Central Asia

#Kazakhstan, #Malaysia plant seeds for green Islamic finance

Astana International Financial Center (AIFC) has gained the support of technology financier Malaysia Debt Ventures (MDV) to develop both green and Islamic finance in Kazakhstan. Under a newly agreed MoU, AIFC and MDV will work closely with each other to share best practices, expertise and knowledge in these two areas. Apart from sharing knowledge, both parties will also explore financing green projects using Islamic financing tools. While not fully operational yet, AIFC is keeping busy by setting the groundwork. Green finance received a huge boost earlier in January when the European Bank for Reconstruction and Development agreed to launch the Green Financial System for Kazakhstan project, financed by Finland. With eyes on a comprehensive green financial system, engaging MDV could culminate in a variety of Islamic financial products for sustainable eco-friendly projects including green Sukuk.

#Pakistan sets rules for banks wanting to be fully sharia compliant

Pakistan's central bank has issued guidelines for banks that want to be fully-fledged sharia compliant, setting a three-year time frame for applicants to complete the process. The rules aim to accelerate the growth of Islamic banking in the country. Eligible applicants must have existing Islamic finance operations and the conversion process must start within six months of approval. After the conversion of conventional branches, the applicant can then apply for a fully-fledged Islamic banking license. Such conversions are rare in Islamic finance but are seen as a way to increase the scale of the bank and widen its reach into under-served rural areas. Islamic banking in Pakistan currently includes five fully-fledged Islamic banks and 16 conventional banks offering Islamic financial products. As of March, they held assets worth 1.9 trillion rupees ($17.9 billion), a 16% increase from a year earlier and 11.7% of total banking assets. However, their capitalization and profitability ratios remain below the industry average.

IDP and JCSB partner to grow #SME businesses

The Islamic Corporation for the Development of the Private Sector (ICD) and JSCB Microkreditbank Uzbekistan have entered into a Joint Strategic Collaboration to finance SMEs in Uzbekistan. The Line of Financing facility agreement for the amount of USD 12 million was signed by the CEO of ICD, Khaled Al-Aboodi and the Acting Chairman of JSCB Microkreditbank, Shukhrat Rasulov. The collaboration will focus on developing the private sector especially SMEs, improving the living standard, generating tax revenues for the government and promoting Islamic Banking in the country. Khalid Al-Aboodi stated that ICD was pleased to extend a line of financing facility to Microkreditbank which will enhance the impact of socio-economic development. Shukhrat Rasulov welcomed the partnership with ICD and ensured that JSCB was committed to providing professional banking services while promoting private entrepreneurship in the Republic of Uzbekistan.

5 Foreign Banks Licensed by #Iran

The Central Bank of Iran has released the names of 40 registered banks and credit institutions active in the country, which include the names of five foreign banks. The only five foreign lenders licensed to operate in Iran are the Hamburg-based Iranian-European Bank, Standard Chartered, Iran-Venezuela Bi-National Bank, Islamic Cooperation Investment Bank and Future Bank. The Iranian-European Bank has a German license, but is owned by the Iranian state. Standard Chartered is a British multinational banking company headquartered in London. It operates a network of more than 1,200 branches across more than 70 countries. Iran-Venezuela Bank a joint venture between Banco Industrial de Venezuela and the Export Development Bank of Iran. However, Iran is planning to sell some of its shares in IVBB, as the two countries currently have no commercial relations. The Islamic Cooperation Investment Bank is an Iraqi private lender, which currently has 11 branches in Iran. Future Bank is a fully commercial lender approved by the Central Bank of Bahrain, its branch in Iran is located in the Kish Free Trade Zone.

#NBKR and #Islamic Development Bank work on creation of a bank with #Islamic #finance #principles in #Kyrgyzstan

The National Bank of Kyrgyzstan and Islamic Development Bank are working on creating a bank with Islamic finance principles in Kyrgyzstan, according to the chief of NBKR, Mr Tolkunbek Abdygulov.
Abdygulov said in a statement, that developing Islamic finance principles will allow the citizens to use other types of financing, which will increase the competition between banks and thus improve the quality of bank services and bank products. “After entering into force of a new law on National Bank and banking activities, Civil Code will be complemented by regulations on deals according Islamic principles.”

#Dana Gas #venture #seeks #$26.5b damages from #Iraq Kurds

Dana Gas and its partners are looking at recovery for damages of at least $26.5 billion from Iraq’s self-governing Kurdish region for all delays in oil and natural gas projects. Dana Gas is based in the UAE and its partners in the venture named Pearl Petroleum, filed a petition in May at a federal court in Washington, DC, seeking “recognition and enforcement” of awards in a London arbitration case. The petition is part of a legal process that may allow Pearl Petroleum to seize Kurdish assets if the Kurds don’t pay awards decided in arbitration.
According to the Kurdish Energie Minister stated, the Kurdistan Regional Government “considers that the claimants’ approach in the arbitration is unconstructive and unnecessarily escalates the dispute. It will continue vigorously to pursue its rights and defend its position in all appropriate forums.”
Dana Gas and partners are pursuing claims in the London Court of International Arbitration against the Kurdish Regional Government for damages related to delays they say were caused by the Government in developing the projects.

#Turkish Banking Team Plans #Iran Visit to Resolve Halkbank Dispute

A delegation from the Central Bank of Turkey will soon meet their Iranian counterparts in Tehran to remove hurdles in the way of bilateral banking relations. Particular difficulties include Iranian citizens' bank accounts in the Turkish Halkbank. The banking ties were overshadowed by the detention of a senior Halkbank official in the US in March for allegedly violating Iran sanctions. Mehmet Hakan Atilla was accused of conspiring with Reza Zarrab, an Iranian-Turkish gold trader, to channel hundreds of millions of dollars through the US financial system on behalf of Iranian companies. Turkish Minister of Economy Nihat Zeybekci is also scheduled to visit Iran on June 21 to negotiate a preferential trade agreement between the two sides.

Bank Melli Iran Revamping European Branches

Bank Melli Iran (BMI) is planning to overhaul its European branches after clearing the procedures both inside the country and abroad. BMI's director for Foreign Exchange, Gholamreza Panahi, said the bank held negotiations with European officials to enhance its presence in the continent. He added that the bank's Najaf branch in Iraq is also ready to launch and expand the bank's network in East Asia. Panahi said BMI established correspondent relations with 25 foreign banks, which means connecting to a banking network that makes it possible to benefit from their wide range of services. The official also said BMI was the first Iranian bank to be reconnected to Swift, the international interbank messaging network, after the sanctions were lifted in January last year.

#Kuwait's Noor to Weigh Stake Sale of #Pakistan's Meezan Bank

#Kuwait’s Noor Financial Investment is considering the sale of its 49% stake in Pakistan’s largest Islamic lender Meezan Bank. The stake has a market value of about $396 million at the current market price, according to data compiled by Bloomberg. Noor Financial hired advisers to assess opportunities, but it has not tasked the consultants with either increasing or decreasing its stake in Meezan Bank. Shares in Noor Financial gained 5.9% by 12:30 p.m. in Safat, Kuwait, the highest since April 16. Meezan advanced 3.6% in Karachi trading to a record high.

Ongoing row among Islami Bank board of directors

Finance Minister Abul Maal Abdul Muhith said that the board of directors of Islami Bank Bangladesh has been engaged in an internal row. The row is over the appointment of new staff, that Islami Bank Vice-chairman Professor Ahsanul Alam claims were made on paying bribes. Due to the row between him and chairman Arastoo Khan, two groups in the board have also been created with the 21 directors supporting either Arastoo or Ahsanul, and each group calling the other a liar. In a statement released on May 20, nine directors threatened to resign from their posts. Professor Ahsanul Alam has claimed that three directors who are abroad have also opted in support of this statement.

ICD Signs MOU with the City Bank Limited to Strengthen Collaboration

The Islamic Corporation for the Development of the Private Sector (ICD) signed a Memorandum of Understanding (MOU) with City Bank Bangladesh in order to strengthen their collaboration. The signing ceremony was held at the 42nd Annual Meeting of the IDB Group in Jeddah, Saudi Arabia. The MOU was signed by the CEO of ICD, Mr Khaled Al Aboodi and Mr Sheikh Mohammed Maroof, Deputy Managing Director and Mr Mohammad Mahbubur Rahman, Chief Financial Officer of City Bank. The collaboration will encompass the areas of Term Finance, Public Private Partnership transactions, Lines of Finance and other areas. The signing ceremony was also attended by Mr Farid Masmoudi, Director of ICD, Mr Mahbub Jamil, Head of Structured Finance of City Bank and other high officials of both institutions.

Gassner's picture

Bitcoin Mania versus Tulip Mania?

Dear Reader,

regular readers may remember my critic on bitcoin from an Islamic perspective missing intrinsic value. The former blog entry you find here: http://www.islamicfinance.de/?q=node/7840 - almost two years ago.

So far bitcoin just went up higher and higher, with wild fluctuations but nevertheless.

It reminds on how bubbles work, think about the tulip mania in 1637 a nice piece of economic history. A single tulip bulb was traded and bought on credit. Check the Wiki page on it:

https://en.wikipedia.org/wiki/Tulip_mania

As bitcoin has even less value than a tulip except for payment purposes, it is the payment functionality, which can lead to destruction. What happens if a new alternative currency is becoming en vogue, which has a better usability and faster transaction time? In my view this is most likely trigger to burst the bubble.

FT Alphaville covers now the difficulties coming up with bitcoin's increasing transaction numbers causing inconvenience in using the digital currency:

https://ftalphaville.ft.com/2017/05/17/2188961/the-currency-of-the-futur...

Islami Bank transfers executive in a move to curb Jamaat's control

Islami Bank Bangladesh has removed the head of its human resource division amid a war between the old guard belonging to Jamaat-e-Islami and newly-appointed executives. The removed executive, Md Mahboob Alam, is also an executive vice president of the bank. The bank's board of directors took the decision to remove him from the division on Saturday. The new leadership of the bank are fighting for control of the bank with Jamaat supporters after taking charge five months ago. Vice-Chairman Professor Syed Ahsanul Alam Parvez said Mahboob was removed from the human resource division because he was appointing Jamaat loyalists to top posts of the bank. Another director, Professor Dr Qazi Shahidul said that Jamaat supporters were conspiring in various ways because they plan to take back control of the bank after changes through the next election.

Burj Bank cement strong reputation

With a strong background in Middle Eastern banking, Burj Bank has been building a solid reputation based on integrity. Burj Bank was founded in 2007 under the name of Dawood Islamic Bank as a central pillar of Pakistan’s Islamic Banking landscape. In 2011 the bank was renamed and launched as 'Burj Bank Limited', following a massive capital injection by some Middle Eastern investors of the bank. At present, almost 85% of Burj Bank’s shareholding stems from the Middle East, with majority ownership belonging to the Islamic Corporation for Development of the Private Sector (ICD). In 2012 Burj Bank grew its deposit base by 77% and the financing portfolio also reflected a growth of 67%. The branches grew from 50 to 75, reflecting a percentage distribution network growth of 50%. The bank has entered into diverse new lines of business including SME (small- and medium-sized enterprise) banking, investment banking, agricultural financing, cash management and home Musharaka.

Industry body #AAOIFI plans #standards for Islamic endowments

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) will develop a package of standards covering Islamic endowments or awqaf. AAOIFI did not give a time frame for the completion of its awqaf standards, but said its board had discussed and approved specifications regarding the accounting standards. The plans are part of wider industry efforts to modernise awqaf, which receive donations to operate specific social projects, such as mosques, schools and welfare schemes. Most awqaf do not disclose full financial figures, although their underperformance is believed to be considerable. In India, awqaf are estimated to own 490,000 properties but their estimated annual income is just 1.63 billion rupees ($25.22 million.)

SECP easing #Sukuk rules to facilitate Islamic finance

The Securities and Exchange Commission of #Pakistan (SECP) announced that it was relaxing regulations for Sukuk issuance in order to develop the Shariah-compliant market. The regulator said the SECP was amending the 2015 Issue of Sukuk Regulations to facilitate the issuers, reduce the cost of issue and ease the regulatory burden. The SECP has invited public opinion on the proposed amendments before their finalisation. The commission has also advised the PSX to come up with proposals for reducing the cost of market-maker for Sukuk issuance, rationalising the minimum size of public offer portion to reduce the cost of issue and organising a seminar with potential issuers to widen awareness. According to the SECP, the Sukuk market has been performing below potential in Pakistan. While the demand is substantial, supply remains short.

New Islamic bank to appear in #Kazakhstan

Zaman Bank is expected to enter Kazakhstan's Islamic banking services market in near future. The news was announced by Nurlan Abdrakhmanov, director of the financial market methodology department of Kazakh National Bank. He noted that among all the products of Islamic banking, murabaha is in the greatest demand in Kazakhstan.

#Iranian Banks' L/C Boom in Post-Sanctions Era

The Iranian Ministry of Economy has published the details of letters of credit (L/Cs) that Iranian banks allocated over the past few years. The country’s international trade picked up considerable pace when the sanctions against Iran were lifted. According to the ministry’s report, Bank Melli Iran allocated 154 letters of credit worth $42.71 million over a four-year period (2013-16). During 2013-16, Bank Keshavarzi opened 19,253 L/Cs worth over $10.5 billion. It also played an important role in issuing 21 bank guarantees valued at $15 million. Bank Mellat also issued 32 export guarantees worth $15.4 million and four import guarantees worth $13.5 million. Export Development Bank of Iran opened 550 L/Cs and issued more than 1,750 bank guarantees during 2013-15 to emerge as one of the main forces in the Iranian economy.

Head of #Islamic #finance body #IFSB to #retire

The secretary general of the IFSB will retire next week, according to a statement. Jaseem Ahmed will step down middle of April after leading the IFSB 6 years.
The process for the selection of a new secretary general has begun. Zahid ur Rehman Khokher acting as interim secretary general.

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