Central Asia

NAB arrests Modaraba corruption case accused

#Pakistan's National Accountability Bureau (NAB) has arrested Yasir Aziz accused in a Modaraba corruption case. The accused acted as finance secretary of M/S Elixir Group and signed the modaraba contracts issued by his brother Shahid Aziz. The public accuses Yasir Aziz of taking the investment and aiding his brother to misappropriate the money. Yasir Aziz also tried to sell the properties owned by the accused Shahid Aziz. NAB Director General Irfan Naeem Mangi confirmed that Yasir Aziz was arrested and assured that the NAB was committed to eradicate corruption from the country.

Ahmed Shuja Kidwai appointed CEO Al Baraka Bank

Ahmed Shuja Kidwai has been appointed as the new CEO of Al Baraka Bank (Pakistan). Kidwai replaces Shafqaat Ahmed, who led the bank for 25 years. Al Baraka Chairman Khalid Rashid Al Zayani thanked Shafqaat wishing him well in his future life and welcomed Ahmed Shuja Kidwai as the new Chief Executive Officer of the bank. Ahmed Shuja Kidwai has a diversified international banking experience of over forty years, he played a pivotal role in consolidating and establishing the bank's position especially in Karachi.

Draft Sharia rules for companies notified

The Securi­ties and Exchange Commission of Pakistan (SECP) has notified draft Sharia Governance Regulations 2018. The regulations concern Sharia-compliant companies and entities including the Sharia-compliant securities and Islamic financial institutions. The regulations are the first-ever holistic Sharia governance framework introduced by the corporate sector regulator. Considering the need for an extensive framework, IFD conducted consultation sessions with Sharia advisors, State Bank, Pakistan Stock Exchange, Institute of Chartered Accountants Pakistan, takaful companies, modaraba and NBFI Association. The regulations are now open to public consultation and stakeholders have the opportunity to share their comments and suggestions within two weeks.

#Kazakhstan getting closer to implementing Islamic finance

Kazakhstan will host a meeting on the implementation of Islamic finance on March 5. The Islamic Corporation for the Development of the Private Sector (ICD) is organizing the event to discuss the development of Islamic finance with the further release of sukuk in Kazakhstan. The list of participants includes the regional manager of the ICD Samir Tagiyev, the representative of the Entrepreneurship Development Fund "Damu" Rustem Ismailov, the chairman of the Islamic Finance Development Association (ARIF) Timur Rustemov, along issuers and investors of the Kazakhstan Stock Exchange. The parties will also consider the ARIF projects on Islamic financing in Kazakhstan, as well as the possibility of the Kazakhstan Stock Exchange functioning as a platform for the development of Islamic finance.

#Iran developing national #cryptocurrency to bypass US sanctions

Iran has revealed that one of the country’s banks is working on a state-backed virtual currency. Minister of Information and Communications Technology Mohammad-Javad Azari Jahromi tweeted he had proposed to implement the country’s first cloud-based digital currency. Iran is still mostly cut off from major international payment networks such as Visa and Mastercard and services such as PayPal. The announcement on its crypto project follows Venezuela’s launch of the world’s first national digital currency the 'petro'. According to President Nicolas Maduro, the oil-backed cryptocurrency has raised the equivalent of more than $735 million. After the successful pre-sale of the petro last week, Maduro announced a new virtual token, dubbed 'petro oro', which will be backed by precious metals.

#Iran May Follow #Venezuela In Launching Its Own Cryptocurrency

Iran has announced its intent to establish a national cryptocurrency. Mohammad-Javad Azari Jahromi, head of Iran's Ministry of Information and Communications Technology, posted in a Tweet that a test model for a cloud-based digital currency is being developed. The announcement comes after Venezuela's oil-backed "petro" cryptocurrency launch earlier this week. Venezuelan President Nicolas Maduro claims that the cryptocurrency has raised over $700 million. There are fears that the rise of state-backed cryptocurrencies could challenge international efforts to regulate financial transactions and impose sanctions. The three countries most interested in the technology, Iran, Venezuela and Russia, are all targeted by U.S. sanctions.

SECP introduces auditing #standards for Islamic finance sector

The Securities and Exchange Commission of Pakistan (SECP) introduced three new international auditing and accounting standards. According to the commission, the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) shariah standards have been notified after a thorough consultative process. The adopted standards include Shariah Standard No 17-Investment Sukuk, Shariah Standard No 18-Possession (Qabd) as well as Shariah Standard No 23-Agency and the Act of an un-commissioned agent (Fodooli). The commission said it has been playing a proactive role in providing an enabling regulatory environment for the growth of Islamic finance in the country.

Long-term Islamic financing facility launched

The State Bank of Pakistan (SBP) launched the Islamic Long- Term Financing Facility (ILTFF) based on Modaraba for exporters with a maximum limit of Rs1.5 billion. The central bank currently provides the Long Term Financing Facility (LTFF) through conventional banks. The ILTFF will allow exporters an opportunity to avail long-term refinance facility of SBP for purchase of new machinery from eligible Islamic banks. The period of financing under the ILTFF will not exceed more than ten years including a grace period of maximum two years. Islamic banks and Islamic banking branches of conventional banks may also apply to SBP. The allocation is subject to a maximum of 20pc of the limit under LTFF for utilisation under ILTFF. The State Bank’s move would support both the Islamic banking as well as exporters who achieved a positive growth after five years.

#Pakistan's Meezan Bank plans capital-boosting #sukuk

Meezan Bank aims to raise up to 7 billion rupees ($63.34 million) through a Tier 1 sukuk issuance. It could be sold either as a public offering or private placement. The bank did not give a time frame for the sale. Meezan had sold Tier 2 sukuk in 2016, raising 7 billion rupees through a 10-year private placement that used a mudaraba contract. There are five full-fledged Islamic banks and 16 Islamic windows in Pakistan, Meezan Bank being the country's largest sharia-compliant lender. The Islamic banking sector held 11.9% of the country’s total banking assets as of September.

Rs 7 billion #Sukuk launched by PSL

The Hashoo Group announced the issuance of rated, secured, long-term, privately placed Sukuk of Rs 7 billion by Pakistan Services Limited (PSL). PSL will utilize the Sukuk funds for construction and capital expenditure of new hotels and mixed-use developments in the cities of Multan, Faisalabad, Mirpur Azad Jammu Kashmir, Hayatabad Peshawar, Malam Jaba, Skardu and Gwadar. These properties are expected to open in 2018 and 2019. Present at the signing ceremony event was Murtaza Hashwani, Group Deputy Chairman & CEO, along with senior representatives of Hashoo Group, Yousaf Hussain, President & CEO of Faysal Bank, Fawaz Valiaani, CEO of Elixir Securities Pakistan and Basir Shamsie, Deputy CEO of JS Bank. Murtaza Hashwani said that the focus of Hashoo Group has always been growth of the hospitality industry, inbound tourism and the business events & conferences market in Pakistan. He further added that he was very positive about the future of Pakistan and of the of Hashoo Group.

BankIslami launches Shariah-compliant CP of Rs1.5b

BankIslami Pakistan has launched the country's First Shariah Compliant Commercial Paper (CP) Issue worth Rs1.5 billion for Hascol Petroleum. Hascol is Pakistan’s second largest Oil Marketing Company (OMC) in terms of volume managed through its more than 140,000 MT of oil storages and 498 retail outlets. BankIslami Pakistan acted as Mandated Lead Arranger & Advisor, Issuing & Paying Agent and Investment Agent for this CP Issue which was structured based on the Bai Salam cum Wakala model. The CP issue was oversubscribed by more than 80% of the issue size. The introduction of Shariah Compliant Commercial Paper is aimed to broaden avenues for Mutual Funds and other Institutional investors to invest in short-term/fixed income instruments in a Shariah-compliant manner.

#Bahraini bank plans aggressive #expansion in #Pakistan

Bahrain-based Ithmaar Bank plans to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank. Ithmaar's deputy CEO Abdul Hakeem al-Mutawa says banking penetration is less than 20% in Pakistan, so there are good opportunities to grow. Ithmaar Bank's parent company, Ithmaar Holding, listed recently on the Dubai Financial Market. Al-Mutawa believes the company is well established now to approach the capital markets and the bank has no imminent plans to raise funds through a bond or loan. Ithmaar Holding is also exploring the sale of its 25.4% stake in Bahrain's BBK, which has operations in Bahrain, Kuwait, India and Dubai. Al-Mutawa declined to comment on the timeframe for the disposal of the BBK stake.

CIBAFI and The World Bank presenting study on "Corporate Governance Practices in Islamic banks 2017"

It is well established that good corporate governance strengthens institutions and financial sectors, and in so
doing contributes to building strong economies and economic growth.

Deficiencies in corporate governance were among the factors that contributed to the global financial crisis
(GFC) of 2007–08. As a result, global standard setters such as the Basel Committee on Banking Supervision
(BCBS) and the Organisation for Economic Co-operation and Development (OECD) have been updating and
strengthening their guidelines on good governance practices.

The Islamic Financial Services Board (IFSB), which sets standards for Islamic financial institutions, published its
Guiding Principles on Corporate Governance in 2006 as its standard IFSB-3. The Principles address, within the
context of corporate governance, the distinct features of Islamic banks, such as the different relationship that
they have with some of their stakeholders.

More:

What Does Responsible Finance Have To Do With What Is Happening in #Iran?

In Iran more than a dozen people have been killed and thousands have been arrested in demonstrations over the last few weeks. Massive numbers of Iranians say their savings have been lost because of the collapse of poorly regulated or fraudulent institutions. According to Suzanne Maloney of the Brookings Institution, banks are shutting down without any kind of notice. The Iranian President’s recent budget proposal decreases subsidies to the poor at a time when the spending power of Iranians is also declining. Not being able to meet day-to-day expenses, respond to emergencies or take advantage of opportunities are a significant source of stress. The client protection principles, Smart Certification and the tools developed by the Smart Campaign offer resources for stakeholders in any country. They can ensure responsible treatment of clients and thus long-term sustainability. Iran's case shows the importance of quality financial products as a part of broader financial, economic, and social development.

Share of Shariah-compliant assets steadily rising

Growing at a fast rate, Shariah-compliant assets now represent 34.6% of the total assets of the Non-Banking Financial Institute (NBFI) industry. According to the Securities and Exchange Commission of Pakistan (SECP), the number of Shariah-compliant mutual funds has reached 109 and Shariah-complaint funds have 41% of the assets. In Pakistan the Takaful industry comprises of five dedicated Takaful operators and 21 window Takaful operators. Takaful sector assets represent 2.7% of the total assets of the insurance industry. During the year, the SECP took a number of initiatives for regulation and development of Islamic finance across the sectors it regulates. Tax neutrality for Sukuk was achieved by amending the Income Tax Ordinance. A new concept of a Shariah-compliant company was introduced through the newly promulgated Companies Act, 2017. To facilitate issuance of Sukuk, relevant regulations were amended both for public offering and for private placement.

#Iran Seven-Year #Sukuk #Issuance at $3.7b

Seven years ago the Law of Developing Financial Instruments and Entities was passed in the parliament. Since then, more than $ 3.76 billion worth of Islamic sukuk have been issued in the Iranian capital market according to the chief executive of the Capital Market Central Asset Management Company.
"From the fiscal 2010-11 up to the end of the ninth month of the current fiscal year, 47 kinds of sukuk worth more than 157 trillion rials have been released in the capital market, 17 of which worth $ 311.7 million have come to maturity," Gholamreza Abutorabi was also quoted as saying by the official website of the company: "The amount of installments and the original amount of these matured bonds have been reimbursed".
According to the CEO, 30 kinds of active sukuk worth $ 3.5 billion are currently in use and are being traded, whereas two other kinds worth a total of $ 89.9 million belonging to two companies will come to maturity. From the beginning of the current fiscal year on March 20 until now, more than $ 407.6 million worth of installments pertaining to various kinds of sukuk have been received by intermediary financial companies.

Bank Islam issues bank cards corresponding with Sharia law

Bank Islam recently presented its first Sharia-compliant bank cards to the #Kazakhstan retail market. Customers will not be able to pay for goods and services that are prohibited under the Sharia law. Therefore, the cards cannot be used in night clubs, casinos, bookmakers, tobacco and liqueur shops. Card holders can pay for goods and services in Kazakhstan and abroad, receiving a cashback of 0.5-1% from each purchase. It also allows carrying out purchases through the internet, transfers from card to card, online payment of taxes and fines. Debit cards of the bank are issued in two categories, Master Card Gold and Master Card Platinum. In the beginning of next year, the bank plans to launch its first credit cards. Cards are currently available for residents of Astana, Almaty and Shymkent.

Experts for strategy to use #fintech in Islamic finance

Islamic banks have been urged to adopt a strategy to make effective use of financial technology. At a seminar held recently, Ahmed Ali Siddiqui, director of Centre for Excellence in Islamic Finance at IBA, said there has to be a strategy for Islamic finance in the digital world. According to fintech expert Ashar Nazim, Pakistan is doing well in Islamic finance, but the country's finance industry has to adapt to fintech. Market Link Executive Director Ishan Kanji said that using fintech will support the agricultural sector by providing easy access of loans and facilities to farmers. He stressed on the need to tap into the informal economy, which is twice the size of formal economy in Pakistan. At the seminar Hasan Bilgrami, CEO of BankIslami, shared the success story of BankIslami being the first bank in Pakistan to use biometric technology.

#Iranian Private Banks Secure #Qatar Foothold

Several major Iranian private lenders have recently established correspondent relations with Qatar National Bank (QNB). Kourosh Parvizian, CEO of Parsian Bank, said these banks opened accounts with QNB and are prepared to offer financial services to Iranian and Qatari businesses. QNB governor Sheikh Abdullah Saoud Al-Thani said Qatari lenders will make efforts to remove trade obstacles quickly. The Iranian delegation in Doha held a meeting with officials from QNB, Al Rayan Bank and Al Khaliji Bank. They discussed using local currencies in bilateral trade and taking speedy measures to ease trade between the two countries. Bank Melli Iran is also holding talks with one of the largest banks in Qatar for establishing correspondent ties.

Iran Gov’t to Issue #Sukuk Worth $6b Next Year

The Irani government will issue 260 trillion rials ($6 billion) worth of sukuk in the next fiscal year, starting March 21, 2018. Proceeds will be used to fund the government's incomplete projects. Managing Director of Central Securities Depository, Gholamreza Aboutorabi, said the projected debt issuance was 30% higher compared to what was forecast for the current year.

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