rated sovereigns to be included in the liquid assets buffer without a haircut. Sukuk issued by sovereigns with lower credit ratings and other non-financial issuers could also be eligible, subject to haircuts and caps.

Sharia-compliant structures could help revive the securitisation market tarnished by the global financial crisis, providing a fresh source of funds for companies. Because Islamic finance shuns outright speculation it could offer the benefits of securitisation minus the weaknesses that led to the sub-prime mortgage crisis. While still at an early stage of development, the features of Islamic securitisation could help re-open a market that can fund a wide range of activities, including mortgages, car loans and working capital for businesses. Despite the sector's small size, several deals have proven the concept works, although existing legal and taxation issues have hindered greater transaction volume.

Prof. Abu Nasser Muhammad Abduz Zaher, Chairman, Board of Directors of Islami Bank Bangladesh Limited was re- elected as Chairman of Islamic Banks Consultative Forum (IBCF) while Md. Nazrul Islam Mazumder, Chairman of EXIM Bank and Badiur Rahman, Chairman of Al-Arafah Islami Bank were re- elected as Vice Chairmen of the Forum. The election for the year 2014 of IBCF was held recently at the Meeting Room of BAB's Office in the city.