International Business Times

#Malaysia 1MDB scandal: Prime minister's brother Nazir Razak cleared of wrongdoing by CIMB bank

Nazir Razak, the brother of Malaysian Prime Minister, Najib Razak, has been cleared of any wrongdoing by an independent investigation undertaken by CIMB Group. Nazir voluntarily took a leave of absence to allow an independent review to be carried out after it was revealed that he had transferred cash to the ruling coalition's politicians in the run-up to the Malaysian general elections in 2013. Although he admitted to transferring the money, Nazir insisted he did nothing illegal. Nazir has now resumed his role as CIMB Group chairman and CIMB Bank director.

Malaysia 1MDB Update: Bank Negara Malaysia Warned Government In 2014 About State Investment Fund’s Growing Debts

1MDB issued a statement Monday saying Abu Dhabi state-run fund International Petroleum Investment Corp. has failed to pay interest on $1.7 billion on the Malaysian fund's 2022 bonds. The Malaysian government was cautioned about risks associated with the debt-ridden fund in 2014. The state investment fund set up by Prime Minister Najib Razak, has been burdened with debt of over $12 million over the years and has been accused of mismanagement while facing corruption allegations. Apart from Malaysia, the 1MDB investigation is also underway in the United States, Luxembourg, Singapore, Switzerland, Hong Kong and Abu Dhabi.

Singapore Seizes Accounts Linked To 1MDB Malaysian Fund Controversy

Authorities in Singapore say they have seized a "large number" of bank accounts that various media have linked to a Malaysian government-run fund that stirred controversy around Prime Minister Najib Razak. While Singaporean authorities didn't confirm the link, the move comes days after Switzerland said it would submit evidence of illegal transactions to Malaysian authorities, asking them to help pursue the investigation. The developments come just before Najib and other Southeast Asian leaders hold a special summit with U.S. President Barack Obama in California this month. Obama is strengthening ties with the region to help counter China's growing assertiveness in the South China Sea and to tap the region's large and fast-growing economies.

Could Shariah-Compliant Banking Change The Finance World This Year?

The Shariah-compliant sector has grown to $1.6 trillion in assets over the past three decades. That's why Muslim and non-Muslim financiers from around the globe have noticed the growing investor pool with enough cash to make a serious impact. In Africa, a handful of countries have already laid the groundwork to enable Islamic banking, and some of London’s newest landmarks were built thanks to Shariah-compliant bonds. Other countries have also made forays into the sector. However, there's a general lack of understanding of what Shariah entails, particularly relative to the financial world. Given the fact that a large proportion of the populations in developing countries in the Middle East, South Asia and Africa will be looking for Shariah-friendly ways to finance their projects, the sector is likely to continue its growth.

Islamic Banking Revolution: Africa Is Seeing an Explosion In Banks Looking To Cash In On Continent's Growing Muslim Population

Shariah banking offers an opportunity for Africa's existing banks. In Kenya, the Gulf African Bank and the First Community Bank experienced exceptional growth. Standard Chartered said it would soon start offering Islamic banking products in Kenya. As African banks embrace Islamic practices, regulatory bodies are scrambling to issue Shariah-compliant policy statements and rules. Nigeria brought in new guidelines to help deal with sukuk and guidelines were established to deal with takaful. South Africa has rewritten its tax laws to ensure that Shariah-compliant products are more transparent. Uganda, Botswana and Zambia are also looking to make regulatory changes to grow their Islamic banking sectors.

Islamic Banks Could Be The Answer To America's Over-reliance On Credit And Risk

Islamic banking is a growing option in America as various Islamic banks pop up across the country to service those who wish to preserve Shari’aa law or those who just want to use an Islamic bank. The key to these Banks is the shared risk. If the financial models show that the borrower is making a bad investment, the bank will tell them that it’s a bad economic decision and it will not invest with them. The underlying message is that the borrower is in a partnership with the bank, so there are no hidden fees. This may be a much better and less risky model to consider that can get you on the property market with just a 5 percent deposit. Islamic bank also offer Islamic bank accounts. Money from demand and checking accounts cannot be used in lending, it’s considered a trust.

Q&A: Sir Iqbal Sacranie on Growth Of Islamic Finance in UK

The Islamic financial market has boomed over the last decade and is more than ever at the top of the agenda for sustainable growth and development. The world's most actively traded Islamic finance product is the Sukuk, which is becoming more and more accepted in non-Muslim countries.

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