IslamicFinance.de

The Malaysian unit of Kuwait Finance House, the Gulf state's top Islamic lender, will cut its bad loans to the industry average within 5 years as it finances stronger names, its chief said on Thursday.

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) will seek a mandate from its trustees to examine the degree of sharia financial products' compliance with its 40 standards, its secretary-general, Mohamad Nedal Alchaar, said according to Liau Y-Sing from Reuters.

Lack of common standards makes it difficult to sell products across borders, while possibly enhancing innovation.

Liau Y-Sing reported via Reuters on 4 March that Mohd Daud Bakar, a renown Malaysian Sharia scholar, says banks may charge fees for guarantees but cannot sell the risk to a third party.

Liau Y-Sing reported on 23 January that the largest Islamic bank is announced to be launched in June operating out of Bahrain with a paid up capital of USD 11 bn; the Islamic Development Bank being the largest shareholder according to Sheikh Saleh Abdullah Kamel, chairman of the General Council of Islamic Banks and Financial Institutions. The bank, which has yet to be formally named, has been in the pipeline for several years and is currently undergoing final review by IDB on its capital input. While a total of $1 billion will be raised by private investors, including IDB, the other $10 billion is expected to come from an IPO on the Bahrain stock exchange, Sheikh Saleh Abdulla Kamel is cited.