IslamicFinance.de

Reserve Bank of India guidelines specifically state that banks are compulsorily required to charge an interest and pay taxes to the central government. However, the Muslim Fund Trust in Deoband headed by Haseeb Siddiqui is a financial institution that works on an interest-free loan module. The trust offers loans to only those who have a savings deposit account with them. Conventional banks demand security before issuing loans, which it has the option of falling back upon, in case the consumer defaults. The Muslim Fund Trust accepts only ornaments as security. Locals who avail the services of the Muslim Fund Trust identify Siddiqui as a social worker. Popularly known as Abbaji, Siddiqui has been politically active as a member of BSP. The trust neither has debit or credit cards, nor does it have netbanking facilities like other banks. The Muslim Fund Trust also runs an eye-care hospital, driver-training centre and an orphanage.

State Bank of Pakistan has been voted as the Best Central Bank in Promoting Islamic Finance by a poll conducted by International Finance News (IFN). The central bank has also won this award in 2015. In 2016, Pakistan was awarded Global Islamic Finance Award (Advocacy Award) by Edbiz Consulting Limited, UK. This recognizes the dedication and commitment of State Bank of Pakistan for laying the foundations for the sustainable growth of Islamic finance. In September 2017, the share of Islamic banking stood at 11.9% in terms of assets, while in terms of deposits its share is 13.7% with a network of 2,368 branches across the country.

Affin Hwang Asset Management has launched the TradePlus Shariah Gold Tracker (GOLDETF MK) on Bursa Malaysia, the first commodity-tracking ETF listed in Malaysia. The fund provides investors with exposure to gold through a shariah-compliant investment structure. The fund tracks the LBMA Gold Price AM Index by investing in physical gold bars purchased from London Bullion Market Association-accredited refineries. Datuk Seri Tajuddin Atan, CEO of Bursa Malaysia, said this ETF would allow investors to buy and sell gold in the same manner as trading shares on Bursa Malaysia. The government of Malaysia has also announced that ETFs traded on Bursa Malaysia will be exempted from stamp duty starting from 1 January 2018. GOLDETF’s annual fees (including management, trustee and custody fees) is 0.76%.

The Bank of Tokyo-Mitsubishi UFJ has provided an Islamic syndicated loan to the Malaysian affiliate of Saudi Telecom. The ringgit-based loan amount is about 41.7 billion yen ($353 million). BTMU is the first Japanese bank to act as an agent bank for a syndicated loan in Malaysia. The loan will be provided with HSBC and Standard Chartered Bank of the U.K. Japanese banks in Malaysia mostly provide loans to Japanese companies operating in the country. Now, BTMU aims to expand operations in the country through Islamic finance. BTMU has extended foreign-currency Islamic loans in Malaysia since 2008 and ringgit-based Islamic loans since 2014. The ratio of Islamic finance to total loans in Malaysia rose to about 30% at the end of 2017, from 17% at the end of 2009.

Saudi Telecom Co (STC) has obtained a 1.51 billion ringgit (US$378.5 million) Islamic loan through its Malaysian subsidiary. The company will use the Islamic loan to refinance existing debt originally used to acquire a stake in Malaysian mobile-phone firm Maxis. STC Malaysia Holdings hired Bank of Tokyo-Mitsubishi UFJ (Malaysia), HSBC Amanah Malaysia and Standard Chartered Bank Saadiq to arrange the deal. The syndicated financing uses a sharia-compliant structure known as commodity murabaha. Bank of Tokyo-Mitsubishi UFJ (Malaysia) will act as the investment agent to manage the cash flows of the facility and to execute the commodity murabaha transactions.

The Royal Award for Islamic Finance is on a global search for an exceptional individual in the field of Islamic finance. The biennial award is spearheaded by Bank Negara Malaysia and the Securities Commission Malaysia. It recognises Islamic finance visionaries who contribute significantly to the growth of Islamic finance. The award recipient is selected by an independent seven-member international jury chaired by Tun Musa Hitam. The most recent recipient of the Royal Award for Islamic Finance in 2016 was Prof Datuk Dr Rifaat Ahmed Abdel Karim. He was instrumental in founding the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). The closing date for nominations is March 31, 2018, and interested persons can submit their nominations online.

Akkas Uddin Mollah has recently been elected chairman of Shahjalal Islami Bank. The election took place at the 259th meeting of the bank's board of directors in its head office in Dhaka. The meeting also reelected Khandoker Sakib Ahmed and Mohammed Golam Quddus as vice chairmen. Mollah is the chairman of Osman Memorial Hospital and Russel Spinning Mills. Ahmed is the managing director of Zuairia Group, while Quddus is a director of the bank representing Anwer Khan Modern Hospital.

The largest seminary in #India, Darul Uloom Deoband, has issued a fatwa asking Muslim women to not marry into a family whose members work in banks. Deoband argued that the income from banking jobs is considered haram (forbidden) earnings. The edict was pronounced after a person asked Darul Ifta if he should marry his daughter to a man whose father worked in a bank. The Islamic scholars have upheld the fatwa, contending that the religious body’s stand was in line with the Islamic law. Islamic researcher Maulana Nadimul Vajdi said that if a person, knowingly or unknowingly, has indulged in haram earning, the person concerned should quit the job and find another one in which the income was not considered forbidden under the Islamic law.

The World’s oldest Islamic bank has strengthened its leadership to provide sharia-compliant products and services to an even broader market. Simpler, better, faster. These three key words form the cornerstone of a strategy that is seen to propel Kuwait Finance House Malaysia from its present level to a stronger position in the region. Thanks to fundamental adjustments that demonstrate efforts of Kuwait Finance House to grow its Malaysian subsidiary, the outlook for KFH Malaysia has never been better. “After making changes to the management structure in Kuwait, we came to bring the Malaysia arm in line with the group and to make sure that we drive forward to become the dominant player in Southeast Asia,” CEO David Power said.
Groomed as the regional hub for KFH in the Far East, KFH Malaysia had 18 vacant management positions when Power took over. Within a short period, he took steps to make sure that the bank had the right people on board who could assess the problems and come up with short-, medium- and long-term solutions.

Malaysia’s Islamic finance industry has grown tremendously since 2004, when Bank Negara Malaysia began issuing Islamic banking licenses to foreign Islamic banks. The strong growth is also reflected in the country's Islamic asset management industry, with Malaysia accounting for 34% of the US$78 billion global Islamic assets under management as at the end of 2016. Malaysia strongly believes that Islamic finance must continue to appeal to the broader community.

Malaysian Rating Corporation (MARC) has assigned a preliminary rating of AAA with a stable outlook to CIMB Islamic Bank's proposed RM10 billion senior Sukuk Wakalah Programme. MARC said the sukuk wakalah would provide an additional platform to raise liquidity for the bank should it need to strengthen its funding base. The rating agency added that the bank would be able to utilise its existing Basel III Tier-2 Junior Sukuk Programme to support its capital position when required. CIMB Islamic’s existing sukuk issuances, rated and affirmed by MARC with a stable outlook are as follows: an RM5 billion Tier 2 Junior Sukuk programme at AA+IS and its RM2 billion Tier 2 Junior Sukuk programme at AA+IS.

Malaysia’s stock exchange (BMSC) has launched a framework for Islamic stock lending. The introduction of Islamic stock lending aims to provide a Shariah-compliant alternative to the securities borrowing and lending negotiated transaction framework (ISSBNT). According to Bursa Malaysia, Islamic stock lending will provide a more facilitative trading environment and improve trading liquidity. Any person approved by BMSC to be an approved supplier may enter sell its own securities. An approved user is required to have a minimum of RM 50 million (USD 12.2 million) in shareholders funds. Initially, close attention will be given to extending Islamic exchange traded funds in particular, as well as enhancing levels of liquidity.

Islamic banks have been urged to adopt a strategy to make effective use of financial technology. At a seminar held recently, Ahmed Ali Siddiqui, director of Centre for Excellence in Islamic Finance at IBA, said there has to be a strategy for Islamic finance in the digital world. According to fintech expert Ashar Nazim, Pakistan is doing well in Islamic finance, but the country's finance industry has to adapt to fintech. Market Link Executive Director Ishan Kanji said that using fintech will support the agricultural sector by providing easy access of loans and facilities to farmers. He stressed on the need to tap into the informal economy, which is twice the size of formal economy in Pakistan. At the seminar Hasan Bilgrami, CEO of BankIslami, shared the success story of BankIslami being the first bank in Pakistan to use biometric technology.

According to Sultan Nazrin Muizzuddin Shah, Islamic finance has a variety of social finance tools which can be used to increase funds and mobilise donations from a diverse range of sources. Through zakat, sadaqah and waqf, Islamic finance enshrines sustainability, responsibility and generosity. The International Federation of Red Cross and Red Crescent Societies (IFRC) is now looking to the tools of Islamic finance for humanitarian funding. The United Nations’s Sustainable Development Goals (SDGs) are also concerned with protecting the planet and conserving the environment. Malaysia has paved the way for green sukuk and this may become the catalyst for further responsible investments all over the world.

An international workshop on "Enhancing the poor’s capability and financial inclusion from Islamic perspective" took place in Islamabad, Pakistan. On the first day, experts discussed the role of Islamic micro-finance in socio-economic development and economic empowerment of women. President of the International Islamic University Islamabad (IIUI), Dr Ahmed Yousif said Islamic financial institutions would have to play their role as objectives of value orientation. He called upon the Muslim world to stay united and include Islamic teachings in the economic system. Dr Atiq-uz-Zafar, director general of the International Institute of Islamic Economics of the IIUI, said that the session of the workshop would also include detailed research papers of the experts. The workshop will conclude today at Faisal Mosque campus.

According to CIMB Islamic Bank CEO Rafe Haneef, Muslim countries and customers with such affinity should tap into the green sukuk market, given the estimated US$45 trillion demand for such assets. He added that green sukuk, was very much part and parcel of shariah compliance, which should be halal and sustainable. In the context of global sukuk, the total size per year is about US$45 billion to US$50 billion, so green bonds are already five times the size of sukuk. RAM Rating Services deputy CEO Promod Dass said there was US$3 trillion worth of green investment needs in Asean from 2015 to 2030. Maybank Group global banking head Datuk Muzaffar Hisham opined Malaysia was in the right direction of participating in the green sukuk sector. He added that appetite for green investment was growing, the only question remaining was how to accelerate it.

Bursa Malaysia launched the first Shariah-compliant alternative to the Securities Borrowing and Lending Negotiated Transaction (SBLNT) framework, called Islamic Securities Selling and Buying Negotiated Transaction (ISSBNT). The new ISSBNT framework is based on the SBLNT model and is expected to provide a more facilitative trading environment for securities. Bursa Malaysia CEO Datuk Seri Tajuddin Atan said market participants would now have an alternative avenue which is compliant with Shariah principles. The model was chosen because it is more widely used by the market due to its flexibility. Tajuddin noted that ISSBNT is expected to bring an uplift of around 5 to 10% growth in funds transaction in the next 12 months.

From January 1, Indonesia is introducing a ban on crypto coins as payment options. The Indonesian government wants to ban forms of payment processing and make payment processing available only by owning a banking license. Such moves show how governments could crack down on crypto coins, while being generally accepting of fintech payment systems, even going as far as licensing them. Indonesia recognizes fintech firms as those providing payment systems, market support, investment management or risk management, P2P lending, financing providers and other financial services. All new fintech products in Indonesia would be tested in a sandbox environment before receiving a license.

#Malaysian real estate developer SkyWorld is raising some RM50mil under tranche one of the RM600mil sukuk musharakah programme for its SkyAwani Residence development in Kuala Lumpur. The novel sukuk transaction is the first securitisation of progress billings combined with affordable housing. RAM Ratings Services has assigned a preliminary AA3/stable rating for the sukuk, while Danajamin Nasional is guaranteeing the support facilities. Developed, arranged and advised by NewParadigm Capital Markets, the project has achieved 100% sales. According to NewParadigm executive director Danny Kwan, the primary objective of this financial programme is to monetise the unbilled sales upfront rather than later. It provides for more efficient cashflow management for the residential developer.

Chinese state-owned bank the Industrial and Commercial Bank of China (ICBC) has become the first Chinese bank to help arrange a dollar based sukuk. ICBC helped arrange Pakistan’s recent $1 billion 5 year Sukuk. Pakistan raised over $8 billion for its dual issuance of sukuk and a conventional Eurobond of $1.5 billion. China is building stronger trade ties with Asian countries under its "One Belt, One Road" strategy to rebuild Silk Road trade links with Asia and Europe. Additionally, the China–Pakistan Economic Corridor (CPEC) is a collection of infrastructure projects that are currently under construction throughout Pakistan. The value of CPEC projects is worth $62 billion and provides China with a vital route to the Arabian Sea for trade routes to the Middle East, Africa and Europe.