Amman Muhammad

You can finance your home the Islamic way

In #SouthAfrica First National Bank (FNB) has been offering an Islamic home loan since the beginning of the year. The product is aimed at Muslims who want to finance their homes in a manner consistent with the requirements of their faith. But, like all Islamic financial products and services, it is open to everyone. FNB Islamic Banking’s home loan is not strictly a loan. It is modelled on what is known as a diminishing musharaka type of financial transaction. Amman Muhammad, the chief executive of FNB Islamic Banking, says the main advantage of the Islamic home loan is that it offers a competitive fixed-price deal in volatile economic conditions. Also offering Islamic residential property financing is the local arm of the international Al Baraka Bank.

The ins and outs of #IslamicFinance

In #South Africa First National Bank (FNB), Al Baraka and HBZ Bank are the only financial institutions offering Islamic banking services. These banks offer a range of Islamic cheque accounts, Islamic savings accounts and Islamic investment accounts as well as vehicle, property and asset finance. CEO of FNB Islamic Banking Amman Muhammad says the bank has seen a consistent rise in the number of South Africans taking up the bank’s transactional banking and investment, vehicle and property finance products irrespective of faith. Customers are looking for an alternative banking form and FNB can offer a principles-based approach. Muhammad says the normal regulatory and risk rules apply to all Islamic banking products.

FNB targets Islamic banking on continent

First National Bank (FNB) is looking to expand its Islamic banking offering to Zambia and Tanzania before the end of its financial year in June next year. FNB, which has been on an expansion phase in select countries in the rest of Africa, is looking to use the Islamic banking offering to capture clients, especially in those countries that have big Muslim communities. Amman Muhammad, the CEO of FNB Islamic Banking, said that in sub-Saharan Africa there were about 280-million Muslim people and the FirstRand group had a presence in countries that had about 200-million Muslims. The bank already offers Islamic banking in Botswana.

FNB hires new sharia committee

The Islamic division of South Africa's First National Bank has hired a new sharia advisory committee and aims to rebrand itself. The new committee consists of Aznan Hasan, Yusus Patel and Zaid Haspatel. According to the chief executive of the Islamic business, Amman Muhammad, they will no longer be called board, but “sharia advisory committee” and their role is clearly defined. He added that the new team would review the bank's previous sharia products. FNB's previous sharia board resigned last July after disagreements over the board's role when new management took charge of the división. Under the new structure, the committee will no longer play a role in the day-to-day running of the business, removing the potential for conflicts.

Absa Insurance purchases South Africa’s only Islamic insurer

Takafol will become part of Absa Islamic Banking and perform under the name Absa Takafol.
Amman Muhammad, Managing Director of Absa Islamic Banking, stated that Absa Takafol will look at the way they expand their service offering beyond banking and provide customers with an unparalleled Islamic value proposition.
It seems that the possible market for Takaful products in South Africa has been estimated at ZAR 3 billion ($412 million).

New Islamic tax laws ‘will spur investment’

NEW tax laws will level the playing field between Islamic banks and conventional banking, say banking and tax analysts. The new laws are intended to encourage foreign direct investment into SA, says Amman Muhammad, MD for Absa Islamic Banking. Islamic banking is in its infancy in SA. Albaraka Bank and the Islamic Bank were the first Islamic banks to be granted a licence by the Reserve Bank in the 1980s. The proposed amendments to the Income Tax Act take into account three different types of Islamic financing on which one can develop products. First , mudurabah, a form of deposit where the client invests with a bank and, the bank invests deposits in Sharia -compliant enterprises or products. Second , murabaha, which is a mark-up financing transaction offered by a bank so that a client can obtain financing for various assets, such as property and equipment. Third, diminishing musharaka, a partnership arrangement usually used for project financing. Mr Muhammad hopes that the implementation of a sovereign sukuk (Islamic bond) will be the next step by the government.

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