AmTakaful Starts Family Takaful Business
Points of Essence
- Newest Takaful operator in Malaysia, AmFamily Takaful has commenced its family takaful business, making it the 12th licensee
- The business is a JV between AmBank Group and UK’s Friends Life Group
KUALA LUMPUR, Jan 9 (Bernama) — AmFamily Takaful Bhd (AmTakaful), the 12th licensed takaful operator in Malaysia, has commenced a family takaful business.
A joint venture company between AmBank Group and Friends Life Group of the UK, AmTakaful is registered as a takaful operator by Bank Negara Malaysia (BNM) to carry out a family takaful business with effect from Jan 9, 2012.
By combining the expertise of its shareholders AmBank Group and Friends Life Group, as well as Shariah principles and values, AmTakaful will be introducing a wide range of family takaful solutions to meet the evolving lifestyle needs of all Malaysians, it said in a statement.
Source: BERNAMA
HSBC Amanah To Issue Innovative Sukuk For Retail Investors
Points of Essence
- HSBC Amanah is mulling issuance of an innovative sukuk for retail investors this year
- The planned sukuk is intended to increase presence in the bond market by retail investors
- With 15 branches so far in Malaysia and leveraging on its global group, the bank is poised to grow its offering of Shariah compliant products.
By Dalila Abu Bakar
KUALA LUMPUR, Jan 10 (Bernama) — HSBC Amanah Malaysia Bhd, a subsidiary of HSBC Bank Malaysia, plans to introduce an innovative sukuk this year for retail investors to maintain HSBC’s position as a leading sukuk house.
“Malaysia is one of the deepest markets for Islamic bonds but we still do not have an active retail market.
“We need to launch a retail bond product so that the retail investors could share the sukuk pie,” chief executive officer Rafe Haneef told Bernama in an interview.
Rafe said Malaysia made up 60 per cent of the total global sukuk issuance last year but the Syariah bonds were subscribed mostly by institutional investors.
New IFSB chief faces challenging task
Points of Essence
- The change of leadership at the Islamic Financial Services Board has set yet another challenge for the new chief to spearhead a greater inclusion of the global financial community in the sphere of Islamic finance
- While his predecessor has successfully put in place the institutional workings of the IFSB, the new chief will need to command a greater authority and respect to bring Islamic finance in parallel with the global financial system.
By MUSHTAK PARKER | ARAB NEWS
Published: May 8, 2011 19:39 Updated: May 8, 2011 19:39
Jaseem Ahmed officially took over at the beginning of this month as the new secretary general of the Kuala Lumpur-based Islamic Financial Services Board (IFSB), the prudential and supervisory standard-setting organization for the global Islamic financial industry. He succeeds a prominent predecessor, Professor Rifaat Abdel Karim, who has been at the helm of the board for the last 8 years since it started operations in March 2003.
End of journey for Rifaat at the IFSB
Points of Essence
- There has been a shift of stewardship at the Islamic Financial Services Board since April this year.
- An interview with the IFSB’s former Secretary General, Prof. Rifaat Abdel Karim, will shed some lights into the pioneering efforts behind the establishment of the IFSB and the challenges it faced to emerge a global Islamic financial authority.
By MUSHTAK PARKER | ARAB NEWS
Published: May 8, 2011 19:39 Updated: May 8, 2011 19:39
Professor Rifaat Abdel Karim is the inaugural secretary general of the Kuala Lumpur-based Islamic Financial Services Board (IFSB), the multilateral prudential and supervisory standard setting organization for the global Islamic financial services industry. He was appointed in November 2002 and the board officially started operations in March 2003. During his watch, the organization increased from its nine founding members to 195 to date, including 53 regulatory authorities and central banks from 41 jurisdictions. During that time the IFSB has also published 14 standards relating to various products governance issues. Rifaat resigned last year and his tenure came to an end in April 2011, making way for a new secretary general. In the first installment of a two-part in-depth and unique interview, Rifaat discusses with Arab News the circumstances of the establishment of the IFSB; the major role that the IMF (International Monetary Fund), the Basle Committee and the Asian Development Bank played in its early years and continues to play today; and the political battle that had to be resolved to decide where the new organization would be located.
Islamic Economics, Banking, and Finance – The Indonesia Experience: Dr. Antonio Syafii
Dear Islamic Bankers,
If you happen to be within the vicinity of the University of California, Berkeley and are interested to know the state of Islamic banking in Indonesia, just head to the university hall and meet an Indonesian scholar for the related insights. Check out the details below:
Date: May 12, 2011
Time: 12-1 p.m
Venue: International House, Home Room, University of California, Berkeley
Speaker: Dr. Muhammad Syafii Antonio
Background of Speaker:
Dr. Muhammad Syafii Antonio is a renowned Islamic Banking expert from Indonesia, and has over 16 years of experience in the field. He holds Ph.D in Finance from University of Melbourne, obtained Masters of Economic from International Islamic University Malaysia and first degree in Islamic Law from University of Jordan and Islamic Studies Program from Al Azhar University, Cairo. He has published nine books on Islamic banking, economics, zakat and leadership. Currently, he serves as Board of Commissioner and Shariah Advisor in several Islamic financial institutions, as well as member of Indonesian Central Bank’s Expert Committee on Islamic Banking and National Shariah Council.
At International House, UC Berkeley, Dr. Syafii Antonio will present an overview of Islamic Economics, Banking, and Finance and will highlight Indonesia’s experience in establishing such system.
This event is free of charge and open to the public.
ihprograms@berkeley.edu, 510-642-9460
Source: http://events.berkeley.edu/index.php/calendar/sn/polisci.html?event_ID=43446&ovrrdr=1
2010 in review
The stats helper monkeys at WordPress.com mulled over how this blog did in 2010, and here’s a high level summary of its overall blog health:
The Blog-Health-o-Meter™ reads Fresher than ever.
Crunchy numbers
A helper monkey made this abstract painting, inspired by your stats.
A Boeing 747-400 passenger jet can hold 416 passengers. This blog was viewed about 12,000 times in 2010. That’s about 29 full 747s.
In 2010, there were 5 new posts, growing the total archive of this blog to 360 posts.
The busiest day of the year was October 20th with 91 views. The most popular post that day was Islamic banking: Sharia-compliant institutions buck trend.
Where did they come from?
The top referring sites in 2010 were en.wordpress.com, counter.bestproceed.com, statistics.bestproceed.com, search.conduit.com, and isegs.com.
Some visitors came searching, mostly for islamic finance news, reverse murabaha, islamic banking in sri lanka, unicorn international islamic bank malaysia berhad, and commodity murabahah.
Attractions in 2010
These are the posts and pages that got the most views in 2010.
Islamic banking: Sharia-compliant institutions buck trend November 2008
1 comment
Islamic Banking Law in Kuwait July 2008
2 comments
Shariah Governance – The real nexus for comprehensive Islamic financial regulatory and supervisory infrastructure August 2008
2 comments
Sri Lanka – A closer look at its Islamic banking framework July 2008
1 comment
Royal Bank of Canada plans to enter Islamic finance market July 2008
Sukuk Roadblocks May Rise With National Shariah Boards: Islamic Finance
Points of Essence:
- The AAOFI-led National Shariah Board plan to oversee Sukuk sales may face resistance from the Islamic finance practitioners even before its inception saying that would create another layer of bureaucracy as there has been sufficient regulation to monitor Sukuk. This will according to them stifle the growth of Sukuk and hamper its evolution speed
- AAOFI insisted that the Board will play a pivotal role in synchronizing and standardizing the sukuk regulations with the international standards which in turn may help clarify standards and bolster investors’ confidence in the Sukuk industry.
The plan to create national Shariah boards to oversee sukuk sales is drawing criticism from bankers and lawyers who say the groups would increase bureaucracy in the $1 trillion Islamic finance industry.
The Accounting & Auditing Organization for Islamic Financial Institutions, a leading global regulator, is in the final stages of a plan recommending governments appoint panels of scholars and experts at the national level to rule whether products comply with the religion’s tenets, Mohamad Nedal Alchaar, secretary-general of the Manama, Bahrain-based body, said in an interview in Kuala Lumpur on Oct. 26. The proposal will be submitted early next year, he said.
The regulator says such a system will help clarify standards and bolster investor confidence in an industry whose assets are forecast by the Kuala Lumpur-based Islamic Financial Services Board to almost triple to $2.8 trillion by 2015. The changes risk adding bureaucratic hurdles and slowing approvals at a time when sales are down 19 percent this year, according to CIMB-Principal Islamic Asset Management Sdn. and Atlanta-based law firm King & Spalding LLP.
Further regulation may just add another “layer of bureaucracy,” Jawad A. Ali, global deputy head of the Islamic finance practice at King & Spalding, said in an interview in Kuala Lumpur on Oct. 26. “I believe it would slow down the development of Islamic finance and render it uncompetitive.”
Facts about International Islamic Liquidity Management Corp (IILM)
- The International Islamic Liquidity Management Corp (IILM) is a collaborative effort by 11 central banks or monetary agencies, as well as two multilateral organisations to assist institutions offering Islamic financial services in addressing their liquidity management. The initiative will also facilitate greater investment flows for the Islamic financial services industry. The IILM will also be part of their efforts to enhance cross-border flows and also as part of an initiative to facilitate the growing significance of the international dimension of Islamic finance and its increased role in the international financial system
- The IILM is expected to be operational within the first half of next year and be based at Petronas’s Twin Tower, Kuala Lumpur.
Who?
- Shareholders – The regulators collaborating with Bank Negara Malaysia for the setup of IILM would be the shareholders of the initiative, as well as sit on its board whom each would contribute US$5 million (RM15.5 million) as their capital for IILM.
- Signatories- 13 signatories for the setup of IILM such as BNM, the central banks of Indonesia, Iran, Luxembourg and the United Arab Emirates, and multilateral organisations such as The Islamic Development Bank and the Islamic Corporation for the Development of the Private Sector
How?
- The IILM will issue short-term papers in international reserve currencies, such as the US dollar and the euro
- The initial ones will be in major currencies because it is to facilitate cross-border liquidity management
Bank Negara: issuance of two mega Islamic bank licences & establishment of International Islamic Liquidity Management Corp (IILM)
- Two foreign banks had been shortlisted for the Central Bank of Malaysia’s newest mega Islamic banking licences
- Newly established International Islamic Liquidity Management Corp (IILM) looks set to issue short term Islamic papers by first half of next year.
“We will announce one mega Islamic bank,” governor Tan Sri Dr Zeti Akhtar Aziz said yesterday on the sidelines of the Global Islamic Finance Forum 2010.
It was previously reported that Malaysia had shortlisted two foreign banks to be licensed as mega Islamic banks with a minimum capital of US$1bil each under the Government’s financial sector liberalisation measures announced last year.
On the country’s economy, she said Malaysia would remain firmly on its recovery growth path this year given the strong domestic economy.
Sharia finance body, Maldives lender to set up bank
Points of Essence:
- Islamic Banking & Finance Institute of Malaysia and the Government of Maldives sets up the first Islamic bank in Maldives
- Maldives Islamic Bank will be established in the next 6 months would be the impetus for the creating of the a conducive regulatory framework for Islamic banking industry in Maldives
KUALA LUMPUR Oct 26 (Reuters) – A Malaysian Islamic finance industry body and the Maldives Islamic Bank signed a deal on Tuesday to set up Maldives’ first sharia lender. Maldives Islamic Bank hoped to set up the bank within six months, its managing director Harith Harun said in a statement. A subsidiary of the Islamic Development Bank holds a 70 percent state in the Maldives bank while the government of Maldives owns the rest. The deal with the Islamic Banking and Finance Institute Malaysia, which is owned by the Malaysian central bank and several sharia banks, would enable a study of Maldives’ regulatory framework to create an environment that would foster the industry’s growth, the statement said. (Reporting by Liau Y-Sing; Editing by Razak Ahmad)
Source: Reuters
Global Islamic Finance Forum (GIFF)
This is to announce that the second Global Islamic Finance Forum (GIFF) is being held in Kuala Lumpur, Malaysia. The event which is themed “Islamic Finance: Opportunities for Tomorrow”, will run from today until 28 October 2010.To the uninitiated, GIFF 2010 is a key international event in the calendar of Islamic finance following the success of the inaugural GIFF in March 2007. Check out the GIFF’s website for details.
Islam allows organised tawarruq asset sales – scholar
Points of Essence
- Organized tawarruq is sought to be used as a financing and liquidity management tool despite differing views fromIslamic scholar due to its role in debt creation rather than real economic activity. It is suggested that there has to be a balance between the two necessities to leverage on this potential Shariah principle in this thriving Islamic financial industry. Under the same development, Malaysian stock exchange plans to launch tawarruq based platform to execute commodity murabaha transactions. The Arabian Business has the details.
Liau Y-Sing on Thursday, 04 June 2009
The Islamic financing structure of organised tawarruq should be allowed, a top Malaysian religious scholar said on Thursday, weighing in on an issue that has divided the $1 trillion industry.
Tawarruq is widely used as a financing and liquidity management tool but sharia jurists differ on its permissibility.
Most scholars sanction its use although some prominent jurists from the Hanbali school of thought have said it is legal trickery similar to another controversial contract which has been likened to interest-based financing.
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 »
Malaysian court rules divisive Islamic contract valid
Points of Essence:
- The Malaysian court of appeal has finally delivered a verdict which is in favor of Bai Bithaman Ajil. The controversy surrounding this Islamic home product in the global Islamic banking arena is well known which is further exacerbated by lower court rulings holding the product contractual document invalid. However, the latest ruling by the second highest court in the court upholding the validity of the product’s contract will be at least for now set a clear direction for Islamic finance in the country. Reuters has the report.
KUALA LUMPUR, April 1 (Reuters) – A Malaysian court has ruled that a popular but controversial Islamic finance contract is valid, a move expected to boost sharia banks in Southeast Asia’s most developed Islamic financial market.
The bai bithaman ajil or deferred payment sale contract is the mainstay of Malaysia’s Islamic finance industry and is commonly used in home loans. But some religious scholars, especially in the Gulf, say it is an interest-based loan cloaked in Islamic dress.
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.
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