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IRTI Partners With Ateon And Settlemint To Develop #Blockchain-based Products For Financial Inclusion

The Islamic Research and Training Institute (IRTI) signed an agreement with Ateon to build a Blockchain-based financial product to support financial inclusion in IDB member countries. Saudi Arabian Ateon will be working on this project with SettleMint, which is a Belgium-based software company. Blockchain smart contracts enable the automation of the entire contractual process for Islamic institutions, alleviating the additional administrative and legal complexities associated with Sharia compliant financial products. Not only that, smart contracts are easy to verify, immutable and secure. The International Fiqh Academy has approved contracting through electronic means since 1990.

#AAOIFI Governance #Standard No. 8 'Central Shari'ah Board' has been officially issued

AAOIFI has issued its Governance Standard No. 8 "Central Shari’ah Board", which also marks the issuance of 100 standards so far. Standards have been issued in areas of accounting, auditing, governance, ethics as well as Shari’ah. According to Chairman Dr. Ishrat Hussain, this standard will support the regulators for establishing and operating Shari’ah boards at jurisdiction level. A survey with experts was conducted and public hearing sessions were held in Bahrain, United Arab Emirates, Turkey, and Pakistan. Although the standard encourages the creation of Central Shari’ah Boards (CSB) at national levels, the guidance provided would standardise the global regulatory practices in this respect. The standard also presents a country-level approach for regulating the Islamic Finance Industry. It provides detailed guidance on the definition, scope of work, responsibilities, appointment, composition, independence and terms of reference of a Central Shari’ah Board.

New release of IFSB’s Prudential Database from 17 countries shows improved #Islamic #banking #performance

The Islamic Financial Services Board (IFSB) has announced new country-level data on growth of the Islamic banking systems for Q4 of 2016 and Q1 of 2017 from 17 IFSB member jurisdictions. IFSB Secretary-General Zahid ur Rehman Khokher said the IFSB’s Prudential and Structural Islamic Financial Indicators (PSIFIs) database project has reached 14 quarters, and that it would soon be extending to four new jurisdictions. He added that the IFSB also plans to release sector level balance sheets of entire jurisdictions for the Islamic banking market starting next year. The PSIFI project currently compiles data from 17 member countries: Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Iran, Jordan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Saudi Arabia, Sudan, Turkey, and the United Arab Emirates. The IFSB is now in the process of collecting Islamic banking data from these new contributors: Qatar Central Bank, Bank of England, Central Bank of Lebanon and Palestine Monetary Authority.

TASIS appointed as Shariah Advisor for Tata Group Shariah Mutual #Funds

Taqwaa Advisory and Shariah Investment Solutions (TASIS) has been appointed as Shariah Advisor for Tata Group Shariah Mutual Funds. They include Tata Ethical Fund (TEF), which is a domestic fund and Tata Indian Shariah Equity Fund (TISEF), which is an offshore fund. TASIS claimed that TEF was the only Shariah compliant fund in which charitable trusts are allowed to invest without attracting tax. Under the current agreement, TASIS is supposed to ensure that the investment and operations of TEF and TISEF are Shariah compliant. In India there is low awareness about investment in securities. The availability of options such as TEF would help this section of the society to become part of the mainstream financial system and hence contribute to the goal of financial inclusion.

IFSB #Engagement #Session with the #Indonesian Islamic Finance Stakeholders

The Islamic Financial Services Board (IFSB), Bank Indonesia and the Financial Services Authority of Indonesia (OJK) organised an Industry Engagement Session. The event was entitled "The Global Islamic Finance Industry and the IFSB" and took place on 2 October in Jakarta. Anwar Bashori, Head of Islamic Finance at Bank Indonesia, shared his optimism that there is strong potential for further growth of this sector in Indonesia. He also touched on the importance of Halal tourism and food industry, and the various challenges and opportunities related to Fintech. In the panel discussion Prof. Volker Nienhaus commented on the emerging trend which is expected to enhance financial inclusion through the greater use of fintech. Ahmad Buchori shared the current issues of Islamic finance in Indonesia. Dr. Rifki Ismal’s presentation focused on developing the Islamic social sector to enhance the Indonesian economy. The session ended with discussions between the participants, where the industry players reaffirmed the important role of regulators. There was a request for more platforms to address and discuss key issues and concerns of the Islamic finance players.

Al Rajhi Bank eyes Asean #expansion

Al Rajhi Bank #Malaysia outgoing chairman Datuk Seri Dr Nik Norzrul said his successor would continue with the plan to expand the bank’s operation, targeting neighbouring markets like Singapore and Indonesia. Nik Norzrul has been with Al Rajhi Bank since the bank established its wholly-owned subsidiary in Malaysia in 2006. He has been a board member of Al Rajhi Bank Malaysia since 2006 and its chairman since 2015. Today the bank has assets worth a total of RM9bil, compared with RM291mil in 2006. In the retail segment, the bank continues to see growth in the demand for current account/savings account services. In the corporate segment, Nik Norzrul said Al Rajhi Bank Malaysia was working on strengthening its presence targeting owner-led enterprises as well as SMEs.

FNB re-launches 10-year-old #Islamic #banking offering

First National Bank of #Botswana is re-launching products and service offering to the local Muslim community. Held at the Travel Lodge Conference Centre in Gaborone, the re-launch seeks to sensitize patrons and attract new customers. FNB Botswana CEO, Steven Bogatsu, said the re-launch has been long coming since the product was launched ten years ago in 2007. According to FNBB Islamic Banking Representative, Tahera Mhaisker, the offered services encompass transactional banking, vehicle and asset financing, as well as property finance for both residential and commercial properties. Mhaisker added that the re-launch was the culmination of an exciting journey for the bank.

PHL infrastructure program to benefit from #Islamic #bond market —HSBC

According to the Hongkong and Shanghai Banking Corporation (HSBC), #Philippines infrastructure can benefit from the Islamic bond market. HSBC Philippines President Wick Veloso stated that Islamic finance can be a good infrastructure investment vehicle for developing economies such as the Philippines. Earlier this year, Finance Secretary Carlos Dominguez III said the government plans to venture into the panda bond market and Sukuk debt papers. The Philippines intends to spend over P8 trillion on infrastructure and the bulk will be financed through tax revenue. For its part, the cental bank is advocating for the Islamic Banking Act which will effectively allow Islamic Banks to function.

MIDEAST #DEBT-#Qataris hold non-deal bond roadshows as rift drags on -sources

Qatari banks have met investors in Europe and Asia to gauge their interest in potential U.S. dollar bond issues. Access to international debt markets has become problematic since the diplomatic crisis has erupted. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar, accusing it of supporting terrorism. Cross-border deposits accounted for about a quarter of Qatar's total deposits, so banks started to look for alternative funding. Al Khalij Commercial Bank, Doha Bank, Qatar International Islamic Bank and QNB have all met investors in recent weeks. Feedback was positive, but investors also made clear that issuers would have to pay premiums in order to attract sufficient demand. According to an international portfolio manager, the premium that Qatari banks would have to pay is about 30-40 basis points. A second fund manager said Qatari banks would have to pay up not only because of the increased political risk, but also because of general market conditions in the region.

Danajamin an unsung hero of Islamic capital market

In #Malaysia Danajamin is of national importance because of its role to ensure continued flow of credit in the financial system. It contributes to the democratisation of the capital market by giving financial guarantee insurance to companies that are raising funds from the market through the issuance of bonds and sukuk. Danajamin has provided credit enhancement guarantees for RM9 billion bond/sukuk programmes issued by 31 Malaysian companies across various sectors. These include guaranteeing sukuk issuances to finance the West Coast Expressway Project, connecting the west coast of the peninsula from Banting, Selangor, to Taiping, Perak. Recently, Danajamin has become the first financial guarantee insurer in the world to issue its own sukuk. The agency issued its maiden Tier II Subordinated RM500 million Sukuk Murabahah, with a tenure of 10 years and priced at a yield of 4.8% per annum on Oct 6. The demand from investors was so encouraging that Danajamin decided to upsize the issuance from an initial RM300 million to RM500 million.

Exclusive - #Saudi Arabia preparing tougher rules for insurers - sources

Saudi Arabia’s central bank is preparing tougher rules for insurance companies. A new supervisory framework will be introduced in the coming months that will force insurers to boost capital significantly and improve internal risk controls. The moves are aimed at triggering consolidation in the insurance industry and forcing weaker companies to merge with stronger ones. The proposed changes were discussed during a meeting between officials of the Saudi Arabia Monetary Authority (SAMA) and senior insurance executives. Saudi Arabia’s insurance market is fragmented, with only a few companies dominating the sector and an abundance of smaller firms unable to make inroads. The central bank does not want the smaller companies to fail, as more than half of the shares are owned by politically sensitive retail investors in a market unaccustomed to liquidations.

#Sukuk momentum seen as sales poised for record

Cheap oil and ambitious infrastructure-building programmes have set the scene for a record year for Islamic bond sales. In the Arabian Gulf, Saudi Arabia led the way with a $9bn global offer in April, while Oman and Bahrain have also sold sukuk. In Malaysia, funding for rail and other projects is driving ringgit issuance by state- owned companies. According to data compiled by Bloomberg, sukuk sales have reached $42.2bn so far this year. CIMB Islamic Bank has arranged the most Islamic note sales by value this year. The bank's CEO, Mohamed Rafe Mohamed Haneef, expects this momentum to be continued through to 2018. Besides the Saudi offer, the biggest sales so far this year are Hong Kong with $1bn, Indonesia with $3bn, Turkey with $1.25bn, Oman with $2bn and Bahrain with $850mn of sukuk in September. In Malaysia, state-owned companies DanaInfra Nasional and Prasarana Malaysia have been among the biggest corporate issuers this year.

#Russia's Sberbank considers Islamic finance entity, to propose regulatory change

Sberbank is considering setting up an Islamic finance entity and will propose regulatory changes to facilitate sharia-compliant business. Vnesheconombank and Tatfondbank are also developing Islamic finance products. Legislation will need to be passed in Russia to make Islamic finance cost-effective. Taxation is often an obstacle, as transactions have double or triple tax duties since they require multiple transfers of underlying assets. Sberbank is currently testing pilot transactions in leasing, financing food production and trading. Oleg Ganeev, deputy chairman at Sberbank, said the decision on whether to set up a separate entity could come by next year. He added that local businesses could also consider issuing sukuk, as they have a variety of tangible assets that can support such deals.

#Malaysia is Perfect ‘Test Bed’ for #FinTech Development: Central Bank

Malaysia’s central bank said that the country is the ideal test bed for developing financial technology (fintech) solutions. Marzunisham Omar, assistant governor at Bank Negara Malaysia, explained that the growth of the sector has provided innovative opportunities within the financial industry. While the country’s central bank is keen to push a fintech agenda, its position on digital currencies is not as clear. Bank Negara governor Muhammad bin Ibrahim said that a blanket ban on cryptocurrencies was not out of the question. The bank is currently developing guidelines for them. Either way, by the end of the year, the bank is expected to reveal its position on the cryptocurrency market.

Arcapita And Mumtalakat Acquire NAS United Healthcare Services

Arcapita and Bahrain Mumtalakat Holding Company have partnered to acquire an approximately 90% stake in NAS United Healthcare Services (NAS). Arcapita is a global Shari'ah compliant alternative investment manager. Mumtalakat is the sovereign wealth fund of the Kingdom of Bahrain. Abu Dhabi-based NAS is a regional leader in the provision of third-party administrator services to more than 40 health insurance and takaful companies in the Arabian Gulf. NAS services a pool of more than 500,000 insured members and processes more than 3 million medical claims per year. The market for outsourced medical claims management in the GCC region is expected to grow significantly. Most GCC governments have either implemented mandatory healthcare insurance coverage or plan to launch initiatives in the next 2 to 3 years.

#Malaysia to issue more #green #sukuk for infra projects

Malaysia will issue more green sukuk to finance environmental-friendly infrastructure projects. Energy and Green Technology Minister Datuk Seri Dr Maximus Johnity Ongkili said the government was confident it would achieve its renewable energy generation target of 7,200 megawatts (MW) by 2020. The solar energy will contribute 2,080MW to it. In July this year, Malaysia issued the world’s first green sukuk, RM250 million Sustainable Responsible Investment (SRI) sukuk, to finance the construction of an LSS project in Kudat, Sabah. Quantum Solar announced the world’s largest green SRI sukuk issuance of RM1 billion recently. The projects are expected to create up to 3,000 jobs, generate electricity for up to 93,000 households and reduce carbon emissions by 210,000 tonnes annually.

Qatar International Islamic Bank readies $2 bln #sukuk programme

Qatar International Islamic Bank has finished creating a $2 billion sukuk issuance programme and is preparing to issue it when market conditions improve. Qatar's access to international bond markets has become problematic since Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with the country. Instead of debt markets banks have turned to privately placed bond and sukuk deals, as well as bilateral loans. Qatari banks are facing greater urgency to secure funding because banks from the four Arab countries have been withdrawing deposits from Qatar. Last month the largest Qatari lender, Qatar National Bank, raised $630 million in Taiwan’s Formosa bond market. Commercial Bank of Qatar is also considering whether to borrow money on the Taiwanese bond market.

What the West doesn’t understand about #UAE foreign #aid

In 2013, 2014, and 2016, the UAE was the world’s biggest international donor, disbursing billions of dollars each year. In 2015, it had the fourth highest aid per capita in the world. Most westerners have no idea that the UAE is so active in foreign aid. Around 90% of its foreign aid is developmental with the rest going on humanitarian and religious/cultural assistance. The recipients are primarily developing Arab and Islamic countries, including Egypt, Yemen, and Jordan. A key factor is a difference in Islamic and secular westerner attitudes to charity. When Islamic banks in the Gulf region are solicited for funds to support civil society projects, they often donate only on the condition that their donation be anonymous. Going forward, transparency efforts must continue. However, the UAE must also work hard to protect the dignity of its aid recipients via appropriate levels of discreetness.

Faith And #Investment Come Together As Polling Shows The Public Want Investors To Act With Conscience

The Church of England is circulating a video which discusses investment issues within the church. The initiative is part of Good Money Week to stimulate responsible investment. The YouGov research for Good Money Week shows that there is a high demand for ethical and sustainable investment. 57% of Britain's public believe investment managers have responsibility to ensure holdings are managed in a way positive for society and the environment. There is a rising demand for fossil free funds: 40% want a fossil free option, up from 35% last year and 32% in 2015. This rises to 57% of adults under 24. The research also found that UK savers feel disempowered by financial intermediaries. 76% of Britain's public don’t know how much of their pension is invested ethically and 30% believe they have no say in how their assets are invested. During Good Money Week, the Church of England provides the tools to find out more about ethical investment and helps to take the first steps.

NAB to investigate #merger of KASB bank into BankIslami

#Pakistan's National Accountability Bureau (NAB) initiated an inquiry into the alleged misuse of authority by SBP officials at the amalgamation of KASB Bank into BankIslami. According to the State Bank of Pakistan (SBP), a smear campaign was run in the media against them. SBP added that the onesided views presented in the media led to misjudgment about the authority of SBP as a guardian of the financial sector. All stakeholders of the defunct KASB Bank were well aware of the poor financial conditions of the bank. The State Bank gave ample time to the sponsors of KASB Bank to inject further capital into the bank. Besides capital shortfall, the bank and its sponsors engaged in fraudulent practices and were siphoning off more than Rs 3 billion from the bank. SBP stated that none of its officials misused authority nor were involved in any kind of corrupt practices.

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