Islamic Banking

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#Philippines central bank approves preliminary Islamic banking regulations

Bangko Sentral Ng Pilipinas has approved preliminary regulations for Islamic banks and Islamic banking units. The preliminary policy initiatives of the central bank came after the Islamic banking law was signed by President Duterte on August 22 and became effective on September 15. The preliminary regulations are to jumpstart the implementation of the law. Banks must establish their own Shariah advisory boards to ensure Shariah compliance for their institutions. The Philippines has been accelerating the growth of its Islamic economy sectors in the last couple of years to attract foreign investments and to provide its approximately 10 million domestic Muslim population with an Islamic banking option.

Islamic finance gains ground in #UK despite confusion about offerings

According to the 2019 Islamic Finance Consumer Report from Gatehouse Bank, several new faith-based lending or savings accounts have been launched in the UK, but only 54% of Muslim consumers have tried any of them. Gatehouse Bank CEO Charles Haresnape sees that most people don’t really understand Islamic finance, even Muslims don’t understand it. He said that Gatehouse is intent on developing the Islamic finance sector in Britain. Haresnape predicts growth for the UK Islamic finance market, driven by the country’s expanding young Muslim population, but said awareness and education would be key factors in driving uptake.

Islamic finance gains ground in UK despite confusion about offerings

The UK Islamic finance sector holds an estimated £15 billion ($19 billion) of assets, the largest outside the Middle East and Asia. The Gatehouse Bank is intent on developing the Islamic finance sector in Britain.

Leaders call for use of alternative currency among Muslim countries against US Dollar

At the ongoing Kuala Lumpur Summit 2019, leaders of the Muslim world have pressed for alternative currency for use in trade and seek independence from US Dollar. Turkish President Recep Tayyip Erdogan said Muslim countries should try to create new transaction systems. He added that Islamic finance needs to be part of the agenda just like in Malaysia. Meanwhile, Iran's President Hassan Rouhani was of the view that Muslim nations should come up with a new own cryptocurrency. Malaysia's Prime Minister Tun Dr Mahathir Mohamad also believes that a united cryptocurrency is needed for Muslim states, as a cryptocurrency can cut through bureaucratic and market fluctuations. He added that utilising cryptocurrency or national currency would help attain independence from over-reliance on the US dollar.

#Cameroon bets on Islamic financing to boost financial inclusion and attract Middle Eastern investors

In Cameroon, only one bank (Afriland First Bank) and three microfinance institutions practice Islamic financing. Yet, the appropriation of this type of financing can considerably contribute to the development of financial inclusion in Cameroon. To raise awareness about the topic, the Ministry of Finance and the UNDP organized a forum on the theme "Islamic financing: contribution to Cameroon's economic growth and to the achievement of sustainable development goals". According to Finance Minister Louis Paul Motazé, Islamic financing promotes financial inclusion and it can also constitute a complementary lever for economic growth by attracting foreign investment from Middle Eastern countries.

#Qatar reaches out to Shariah market in #Malaysia, #Turkey

Qatar has taken the lead in reaching out to Malaysia and Turkey through which the country aims to be the dominant player in the global Shariah financial landscape. Under the proposed plan, Turkey would cover Islamic finance needs in Europe, Qatar would serve the greater Middle East and North Africa and Malaysia will continue to serve the Asian markets. The London Stock Exchange is currently a global venue for the issuance of sukuk, while Hong Kong and Luxembourg have also made inroads but Qatar believes the market should be led by Muslim countries. Qatar Financial Center (QFC) Authority CEO Yousuf Mohamed al-Jaida has a vision to cover the entire globe’s Islamic financial transactions between three financial centres, Doha, Istanbul and Malaysia, therefore he sees a need to share platforms and technology.

2020 is the year of sustainability on Arab stock exchanges: AFE’s Secretary General

The Arab Federation of Exchanges (AFE) has been working on launching a development strategy to localise financial technology and sustainable development, declaring 2020 the year of sustainability in Arab stock exchanges. “Reforming the home from within” is the approach taken by the AFE’s Secretary General since taking over the secretariat last year. The most important change was the adoption of a new system for the AFE to restructure its board of directors. The AFE also signed a memorandum of understanding with the Financial Technology Corporation in the Middle East and North Africa, and there will be a kind of joint training for financial technology. Last year the AFE managed to expand the federation’s membership base, it currently includes 21 active members, with 17 stock exchanges and four clearing companies.

À la recon­quête de la finance islamique

Présentée comme un nouveau pilier de la place financière il y a quelques années, la finance islamique était en veilleuse. L’organisation du deuxième Sukuk Summit au Luxembourg le 11 novembre dernier l’a remise en lumière. Bandar Hajjar, président de la Banque islamique de dévelop­pement a annoncé que son institution allait installer une «présence légale» au Grand-Duché pour développer les sukuk en Europe. Aujourd’hui, le Grand-Duché est le cinquième pays pour la domiciliation de fonds d’investissement conformes à la charia.

#Turkey, #Malaysia, #Qatar can pioneer in Islamic finance

Ready to be taken to the next level, the burgeoning sector of Islamic finance is ready to take root in new regions through Turkey, Malaysia and Qatar. According to Yousuf Al-Jaida, CEO of the Qatar Financial Centre, Malaysia could act as a gateway for Islamic finance into Asia, with Turkey into Europe and Qatar the Middle East and Africa. He stressed that Malaysia was ready with its legal framework to facilitate the sector, while Qatar and Turkey need to step up and do more for the sector. Al-Jaida said these three countries could form a large platform to share experience, technology and knowledge. He is optimistic and sees a bright future, as Islamic finance is now growing at an even quicker pace than conventional finance.

Islamic financing-a misperceived concept

Nearly 17 years after its entry into Pakistan’s financial space, Islamic financing has grown considerably. Its acceptance has cleared up the initial mist, scepticism and suspicion associated with the concept. The effort to introduce Islamic banking started in early 2002 with the granting of licence to the Meezan Bank. The growth has resulted in five full-fledged Islamic banks namely Meezan Bank, Al-Baraka Bank Pakistan Limited, Dubai Islamic Bank, Bank Islami Pakistan and MCB Islamic Bank. Many conventional banks are also operating Islamic banking branches. However, there is still a low level of awareness about opportunity and economic benefits. Pakistan's present government has decided to initiate a comprehensive plan for the promotion of Islamic banking in the country.

Aust tax rules complicate Islamic finance

Australia could be a regional leader in Islamic finance but tax issues are holding the sector back domestically. Talal Yassine, the managing director of Crescent Wealth, said that Australia needed to seize the opportunity of being so close to the world's leading Islamic economy, Malaysia. He said Australia's financial industry should follow the lead of the agricultural industry, which decades ago made the decision to dominate halal exports. Australian Muslims spent $US5.3 billion ($A7.8 billion) on the lifestyle sector in 2018, including $US1.94 billion ($A2.9 billion) on media and recreation and $US1.74 billion ($A2.6 billion) on food. With a growing Muslim middle class, Yassine sees a massive opportunity waiting to happen.

#Indonesia’s Alami wants to prove Islamic finance can be profitable

Alami started as an aggregator platform in 2018. The firm later obtained a registration from the Indonesian Financial Services Authority (OJK) in May 2019, and since then, the startup has channeled nearly 70 billion rupiah (US$4.96 million) to more than 50 SMEs. Founder Dima Djani hopes to dispense a total of 80 billion rupiah (US$5.6 million) by the end of this year, and he targets to triple the number next year. From fundraising to business operations, Alami is committed to complying with all sharia principles and values. In the near future, Alami plans to reactivate its aggregator platform, and the firm is also currently exploring opportunities to add individual loan services in collaboration with sharia banks.

Sharia committee wants to quadruple Islamic bank assets by 2024, will partner with #Malaysia

Indonesia's sharia financial committee hopes to quadruple the nation's sharia bank assets over the next five years. The comittee's executive director Ventje Rahardjo said that the goal was to reach Rp. 2 quadrillion (US$142.2 billion) in sharia bank assets by 2024. The committee plans to widen its coverage of Islamic finance to the Islamic economy in general. Therefore, the name of the committee will be changed to the National Committee for Sharia Economy (KNES) to better reflect its responsibility to oversee the development of the halal value chain. Ventje added that Indonesia and Malaysia would work together to create a regional halal standard. The committee also plans to digitize sharia financial services, including a digital zakat platform and a sharia-compliant e-wallet.

IFDI 2019 witnesses shifting dynamics in Islamic finance

The Islamic Corporation for the Development of the Private Sector (ICD) released the seventh edition of the Islamic Finance Development Report at the Indonesia Shariah Economic Festival 2019. According to the report, the Islamic finance industry’s assets grew to $2.5 trillion in 2018 from $2.4 trillion in 2017, a rise of 3%. This growth slowed from previous years and this was particularly noticeable in the industry’s main markets. Malaysia, Bahrain and the UAE continue to spearhead developments in the industry, while Uzbekistan, Ethiopia, Cyprus and Indonesia are among the biggest gainers in the rankings. Despite the slower growth, new banks and markets continue to enter the market, as seen in Ethiopia, Algeria and Afghanistan. Also, new liquidity tools are being developed to help grow existing Islamic banking markets, as seen in Oman, the UK and Pakistan.

Expert identifies growth path for Islamic finance in #Nigeria

The Senior Director of the African Finance Corporation (AFC) Mr. Banji Fehintola spoke on the Proshare WebTV programme "Islamic Finance Weekly". He emphasised the need for Nigerians to understand the value of Islamic banking, which is geared towards deepening financial inclusion and driving economic prosperity. He commended the Federal Government for taking the lead in adopting the Islamic Finance product in the country. He said that Nigeria has taken a great step in terms of issuing Sukuk, and they are planning to issue the third one. He also added that with time the country will see corporate issuances in the Sukuk space.

HPB strengthens presence in #Indonesia, provides shariah-compliant IT services to Indonesian cooperatives

HeiTech Padu Bhd (HPB) has strengthened its presence in Indonesia with the establishment of PT Desa Tech Nusantara to provide a shariah compliant cooperative Baitulmal Wat Tamwil (BMT) system. HPB executive vice president Salmi Nadia Mohd Hilmey said the project serves all cooperative members and the unbanked across Indonesia with multiple transactional items. A memorandum of understanding (MOU) signing ceremony was held to formalise the collaboration. BMT is a single scalable system in the cooperative ecosystem and has the potential to grow exponentially. Indonesia stands at the top of the Asia Pacific region in terms of unbanked population, as three-quarters of its 250 million people are still outside of conventional financial systems.

Institutionalizing Islamic banking practices

The Philippines's new Republic Act (RA) 11439 or the "Act Providing for the Regulation and Organization of Islamic Banks" allows the Bangko Sentral ng Pilipinas to follow its regulatory mandate for supervision over the operations of Islamic banks, and to issue the implementing rules and regulations on Islamic banking. Currently, the country has only one Islamic bank, Al Amanah Islamic Investment Bank of the Philippines. According to BSP Governor Benjamin E. Diokno, the BSP looks forward to seeing greater participation in Islamic financing by both domestic and foreign banks. This is expected to widen opportunities for Muslim Filipinos in accessing banking products and services.

Islamic banking penetration in the #UAE hits new high

According to the Islamic Banking Index by Emirates Islamic, Islamic banking penetration in the UAE has reached its highest level for five years. The survey showed that three out of five respondents now have at least one Shari’a compliant product. The perception of Islamic banks has improved steadily from 26 percent in 2015, with significant improvements in key areas relating to technology and customer service. However, knowledge or awareness of Islamic banking terminology has not seen clear improvement since 2015. The 2019 edition of the Islamic Banking Index indicates that the sector continues to widen its appeal to an increasing number of both Muslim and non-Muslim customers.

Emirates Islamic: "The time for Islamic banking to come to the forefront of the finance sector is now"

The 2019 edition of the Islamic Banking Index by Emirates Islamic demonstrates significant progress made by the Islamic banking sector. Islamic banking penetration has reached its highest level since the inception of the Index five years ago. The Islamic Banking Index is a benchmark survey revealing the progress, penetration and perception of the Shari’a-compliant banking sector in the UAE. The 2019 edition indicates that the sector continues to widen its appeal to an increasing number of both Muslim and non-Muslim customers. Knowledge of Islamic banking terminology has not seen clear improvement, but has risen for some products, such as Takaful, that have become successful in the financial sector. Perception of Islamic banks has improved steadily, with significant improvements in key areas relating to technology and customer service.

The IFSB database disseminates data for 2019Q2 for Islamic banking systems in member countries

The Islamic Financial Services Board (IFSB) announced the dissemination of country-level data on financial soundness and growth of the Islamic banking systems for Q2 of 2019. This 14th dissemination completes the availability of quarterly data from Q4 of 2013 to Q2 of 2019. This PISIFIs project currently compiles data from Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Libya, Malaysia, Nigeria, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Sudan, Turkey, the United Arab Emirates and the United Kingdom. The PSIFIs Database (full set of data with metadata) is available on the PSIFIs portal at the IFSB website http://psifi.ifsb.org.

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