Posts Tagged ‘Islamic Finance’
Islamic Banking System Must Become Strong Financial Model, Says Don
Points of Essence:
- Islamic finance should find its own niche model by not emulating the conventional banking concept. This will gain the trust which has apparently been shattered by the conventional financial system meltdown. The time has come for the Islamic financial system to dictate the international financial landscape. But it must unleash its full potential to win the confidence of the financial community. Bernama has the report.
KUALA LUMPUR, April 10 (Bernama) — The Islamic banking system must emerge as a strong financial model that need not rely on conventional banking, says University of New Orleans director Prof Dr M. Kabir Hassan.
He said many of the Islamic banks in the world did not understand thoroughly the Islamic banking concept.
“To make it a financial system supported by all communities, the authorities or bank managements must find the sources and new alternatives.
Read the rest of this entry »
Three-Tier Banking Needed To Strengthen Islamic Banking
Points of Essence:
- Islamic banking is urged to operate on a three tier system. First tier is to mirror the operation of conventional bank as a deposit taking institution. The second tier is to leverage on the Mudharabah mode company where banks will act as fund providers. The third tier will be to act as a partner in Musyarakah type of transactions. The appropriate regulations will be modeled to accommodate the three tiers rather than one regulation fits all as of the conventional system. Bernama has the report.
KUALA LUMPUR, April 6 (Bernama) — A three-tier banking system is needed in Islamic banking to further strengthen the industry, an economist suggested.
Read the rest of this entry »
No frills airline AirAsia turn to Islamic finance for aircraft financing
Points of Essence:
- Unperturbed by the prevailing credit crunch, Air Asia, the largest Asia’s low cost airline continues with its expansion plans. It found support in the Islamic finance as it sought US$336mil (RM1.21bil) in the form of syariah-compliant French Single Investor Ijarah facility to fund the purchase of 8 new aircraft. The Ijarah facility features RHB Islamic Bank Bhd and Bank Rakyat as two of the arrangers. The French based BNP Paribas and Natixis Transport Finance are the lead arrangers. The first of its kind deal, the Islamic French-Malaysian transaction marks the venture of Malaysian financial institutions in the business of aircraft financing which may further stimulate the promotion of Malaysia as the hub of Islamic financing. The Star has the story.
By CECILIA KOK
JUST when it seems almost impossible for airlines to obtain financing to buy aircraft these days, given the prevailing credit crunch, AirAsia Bhd has once again defied market trend.
The budget airline has announced some major financing deals that it has secured for the 2009 and 2010 deliveries of its aircraft order since late last year. These include the US$336mil (RM1.21bil) syariah-compliant French Single Investor Ijarah facility, whose lead arrangers are BNP Paribas and Natixis Transport Finance, for the purchase of up to eight new aircraft; and a deal with Barclays Capital – the investment banking division of UK-based Barclays plc – to finance the purchase of 15 new planes worth US$700mil (RM2.5bil) for delivery up to early next year.
Malaysia: Islamic Banking Should Be Most Important Agenda For Government
Points of Essence:
- The Government is urged to tap Islamic banking as an energy capacity tool in future. With the current pool of the talents in the area, the agenda will be seamlessly carried out. But it is cautioned against the advances of other countries in promoting Islamic finance which may overshadow the Government’s existing accomplishments. Bernama has the report.
KUALA LUMPUR, March 27 (Bernama) — The government is urged to make Islamic banking as one of the most important agendas in efforts to build energy capacity in future.
The representative from the Pahang Umno Liaison Body, Amiruddin Mohd Said, who made the proposal when tabling the motion on economy at the Umno general assembly 2008, here today, said Malaysia had the expertise needed to realise the agenda.
Read the rest of this entry »
Bahrain Islamic Bank is named best in region
Points of Essence:
- Bahrain Islamic Bank won an award for the best Islamic institutional finance bank in the Gulf region from World Finance magazine. The award is for the bank’s overall performance and excellent reputation among its peers. The Gulf Daily News has the report.
MANAMA: Bahrain Islamic Bank (BisB) has been named the “Best Islamic Institutional Finance Bank in the Gulf region”, by World Finance magazine.
BNP Paribas aims for major Islamic business growth
Points of Essence:
- BNP Paribas plans to expand its Islamic financial business in two years’ time acommodate the growing demands from the Middle East.
by Cecilia Valente
BNP PARIBAS: Expectations remain high about growing Islamic business.
BNP Paribas Investment Partners, the French group’s fund management arm, plans to grow its Islamic business five-fold or more in the next two years, its Middle East head told Reuters on Monday.
Read the rest of this entry »
CBB to host workshops on financial standards
Points of Essence:
- Bahrain will host workshop on Islamic finance related standards issued by the Islamic Financial Services Board. Aimed at facilitating better implementation of the standards, the workshops will cover the issues of supervisory review process, risk management and corporate governance. Gulf Daily has the report.
MANAMA: The Central Bank of Bahrain is hosting the Islamic Financial Services Board – Facilitating the Implementation of Standards (IFSB-FIS) workshops.
KL seeks global standards on Islamic banking
Points of Essence:
- Malaysia advocates issuance of global standards for Islamic banking with a preliminary meeting to be held in Kuala Lumpur soon to discuss the initiative. The Star has the report.
DOHA (Qatar): Malaysia has proposed a meeting be held to set up global standards for Islamic banking and finance, Prime Minister Datuk Seri Abdullah Ahmad Badawi said.
Abdullah said he had discussed this with Qatar Prime Minister Sheikh Hamad Jassem Jabor Al-Thani during meetings yesterday and had proposed for the first meeting to be held in Kuala Lumpur.
Qatar Islamic Bank set for French move
Points of Essence:
- Qatar Islamic Bank will expand its wings to France with a licence in operating Islamic banking services is within sight. Together with another Gulf based lender, the banks will begin operation by end of 2009. Appropriate regulations are in tow to accomodate these new players in France. The Arabian Business has the report.
by: Stanley Carvalho
FRANCE: More Islamic banking services on the menu.
Qatar Islamic Bank and ‘another Gulf lender’ may be licensed to introduce Islamic banking services in France later this year, a member of a French banking delegation said on Wednesday.
“The regulations are ready and licences for at least these two banks are in an advanced stage. We expect the first Islamic bank to be set up before end of 2009,” said Gilles Saint Marc, a lawyer who was part of the delegation accompanying Christian Noyer, the head of the Bank of France, during a Gulf visit.
Read the rest of this entry »
Opportunities lurk in financial gloom
Points of Essence:
- Hong Kong sees every opportunity to come its way despite the worrying global financial meltdown. It sets to boost its financial hub status by going aggresively to woo Islamic finance players to the island city. Providing appropriate tax incentives to bolster growth of the newest industry, other institutional and regulatory framework will certainly guide Hong Kong to reach out to a larger Islamic financial community. The address of Hong Kong’s Chief Executive says it all.
Chief Executive Donald Tsang
The Asian Financial Forum was launched in 2007, partly to celebrate the 10th anniversary of Hong Kong’s reunification with the Mainland of China, and partly to address the challenges of a rapidly changing economic environment in Asia. At that time the sub-prime lending problem in the US was beginning to take hold, but no one could have predicted how deeply rooted the problem was or how quickly things would unravel in what some people like to describe as a “flat” world.
Groups to assess the performance of Islamic financial system
Points of Essence:
-
A Task Force has been set up in Kuala Lumpur to study the performance of the global Islamic financial system. The initiative moved by the Islamic Development Bank and driven by the Central Bank of Malaysia, the task force will deliver a report by September for proposals to enhance the resilience of the Islamic financial system. The Star has the report.
KUALA LUMPUR: The Task Force for Islamic Finance & Global Financial Stability has set up three working groups to assess the performance of the Islamic financial system amid the current financial crisis.
Debate over commodity murabahah
Points of Essence:
- It is not always rosy for Islamic financial products which often become subjects of differing views from Islamic scholars on their Shariah compliance. The newest product adopting the concept of commodity murabahah is of no exception. Initially introduced as a money market instrument, it has expanded to other spectrum of financial products. The trade elements tied to the product structure with pre-determined profit rate completing the backbone, commodity murabahah is generally accepted, albeit with caution.
- Even with one edict banning it claiming its similarity with with interest bearing elements and the other to condition it upon the numbers of contracting parties, this looks like the best bet we have so far as conceptual wise, it is globally accepted. Thus, until we find a better alternative, this product is here to stay. The Star has the report.
Some Islamic scholars think commodity murabahah should be avoided as much as possible, saying it closely resembles an interest-bearing transaction. Is there a better alternative financing structure?
THE concept of commodity murabahah (or tawarruq in some jurisdictions) has only recently been widely applied in Islamic finance, along with other syariah contracts such as mudarabah, musharaka and bai murabahah.
The application of this trade-related structure with a pre-determined profit rate (or pre-agreed “margin” or “mark-up”) is possible in syariah-compliant financing and deposit products as well as in liquidity management/treasury instruments and other investment products/securities.
However, resistance still exists on the ground from some critics who say that commodity murabahah-based financial products bear a striking resemblance to interest-based products.
Saudi Arabia: Alinma Bank set for launch in 2nd quarter
Points of Essence:
- Saudi Arabia is ready to launch its biggest bank, Alinma Bank at the end of the 2Q of 2009. Once in operation, the Shariah compliant bank will serve the entire Kingdom and leverage on the latest banking technology to reach out to its customers. Zawya.com has the report.
RIYADH: Final preparations are being made by Alinma Bank for its launch by the end of the second quarter of 2009, Abdulaziz Al-Zamil, chairman of the board of directors of the bank told newsmen here yesterday .
“At launch, the bank will operate branches in Riyadh, Jeddah, Dammam, Jubail, Hofuf, Madinah, Taif and Khamis Mushayt. Branch distribution is expected to continue through 2009 and into the early part of 2010 with location opening in cities such as Makkah, Alkhobar, Unaizah, Buraidah, Hail, Hafr Al-Batin, Arrar, Tabuk, Al-Mubarraz, Kharj and Al-Najran,” Al-Zamil said at a press conference held at the bank’s headquarters here yesterday.
Islamic Finance Looking Attractive in Korea
Points of Essence:
- A rather late starter, Seoul has finally found interest in Islamic finance. The hosting of an Islamic finance event in the country was an opening chapter to a larger activity of Islamic finance.
By Yoon Ja-young
Staff Reporter
Islamic finance could be a new alternative in overcoming the global financial crisis, a top financial regulator said indicated as the country is now making efforts to attract funds from oil-rich Islamic countries.
Kim Jong-chang FSS Governor
”Reckless distribution of complicated derivative products throughout the global market, detached from the real economy, put the global financial market into crisis,” said Financial Supervisory Service (FSS) Governor Kim Jong-chang at a seminar on Islamic finance held in downtown Seoul, Tuesday.
The annual seminar, held in Japan and Hong Kong in the last two years, is now under way in Seoul, jointly hosted by the Islamic Financial Services Board (IFSB), the Financial Services Commission (FSC) and the FSS.
Kim said Islamic finance, which allows only real financial transactions, could be the answer to the trouble caused by complicated and intangible derivative products.
The hosting of the seminar in Seoul reflects the country’s growing interest in attracting the abundant liquidity of the Islamic world and participating in the expanding market.
Malaysia needs to extend Islamic finance leadership
Points of Essence:
- In view of the stiff competition and growing interest in Islamic finance worldwide, Malaysia needs to reassess its talent scouting and retaining policy. Otherwise, it will lose out to other competitive markets. Bernama has the report.
Kuala Lumpur: Malaysia needs to rethink existing paradigm to solidify its leadership in the Islamic finance industry as more countries are jumping into the bandwagon.
“The race is on (in the Islamic finance sector). There is stiff competition from other financial centres,” Bank Negara Malaysia’s assistant governor Datuk Muhammad Ibrahim said Monday.
Islamic bank launched in Bahrain
Points of Essence:
- Bahrain has recently welcome the newly launched Capinnova Investment Bank, the Shariah compliant investment arm of BBK. Focusing to serve the GCC and MENA markets, the bank which core areas of business include private equity, asset management and corporate finance, will provide Shariah compliant investment products and services. This will strengthen Bahrain’s position as one of the main global drivers of Islamic finance.
By ARTHUR MACDONALD
MANAMA: Bahrain-based BBK has announced the launch of Capinnova Investment Bank, its new Sharia-compliant investment banking arm. A wholesale Islamic investment bank, Capinnova is licensed by the Central Bank of Bahrain and capitalised at $500 million with a fully paid-up capital of $125m.
“The growth of Islamic banking industry in particular has been remarkable in recent years and it is expected to reach $4 trillion in the next five years according to a recent Standard and Poor’s rating agency report,” said BBK chief executive officer and Capinnova Investment Bank chairman A Karim Bucheery, at the launch of the bank at the Ritz-Carlton Bahrain Hotel and Spa yesterday.
