IslamicFinance.de

Attijariwafa Bank, one of the biggest banks in North Africa, will boost its Islamic subsidiary as soon as the Islamic finance bill passes parliament. Morocco's parliament has started to discuss a bill regulating Islamic banks and sukuk issues after months of delays, after the Islamist-led government adopted it last month. Parliament's approval will be the last step before fully-fledged Islamic banks can be established in Morocco. However, a revolution in the Moroccan banking sector is not expected since the market is very competitive, and Moroccans are too sensitive to product prices. Islamic finance banks are called participative banks under the Moroccan legislation.

A significant number of family offices (FOs) of wealthy Middle Eastern patriarchs are looking for suitable investment opportunities while fund managers are seeking to raise capital from this potentially lucrative market. A number of FOs (both Muslim and non-Muslim) have been instructed by their clients to allocate money to investment funds which generally bode well within the context of Shariah principles. Middle Eastern FOs or other direct investors also increasingly demand quality and timely service provision. Therefore, many FOs are interested in Guernsey as a place to allocate investments. On the other hand, the attraction of Guernsey for the fund managers is that it can provide a European platform which is not actually in the EU and therefore can offer flexibility and proportionality.

Bahrain-based Gulf Finance House (GFH) has announced the signing of two development agreements for real estate development in India. The flagship investment of GFH in India is the Energy City and Mumbai IT & Telecom City (India Project) developments in New Mumbai, the agreement of which was signed with Wadhwa Group. The second agreement was agreed with Adani Infrastructure & Developers , to explore development opportunities in relation to various infrastructure and real estate projects in India. Adani Infrastructure & Developers will be partnering with Asiastar City Holdings to develop the Phase 2 of GFH’s India Project.

Saudi investment bank NCB Capital has appointed Sarah Al-Suhaimi as CEO and member of the board subject to CMA approval. Tariq Linjawi, who had been acting CEO, is leaving the firm having successfully managed the organization through a transition period. Al-Suhaimi joins, following CMA approval, from Jadwa Investment where she was head of asset management and CIO, managing over SR17 billion of assets in public and private equity, real estate and fixed income. Sarah is the vice chairperson of the advisory committee to the CMA and is a graduate of King Saud University, with a Bachelor of Administrative Science degree in accounting.

The need for large investment in infrastructure – roads, railways, ports and housing – offers opportunities for Islamic finance, notably in Asia and emerging markets in general. However, Islamic finance needs an appropriate supervisory framework, and legislation is often the first step towards opening a new market. The market’s growth is driven by three factors: First, it is becoming part of normal retail and corporate banking in core Islamic countries, such as Saudi Arabia. Second, its growth appeals to other markets, particularly in the Muslim world. The third driver is innovation. Looking forward, the Islamic Economy is developing quickly. As consumption drives increased trade and economic links and the Islamic economy grows, new opportunities will require financing.

Kenya's financial regulator has proposed a separate regulatory framework for Islamic financial institutions as part of a broad ten-year strategy designed to boost capital markets. A draft of the strategy was circulated early this year and the plan is now in its final stages of preparation. It aims to promote more sophisticated financial services in Kenya. In the short term, the CMA plans to create a regulatory framework of its own for Islamic capital markets, focusing on corporate governance, information disclosure, a policyholder compensation fund and responsible pricing. In the long term, however, the CMA would engage the central bank and national Treasury to develop a separate policy, legislative and regulatory framework for Islamic finance.

The investment management firm Lotus Capital Limited has been honoured as the best in Africa by the Islamic Finance News (IFN). Lotus Capital won the Africa Deal of the Year Award as the lead issuing house for the N11.4 billion Osun state sukuk issue, which was listed on the Nigerian Stock Exchange (NSE) in September 2013. The issue was oversubscribed by about 20 per cent. The Osun state government, represented by the Honourable Commissioner of Finance, and the Solicitors to the Issue, Kola Awodein and Co, were also award recipients for the deal. Besides, Lotus also developed the country's first Islamic Index on the NSE, known as the “NSE Lotus Islamic Index” or NSE LII. The Index recorded +44.21 per cent in 2012 and +61.84 per cent in 2013.

Since sharia boards tend to be paid by the institutions whose activities they oversee, the scholars can be open to accusations of conflicts of interest. That's why Bahrain’s Waqf Fund has proposed mandatory external sharia audits for Islamic financial institutions. While the proposal is for Bahrain, it may have an impact on Islamic finance globally because of Bahrain’s central role in the industry. The proposal also ties in with growing pressure for reforms to the sharia oversight system in other countries, like Kuwait. The Waqf Fund will develop a framework for external sharia audits with a team of audit firms, scholars and the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

Growing demand for more sophisticated financial products and services helped drive growth in Bahrain's financial sector during last year, according to the Economic Development Board (EDB) and Central Bank of Bahrain (CBB). Bahrain attracted a number of businesses, with the number of registered financial services firms swelling to 415 by the end of the year. Alongside strong growth last year, the kingdom also developed a number of reforms to ensure that the regulatory framework of the Islamic banking sector continues to meet the needs and encourage long-term growth. Moreover, the CBB also recently implemented new rules set to boost the takaful sector by addressing some issues around solvency. Bahrain also had one of the most developed Islamic finance knowledge landscape, and performed well in terms of governance.

In 2007, Selangor Menteri Besar Khalid Ibrahim initiated a suit against Bank Islam seeking damages from the bank for alleged wrongful sale of his shares in Guthrie. Bank Islam then filed a counter suit to recover RM66.67 million claiming that Khalid’s failure to repay his loan. Twice the High Court ordered Khalid to pay the RM66.67 million in summary judgments obtained by Bank Islam. And then this year, Bank Islam withdrew its legal challenge to recover the RM66.67 million from Khalid to allow for an out of court settlement. Among the questions being raised is how Khalid has managed to get Bank Islam to agree to an out-of-court settlement. A point to note is that negotiations for the settlement are still in progress with a decision expected to be announced shortly.

Saudi Arabia's government plans to sell a 15 percent stake in National Commercial Bank (NCB) in an initial public offer. Finance Minister Ibrahim Alassaf said the IPO plan would be submitted to the market regulator in the third quarter of this year. Sovereign fund Public Investment Fund will be the seller. The fund, which currently owns most of NCB, will also sell an additional 10 percent stake to the government's Public Pension Agency. The pricing of the IPO was not discussed but it is likely to be one of Saudi Arabia's biggest. Until now, direct foreign investment is not allowed in Saudi's stock market. Authorities are preparing to open the market but it is not clear when this will happen.

India's Ministry of Minority Affairs has enlisted a Kuala Lumpur-based body to help develop Islamic endowments, or awqaf, aiming to mobilise a large pool of assets in the country. India, with an estimated 177 million Muslims, has a large base of awqaf but many of their assets are far from being employed efficiently; their estimated annual income is just 1.63 billion rupees. Last month, Indian Prime Minister Manmohan Singh inaugurated the National Wakaf Development Corporation, to help management of the properties become more transparent. Efforts to strengthen India's awqaf could conceivably be a precursor to developing an Islamic banking sector in the country. However, its secular laws still largely forbid the selling of sharia-compliant banking.

India's Ministry of Minority Affairs has enlisted a Kuala Lumpur-based body to help develop Islamic endowments, or awqaf, aiming to mobilise a large pool of assets in the country. India, with an estimated 177 million Muslims, has a large base of awqaf but many of their assets are far from being employed efficiently; their estimated annual income is just 1.63 billion rupees ($26.3 million). The World Islamic Economic Forum Foundation will hold a roundtable later this year to discuss ways to improve management of India's estimated 490,000 waqf properties. However, efforts to strengthen Islamic finance in India have in the past met strong opposition from bureaucrats in the finance ministry and banking circles.

he High Court fixed case management on March 18 to allow possible settlement between Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim and Bank Islam Malaysia over two suits linked to a RM66.67 million loan to purchase Guthrie shares 13 years ago. According to Khalid's counsel S. Selvarajah, his client and Bank Islam are seeking to reach a global settlement over the matter. In 2007, Khalid had filed a suit against the bank to seek a declaration that the Al-Bai Bithaman Ajil(BBA) facility entered between them in 2001 was null and void. Khalid also sought a declaration that Bank Islam had breached the collateral contract and the BBA facility. Bank Islam then countersued Khalid, claiming that Khalid had breached its contract in the loan agreement over his purchase of the Guthrie shares.

Growth in Asia’s foreign-currency sukuk issuance is being hindered by capital controls, leaving the Persian Gulf dominating a market that exceeded $17 billion in the past two years. Malaysia’s central bank requires local companies seeking to sell overseas bonds to show a legitimate funding need to reduce currency speculation. In Indonesia, corporations must supply information on the potential foreign-exchange risk, whether they intend to hedge, as well as their dollar and rupiah cash flows under rules put in place by the Financial Services Authority in 2002. This is because Malaysia and Indonesia want to protect their reputation and ensure that issuers won’t default on foreign-currency debt.

Building a start-up as an observant Muslim in Philadelphia presents unique challenges, from identifying financial practices acceptable under sharia law to deciding whether and how to compromise on selling forbidden wares such as pork, lottery tickets, and alcohol. But it also presents unique opportunities. Among them could be a market for the region's first Muslim credit union. The U.S. lags far behind other countries when it comes to the Islamic-finance sector. Only a handful of American banks have begun offering sharia-compliant home mortgages. A credit union could assist with many of the financial needs of Muslims in the USA.

State Bank of Pakistan and other banks engaged in Islamic Banking have sought media support in mobilizing and inclusion of more people from all sections of the society in the source banking system, especially the agriculture, micro-finance and housing sectors.. In order to create awareness and better understanding among the media people, a two-day workshop on 'Islamic Banking' has been organised for them. The Director of SBP's Islamic Banking Department, Saleemullah, said the print and electronic media is the best tool for opinion making and mobilizing the people towards Islamic banking, Besides establishing riba-free economy, however, the corruption in the society must end. Otherwise, the poverty can not be eliminated.

After the suspension of the Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, a report of the Financial Reporting Council of Nigeria was published. The council also advised the President to cause the CBN Governor to cease from holding that office.

The link shows the details of the accusations, which came after the Governor accused the national oil company of USD 20 bn fraud.

The Islamic Corporation for the Development of the Private Sector (ICD) has celebrated the completion of the First Cohort of its Islamic Finance Talent Development Program (IFTDP) last week. The IFTDP has been designed for mid-career professionals who possess prodigious leadership competencies. Its sole objective is to build up a pool of highly talented Islamic finance executives who are capable of leading the Islamic finance industry in the future. The IFTDP for experience professional has a rotational program that includes three eight-month assignments in an IDB Group sub-business and a comprehensive in-residence global training curriculum over the course of two years. The classroom training will lead to the Certified Islamic Finance Professional (CIFP) qualification, awarded by INCEIF.

Most critics of Sanusi start with the idea that the Nigerian Central Bank had over-reached its mandate. Although they are probably right, his activities must be applauded in a country where institutional failure has reached epic proportions. Sanusi has been a clear promoter of industrial policy for many years. His passion for tackling the oil sector corruption started on day one of his job. In parse ing through the bad debts that had been run up by the banks, he saw the cancer of the fuel subsidy racket. He didn’t flinch in taking on the banks, he didn’t flinch in taking on the fuel subsidy cabal, he didn’t flinch in taking on the power cabal, he didn’t flinch in taking on the NNPC. Is he a one-man anti-corruption agency – of course not. But if not him, then who? Nigeria is about to find out.