Central Asia

Al Hilal Bank welcomes Governor of Kazakhstan’s Central Bank to Abu Dhabi

Al Hilal Bank recently received Kairat Kelimbetov, the Governor of the National Bank of Kazakhstan at its headquarters in Abu Dhabi. Both parties discussed the key role of Al Hilal Bank as the first and only Islamic bank operating in Kazakhstan. Mohamed Jamil Berro, Al Hilal Bank’s Group CEO, personally welcomed Governor Kelimbetov and briefed the guest on the Islamic products offered by Al Hilal. Kelimbetov noted the role of Al Hilal Bank’s activities in the development of Islamic finance in Kazakhstan, and added that the National Bank of Kazakhstan will continue to support development of Islamic finance in Kazakhstan.

Chairman Shari’a Board of Dubai Islamic Bank visits Pakistan

Dr. Hussein Hamed Hassan, Chairman of Shari’a Board for Dubai Islamic Bank (DIB), recently visited Pakistan to meet various Shari’a Scholars, Government Dignitaries, senior Islamic Bankers, State Bank of Pakistan officials, prominent Pakistani businessmen and Dubai Islamic Bank Pakistan (DIBPL) management. Dr. Hussein during his visit held various crucial meetings on Islamic Banking and Shari’a compliance with major stakeholders in the country. He is considered as one of the founding fathers of Islamic finance due to his contribution to developing structures for the day to day running of Islamic banks and financial institutions.

The Importance of Corporate Governance in Family-Owned Companies

The adoption of good governance practices is beneficial to listed companies, unlisted companies, and family-owned enterprises. Good governance practices strengthen companies by building relationships among investors, boards of directors, managers, and employees. Implementing corporate governance guidelines allows businesses to obtain capital at lower cost, enhance business strategy, and attract the best human capital. Corporate governances also promotes competitiveness in the marketplace and is an antidote to corruption. CIPE partnered with the Pakistan Institute of Corporate Governance (PICG) and the Institute of Chartered Accountants of Pakistan to assess sectoral needs and develop the Corporate Governance Guide for Family-Owned Enterprises.

Has Islamic banking finally cracked Pakistan?

After a false start, Islamic banking has become the fastest growing segment of the Pakistani banking industry, with the full support of the government. Apart from the ever-present challenge of liquidity management, most local Islamic bankers agree that their most important task now is to build awareness in the country.

Iranian banks give 83% more loans in current year

Iranian banks gave 1,463 trillion rials (some $45.7 billion based on the exchange rate of US dollar at the free market) worth of loans in the first half of the current Iranian calendar year. However, a great portion of the bank's loans are bad loans. Iran's Melli Bank, Parsian Bank and Tejarat Bank have the highest amount of bad loans in Iran. Of the total 870 trillion rials (about $28 billion) in bad loans, Melli Bank's share is 130 trillion rials (about $4.2 billion), Parsian and Tejarat banks' shares is 110 trillion rials each (about $3.5 billion).

“Investments into private sector is our primary goal”

Caspian International Investment Company CJSC (CIIC) is a private equity investment firm founded in March 2008. CIIC's shareholders are Azerbaijan Investment Company OJSC;Aref Investment Group; Al-Ahmar Group for Trading, Industrial and General Agencies; as well as The Islamic Corporation For The Development of The Private Sector and Islamic Development Bank. The main goal of CIIC is to serve as an investment vehicle in order to receive exposure to the growing Azerbaijani economy. Orkhan Aghalarov, the acting General Manager of CIIC, said that investments into the private sector is CIIC's primary goal, and thus, the company is one of the main supporters of realization of the President's economic policy.

Islamic banks - FIs asked to participate in Shariah-based refinancing scheme

The central bank has asked Islamic banks and non-banking financial institutions (NBFIs) to participate in its newly introduced Shariah-based refinancing scheme. The advice came at a meeting with the senior executives of the Islamic banks and NBFIs with Deputy Governor of the Bangladesh Bank Abul Quasem in the chair.
At the meeting, the central bank assured the Islamic banks and NBFIs that it would provide extra fund in the scheme if necessary. Five Islamic banks have already deposited Tk 3.75 billion with the BB's newly opened account for introducing the refinancing scheme exclusively for Sharia-based banks and NBFIs.

Adamjee Life to enter Islamic insurance market next year

Adamjee Life is going to enter the Islamic insurance market by March next year, company CEO Fredrik de Beer announced in a recent interview. “We will complete the business plan to seek the board’s approval by the end of October. We are hoping to launch Takaful products by the end of the first quarter of 2015,” Beer said.
Adamjee Life follows Jubilee Life Insurance and EFU Life Assurance that have already announced their plans to enter the Shariah-compliant segment of life insurance. Pakistan’s insurance industry has seen quite some activity lately, as both life and non-life entities have shown interest in setting up Islamic window operation

Mega bank merger credit negative for CIMB Islamic Bank

The proposed merger between CIMB Group Holdings Bhd, RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB) would be credit negative for CIMB Islamic Bank Bhd, according to Moody’s Investors Service. Moody’s vice-president Eugene Tarzimanov noted that the merger would see CIMB Islamic Bank’s asset size triple as a result of acquiring RHB Bank’s and MBSB’s Islamic operations.

Pakistans Jubilee Insurance plans Islamic insurance business

Jubilee General Insurance Co will seek shareholder approval to offer Islamic insurance Takaful to enter the sector after conventional firms were allowed to offer sharia-compliant products earlier this year. Other firms entering the market include United Insurance Company of Pakistan and EFU Group, Pakistan's largest insurer, which plans Takaful windows for both its life and general businesses.

EU Sanctions lifted - Iranian Bank seeks indemnity

Kourosh Parvizian, the governor of Sina Bank, welcomes the move of the British Treasury's to repeal of an asset freeze on the bank. It says that other European countries are expected to make the same decision, according to Iran's IRNA news agency.

Al Baraka Bank issues first subordinated sukuk

The Pakistani unit of Bahrain's Al Baraka Banking Group has raised 2 billion rupees ($19.5 million) via the country's first issuance of subordinated sukuk, or Islamic bonds. The seven-year private placement is the first to be issued by an Islamic bank in Pakistan, according to Abdullah Ghaffar, head of investment banking at Al Baraka Bank Pakistan.

Due to the phasing in of Basel III global banking standards around the globe, several Islamic banks have issued subordinated instruments in order to raise capital, including those in Turkey, Malaysia, Saudi Arabia and the United Arab Emirates.

Bank scandal inquiry reopened by Afghan President

Ashraf Ghani, Afghanistan's new president has re-opened an inquiry about the theft of almost $1bn from the Kabul Bank, which had cause much turmoil and is said to be one of the largest banking failures in the word. Thereby he fulfils his campaign promise to fighting corruption as a priority and to combatting corruption comprehensively.
The bank's founder Sher Khan Fernod and the former chief executive, Haji Khalil Ferozi, were jailed for five years for taking $810m of the $935m.

Al Hilal Bank Awaits New Legislation for Islamic Finance

Almaty-based Al Hilal Islamic Bank may expand into neighbouring markets as legislation in the Central Asian countries changes. Islamic finance is gaining popularity in the region, but Al Hilal is currently the only sharia-compliant lender in Kazakhstan. The Abu Dhabi government wholly owns Al Hilal's parent company and according to its chief executive, Prasad Abraham, the bank is considering increasing its geographical presence as part of its 2015 business plan.

Pakistan: Orix Leasing to tap Islamic finance market

Orix Leasing Pakistan Limited (OLPL) plans to tap the high growth Islamic finance market. The company has entered into a non-binding Memorandum of Understanding (MoU) with Standard Chartered Bank (Pakistan) Limited (SCBPL) with regard to a prospective merger/amalgamation of Standard Chartered Leasing Limited (SCLL), a subsidiary of SCBPL with and into OLPL or acquisition of SCBPL’s 86.45 per cent equity stake in SCLL. The MoU further provides the acquisition of SCBPL’s 100pc stake in Standard Chartered Services of Pakistan (Private) Limited and acquisition of SCBPL’s 20pc stake in Standard Chartered Modaraba. There is no certainty that the MoU would result in a binding transaction.

Qatar planning to set up first Islamic bank in Tajikistan

Qatar has expressed its willingness to set up an Islamic bank in Tajikistan, which would be the first Shariah-based financial institution in the Central Asian country. The establishment of a full-fledged Islamic bank under Qatari-Tajikistan partnership was discussed when Ezdan Holding chairman Sheikh Dr Khalid bin Thani bin Abdullah al-Thani called on Tajikistan President Emomalii Rahmon in the country's capital Dushanbe last week. Sheikh Dr Khalid said the Qatari business community was viewing the Tajikistan market with great interest and willing to invest in the country, besides sharing its knowledge and expertise with local businessmen in different sectors, particularly Islamic banking. He termed as "extremely positive", the Tajikistan government's decision to enact necessary legislation required for Islamic banking.

Azerbaijani leasing company draws additional funds for Islamic leasing

Azerbaijani company Joint Leasing will conclude the first corporate Islamic leasing agreement next week. The company is considering the opportunity of attracting additional resources as part of the Islamic leasing project. At present, there is an opportunity to attract additional funds. In principle, leasing is a tool of Islamic finance. Ijara is among the tools used in Islamic finance.

SECP evolving efficient Islamic financial system

SECP is striving to establish a comprehensive Islamic financial system to cater for the needs of people, which are not inclined to use conventional financial products. The decision of SECP to permit conventional insurance companies to launch Takaful operations will result in rapid development of this sector. However, the development of an Islamic financial system needs to include Islamic banking industry, Takaful industry and Islamic capital and money markets with strong linkages, interdependence and synergies. Although Takaful has been in the market for long, it has yet to make significant inroads as the concept is clouded by unfamiliar terms and principles for commoners resulting in hesitancy. In absence of a viable Islamic capital market the adequate supply of quality financial instruments could be a difficulty.

Shariah Gets Hotter as Kazakhs Revive Islamic Bank Plan

Kazakhstan is reviving plans to develop Islamic finance and is “fine-tuning” legislation for Shariah-compliant banking, central bank Chairman Kairat Kelimbetov said. Some lenders are seeking to convert into Islamic banks, he said. The drive by Kazakhstan comes two years after its debut sukuk, which was denominated in Malaysian ringgit. Abu Dhabi’s Al Hilal Bank opened a branch in Kazakhstan in 2010, and remains the only Islamic lender in the oil-rich nation. However, Al Hilal Islamic experienced difficulties in generating business because of a lack of understanding of Shariah-compliant products by customers. Moreover, Kazakhstan will face legislative hurdles as it seeks to promote the industry and the nation is experiencing the early stages of development.

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