Central Asia

#Iran establishes correspondent relations with foreign banks

Iran has established correspondent relationships with 230 foreign banks since January 16, following the implementation of the nuclear deal. In addition, Iran's Ministry of Economic Affairs and Finance reported that the Export Development Bank of Iran (EDBI) has begun brokerage relations with numerous banks around the world. This includes 64 banks in 20 European countries, 36 banks in 17 Asian states, four banks in Africa as well as one bank in Latin America. However, the Islamic Republic complains that it still does not have access to global financial markets. Many international banks still shy away from financing trade deals and processing transactions for fear of US penalties.

Financial #inclusion push: Govt, RBI mull launching sharia-compliant Islamic banking here

The Reserve Bank of #India (RBI) has proposed opening of "Islamic window" in conventional banks for "gradual" introduction of Sharia-compliant or interest-free banking in the country. Both the Centre and RBI are exploring the possibility of introduction of Islamic banking for long to ensure financial inclusion. The central bank's proposal is based on examination of legal, technical and regulatory issues regarding feasibility of introducing Islamic banking in India on the basis of recommendation of the Inter Departmental Group (IDG). RBI has also prepared a technical analysis report which has been sent to the Finance Ministry.

SBP cuts SLR by five percent for Islamic banks

The State Bank of #Pakistan (SBP) has announced a reduction in Statutory Liquidity Requirement (SLR) for Islamic banks and Islamic banking branches by 5% to fix at 14%. Presently, some Rs 570 billion of Islamic banking industry has been placed under the SLR with SBP. This amount includes some Rs 308 billion of Sukuk and Rs 225 billion of Bai-Muajjal. With the maturity of Rs 255 billion Bai-Muajjal, the amount will reach Rs 345 billion, therefore SBP has decided to cut the SLR and fix it at 14%. Time Liabilities, including Time Deposits with a tenor of 1 year and above, will not require any SLR. According to Islamic banking representatives, with the maturity of Rs 225 billion Bai-Muajjal, surplus liquidity of Islamic banking industry will surge to some Rs 400 billion, while there are no more investment opportunities for the Islamic banks in Pakistan.

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Are Contract for Differences #CFD / #Binary Options halal? Well, no. Why?

Many Muslims contacted me in the last years with one single repeating question: Are CFD and/or Binary Options halal meaning permissible in Islam? There are indeed forex brokers offering so called Islamic accounts avoiding outright interest. But still: A contract of difference does not involve the ownership of any underlying (currency, stocks etc.) hence money against money is exchanged in different amounts - this is the most simple test for the prohibited Riba. Any Muslim receiving such offers should therefore insist of receiving the Fatwa and if not provided leave out.

The intention on those trading activities everyone can ask himself; mostly it will be akin to gambling and this on top of the fact that the trading activity itself is a zero sum game; meaning what one wins another looses, which rules out again to participate in such business. It does not do any better that aside from luck the outcome is influenced by know how - the same is true for classical money games as Poker or Backgammon. Still nobody would classify Poker therefore as halal.

#Kazakhstan envisions emergence as finance hub for Central Asia

Kazakhstan is currently working on the launch of its new Astana International Financial Center (AIFC) in order to become a financial hub for the Commonwealth of Independent States (CIS), West and Central Asia. It is part of Kazakhstan President Nursultan Nazarbayev's vision entitled 100 Steps to lift Kazakhstan into the world’s 30 most developed nations by 2050. The creation of the AIFC is step 70 in the programme. Its regulatory framework is modelled after the Dubai International Financial Center and will open avenues for investors within the Eurasian Economic Union between Kazakhstan, Russia, Belarus, Kyrgyzstan and Armenia. Plans are to attract more than $350bn in foreign investment and to issue a total value of $91bn in sovereign bonds, mostly sukuk. The launch of the AIFC is anticipated for 2018 after the country will have had hosted the Astana Expo 2017 in the capital from June 10 to September 10 next year.

Burj Bank merges into Al Baraka

Al Baraka Bank (Pakistan) and Burj Bank have successfully merged operations under the name of Al Baraka Bank (Pakistan). The amalgamated entity will operate with a combined network of 224 branches and net assets in excess of 120 billion. Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group (ABG) said that the merger was part of the group’s strategy to expand its reach in Pakistan and strengthen the global footprint of Islamic Finance. This merger will further catalyze the growth by establishing Al Baraka as an even stronger institution in the Islamic Banking sphere. The substantial increase in combined capital and branch network will help to reach out to a broader customer base with a full range of Islamic Banking services.

Islamic bank Al Baraka Banking Group to expand network in #Pakistan

Bahrain-based Al Baraka Banking Group plans to expand its network in Pakistan following its merger with Burj Bank. CEO Adnan Ahmad Youssef said the Group's strategy in the Pakistani market was built on expansion in all Pakistani cities. Burj Bank’s 74 branches will be added to those of Al Baraka Bank (Pakistan) to form a network of 224 branches. Al Baraka Bank (Pakistan) aims to increase the number to 300 branches in the next four years. The merger is expected to take effect from the last quarter of this year, and the Bahraini bank will be the major shareholder in the merged institution. Al Baraka Banking Group is also setting up in Morocco after the North African nation introduced legislation allowing Islamic banks into the domestic market. With this entry the Group completes its network in almost all Arab Maghreb countries.

We intend to make use of the interest in Shariah-compliant products: Secura Investment Management MD

Two successful investment funds have facilitated the Secura Investment Management, the first SEBI registered and Shariah compliant venture capital fund, to come out with a third fund – Realty AIF – with a target to raise 200 crore. The first scheme Secura India Real Estate fund Domestic Scheme 1 has completed with a pay back record of 18%, while the second fund is in the investment stage and its tenure will be over next year. Managing Director M.A.Mahaboob said funds will be invested in equity modes, quasi-equity and equity related instruments, investment in a co-investment capacity with development companies and other promoters. The minimum investment under the scheme is 1 crore which is to be paid in instalments in three years with a down payment of 10% of the capital commitment.

Al Meezan launches MSAP-I

Al Meezan Investment Management (Al Meezan) announced the launch of Meezan Strategic Allocation Plan-I (MSAP-I), an allocation plan under the newly launched fund of funds scheme, Meezan Strategic Allocation Fund. According to Al Meezan CEO Mohammad Shoaib, the plan has an initial term of two years and is now open for subscription. He added that the previous plan with two years duration was very well received by the investors as it gained a cumulative return of 26.21% since its inception. He said the new MSAP-I plan was an ideal investment for those who wished an active asset allocation between Shariah-compliant equity and money market schemes. Al Meezan is the largest private sector asset management company in Pakistan with total assets under management of Rs 86.96 billion in 11 funds and has investor base of 47,000 clients.

Emirates NBD and UTI International to launch Islamic #funds in #India

Emirates NBD Asset Management (Emirates NBD) has entered into a partnership agreement with UTI International (UTI) to launch the Emirates Islamic India Equity Fund. The fund will expand Emirates NBD’s global portfolio and offer investors exposure to Shariah compliant Indian equities. Emirates NBD is looking to develop a portfolio of global funds with leading international partners, and its latest collaboration with UTI forms part of this strategy. Leo Puri, managing director of UTI, said the new fund presents an excellent opportunity for GCC investors to realise strong returns on Shariah compliant Indian equities. The rationale for the agreement is driven by Emirates NBD’s strong interest in India as a growth market. According to a recent McKinsey report, India is expected to rank in the top five global economies by 2020 and to reach the top three by 2030.

First Sharia-compliant #fund to focus on #realestate

#India’s first fully Sharia-compliant fund launched its third investment fund, Realty AIF 1 (Alternative Investment Fund). The fund is meant for the real estate sector with IL&FS Trust Company acting as trustee for the fund and Secura Investment Management as promoter. According to managing director Mehaboob, the fund will raise 200 crore and the minimum investment under the scheme is 1 crore. The tenure of the fund is seven years from the final closing. Mehaboob added that an annualised RoI of 15-20% is expected, with a profit share post hurdle of 80:20 with catch-up. Company officials said the investments under the fund will be made in the modes of investment in equity, quasi-equity and equity-related instruments. Other modes include investment in a co-investment capacity with development companies or other promoters of a portfolio company, and investment in special purpose vehicles created by the company.

#Sukuk company granted #tax exemption

In #Pakistan the Federal Board of Revenue (FBR) allowed exemption from withholding tax on purchase of immovable property by the Second Pakistan International Sukuk Company. The company has already enjoyed several exemption and concessions, exemption from levy of various advance taxes, profit on debt and tax on income from property. This further exemption was granted to strengthen the Islamic debt market by attracting investors by grant of tax concessions.

Jammu and Kashmir Bank mulls Islamic banking

In #India Jammu and Kashmir Bank said it was ready to offer Islamic banking, if the Reserve Bank of India approved the move. The bank's newly-appointed chairman Parvez Ahmad said there was a strong demand for such banking service in Kashmir but RBI would need to examine the proposal. RBI has recently suggested to explore the modalities of introducing interest-free banking products in the country in consultation with the government.

DIBPL first Islamic Bank to sign up for PayPak cards

Dubai Islamic Bank #Pakistan Limited (DIBPL) and 1-Link signed historic agreement for the issuance of PayPak cards in Pakistan. In line with State Bank of Pakistan (SBP) Vision 2020 to enhance and promote Financial Inclusion, 1LINK introduced Pakistan’s First Domestic Payment Scheme 'PayPak' which is aimed to provide efficient, cost-effective, and robust payments solutions. DIBPL remains committed to SBP vision to enhance and promote financial inclusion of unbanked population nationwide. PayPak’s strategic objective includes offering Domestic Payment Scheme to provide low cost payment services to every citizen of Pakistan.

J&K Bank willing to offer Islamic banking, says chairman Parvez Ahmad

In #India Jammu and Kashmir Bank is willing to offer Islamic banking to its customers. Chairman Parvez Ahmad said there was great demand for Islamic Banking in the state, so the bank would examine the proposal after taking the Reserve Bank on board. As far as the JK Bank positioning is concerned, it has 63% share on the asset side, 62% share on the deposit side, out of 862 branches, 745 are in the state, out of 1030 ATMs, 950 in JK state, 90% of the population is dealing with JK Bank. Ahmad added that other banks were only offering products and services, JK Bank was more concerned about the development of JK state as a whole.

IDB’s endowment fund to boost NGOs in #India

Muslim NGOs in India will be able to make use of Islamic Development Bank’s Awqaf Properties Investment Fund (APIF) to develop their endowments and generate funds for their various community development projects. According to Zafar Javeed, IDB’s national convener for India, APIF is in the process of identifying viable endowment projects. Javeed commended IDB group for financing about 300 educational and health-related projects across India over the past three decades. He said that the IDB was a big blessing for the Muslim community in India and there were many projects in the pipeline awaiting IDB aid. Referring to ongoing efforts to introduce interest-free banking in India, Javeed said former RBI governor Reghuram Rajan had hinted at introducing the system to achieve inclusive development.

#Sukuk auction criticised

In #Pakistan Chair­man of the Senate Standing Committee on Finance Senator Saleem Mandvi­walla has strongly criticized the issuance of $1 billion sukuk. He said that the hurried decision was an act of im­­maturity by the government and it was expected that the rates would be high. Senator Mandviwalla is surprised that Eurobonds which carry sovereign guarantees were sold at 8.25pc interest rate and sukuk, which are guaranteed by assets, are sold at 5.5pc. He said that the federal government also blamed the higher rate on Pak-India border tensions. He added that it would have been better to wait with the issuance for a more suitable time.

#Sukuk issuance to lure foreign investment

The re-entry of #Pakistan into the international Islamic bond market after a gap of two years with the issuance of one billion dollars Sukuk will help the country bolster its external account position. According to analyst Saad Hashemy at Topline Securities, Pakistan's ability to raise funds from the global financial markets at the historic low rates shows investors' optimism about the economic prospects. The government raised $1.0 billion through the issuance of five-year dollar-denominated Sukuk at the historic low rate of 5.5%. The investors across the world showed interest in parking around $2.4 billion in the bonds. Pakistan’s credit rating has remained stable or improved during the last few years. International credit rating agencies Moody’s, Fitch and Standard & Poor’s (S&P) rated Pakistan as B3 (stable), B (stable) and B (positive), respectively in their last ratings.

SBP aims to achieve 50pc financial inclusion by 2020: deputy governor

The State Bank of #Pakistan (SBP) is pursuing a three-pronged strategy to achieve the goal of 50% financial inclusion by the year 2020. According to Saeed Ahmed, deputy governor of the central bank, twenty million households need microfinance in Pakistan. The forum, organised by Shamrock Conferences International was held to strive for the expansion of financial services. Dr Mohammad Amjad Saqib, chairman of Akhuwat Foundation, delivered the keynote address and stressed the importance of microfinance. Speakers agreed that the microfinance specialists must create a sustainable model by offering competitive microfinance products, reducing costs and expanding their outreach.

Moody's assigns (P)B3 to #Pakistan's sovereign #sukuk

Moody's Investors Service has today assigned a provisional (P)B3 rating to the proposed US dollar Trust Certificates to be issued by The Third Pakistan International Sukuk Company. The (P)B3 rating reflects Moody's view that the sukuk certificate holders will effectively be exposed to the sovereign credit risk incorporated in the government's issuer rating. Payment obligations represented by the securities are ranked pari passu with other senior, unsecured debt issuances of the Government of Pakistan. The rating for the Government of Pakistan captures moderate economic strength, structurally large fiscal imbalances, a high government debt burden and high susceptibility to political event risks.

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