Business Recorder

MLCFL repays Rs 8 billion Sukuk loan ahead of time

Maple Leaf Cement Factory Limited (MLCFL) Monday paid Rs 8 billion Sukuk loan much earlier than scheduled. The company has been able to pay off much earlier than scheduled, its entire Sukuk loan of Rs 8 billion in the third quarter of the current financial year, said Muhammad Ashraf, MLCFL's company secretary, in a stock filing Monday. The payment, he said, was made against the agreed repayment schedule till December 2018. Improved profitability, better cash flow, cost curtailment initiatives and efficient financial discipline made it possible to repay the debt in advance.

Standard Chartered Saadiq enhances offering

Standard Chartered Saadiq has announced to enhance its offering for clients looking for Shariah-compliant banking products and services. The enhanced Saadiq product suite includes Home Finance with fixed pricing for up to three years so the clients can benefit from prevailing low market rates and the Saadiq World Miles Credit Card. In order to address the needs of its business banking clients, Saadiq has also launched a new product: Saadiq Business Term Finance, a Shariah compliant solution for clients to manage their business expenditures by availing financing against their existing property.

SBP introducing fixed rental rate Ijara Sukuk

The State Bank of Pakistan (SBP) has introduced three-year Fixed Rental Rate Government of Pakistan (GOP) Ijara Sukuk (FRR-GIS). Presently, Variable Rental Rate GOP Ijara Sukuk (VRR-GIS) is being auctioned and its rental rate is being fixed every three months on the basis of Market Treasury Bills' cut-off yield. However, on the request of Islamic Banking Industry, SBP has decided to launch Fixed Rental Rate GOP Ijara Sukuk for market development. The rental rate decided in the auction will be applicable to the entire tenor of FRR-GIS and will be paid to FRR-GIS holders on semi-annual basis. Minimum bid size will be Rs 100,000 and in multiples thereof. Rental rate (% p.a.) has to be specified up to a maximum of two decimals points.

SBP to set up Shariah-compliant open market

The deputy governor of the State Bank of Pakistan has announced that the bank is setting up a Shariah-compliant open market to manage liquidity of the Islamic banking sector. Deputy Governor, Saeed Ahmed's announcement came on Wednesday as he addressed the global forum on Islamic economics, banking and finance arranged by the University of Management and Technology's Institute of Islamic Banking and Finance. In his speech, he reiterated his bank's commitment to promoting and developing the Islamic banking in Pakistan. The existing banking laws are being amended and soon this process will be finalised, he said. Those who too addressed the forum were Islamic finance scholars Mufti Muhammad Taqi Usmani, Justice Khalil-ur-Rehma, among others.

IBA establishes Centre for Excellence in Islamic Finance

Institute of Business Administration (IBA) announced the establishment of the Centre for Excellence in Islamic Finance at IBA. IBA has launched IBA-CEIF in collaboration with Meezan Bank and Dr Ishrat Hussain will be Chairman CEIF, while Irfan Siddiqui, CEO Meezan Bank Ltd, Hassan Bilgrami CEO BankIslami Ltd, Shafqaat Ahmed CEO Al Barkah Bank Ltd, Junaid Ahmed CEO Dubai Islamic Bank, Dr Imran Usmani, Shari'ah Advsior Meezan Bank Ltd, Samar Hasnain Executive Director, Development Finance Group State Bank of Pakistan (SBP) and Ahmed Ali Siddiqui, Founding Director of CEIF, are founding members of Board of Management (BoM).

Talking to newsmen here on Friday at IBA city campus, Dr Ishrat Hussain, Chairman CEIF, said that the Center had been set-up with the objective to bridge the gap between trained human resource and industry's growing requirement. He hoped that IBA-CEIF will play a vital role for providing skilled and qualified workforce to the Islamic Banking Industry of Pakistan. On the occasion Ahmed Ali Siddiqui, Founding Director of CEIF and Dr Zeeshan was also present.

BMA Funds signs trust deed for Islamic income scheme

BMA Asset Management Company Limited (BMA Funds), a non banking finance company, formally signed the trust deed for its forthcoming Islamic income scheme, BMA Minhaj Islamic Income Fund at CDC Pakistan. The event brought together the representatives from CDC, trustee of the BMA Minhaj Islamic Income fund, and the senior management of BMA Asset Management Company Limited.

Following the same trend of leadership, BMA Minhaj Islamic Income Fund will offer a unique one of its kind scheme for investors who wish to benefit from the equity market and at the same time seek capital appreciation that adheres to shariah principles. It primarily aims to generate superior risk adjusted returns to earn a stable halal income over medium to long term by investing in fixed income instruments present in Pakistan debt market.

KPCCI to constitute Islamic banking body

Khyber Pakhtunkhwa Chamber of Commerce and Industry (KPCCI) have announced to constitute an Islamic banking standing committee. The announcement was made by KPCCI president, Faud Ishaq while speaking at a seminar on 'Islamic banking and Takaful'. Faud Ishaq said the proposed committee will play vital role for provision interest-free banking facilities to business community as per Islamic code and sharia. He urged the Central bank to take measures for promotion of Islamic banking in Khyber Pakhtunkhwa. KPCCI chief expressed satisfaction over 30 to 40 per cent growth in Islamic Banking by State Bank of Pakistan during last six years across the country.

Al-Karam Group-led consortium bids for 14 percent BankIslami stakes

A local consortium led by Al-Karam Group has offered to buy the 144.20 million shares of BankIslami Pakistan Limited (BIPL), which the bank's majority shareholder, Dubai Bank PJSC, tends to sell. The potential acquirer of BIPL's shares came in the limelight after Wednesday's stock filing of Jahangir Siddiqui and Company Limited (JSCL) in which the company disclosed that Dubai Bank PJSC had offered it, along with another shareholder of BankIslami, the saleable 14.3 percent stakes of BIPL. The Dubai Bank was bound, under the Founding Shareholders' Agreement it had signed with JICL and other stakeholders, to first ask, through issuing first refusal, the existing stakeholders if they wanted to increase their shareholdings in the bank.

Islamic capital market: SECP plans Shari'ah compliance regulations

The Securities and Exchange Commission of Pakistan (SECP) is in the process of preparing shari'ah compliance regulations for the Islamic capital market. The SECP has chalked out a comprehensive plan for the development of the Islamic capital market in the country. Under the future plan, the SECP will introduce new products for Islamic capital market. The commission would also create awareness on the Islamic capital market. Besides, the SECP is planning to introduce shari'ah audit mechanism. The commission would also adopt new accounting standards on Islamic finance issued by Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The SECP will launch webpage of Islamic finance department for education, promotion and development of Islamic finance.

First Islamic property fund of subcontinent: over Rs 22.23 billion Dolmen City REIT launched

The first Rs 22.237 billion Islamic rental property fund of the subcontinent was launched at Karachi Stock Exchange (KSE) Monday. The two-day book building process for the country's first Rental Real Estate Investment Trust (REIT), Dolmen City REIT (DCR), was initiated by Sindh Finance Minister Murad Ali Shah here at KSE trading hall. The initial public offering (IPO) envisages a total of 555.92 million units, 75 percent or 416.94 million shares would be offered to institutions and high net worth individuals (HNWIs) through book building on June 8-9. The balance 138.98 million or 25 percent units would go to retail subscribers on June 12.

Abu Dhabi Islamic Bank may expand Tier 1 sukuk issue by $2-3bn

Abu Dhabi Islamic Bank will ask shareholders for permission to expand its existing Tier 1 sukuk issue, originally sold in 2012, by $2 billion to $3 billion, it said in a bourse filing on Thursday. The increase is subject to regulatory approval, the Abu Dhabi lender said. The Abu Dhabi lender will also ask shareholders to vote to increase the bank's capital by 168 million dirhams ($45.74 million) through a rights issue.


MCBAH appoints Shariah Supervisory Board

MCB Arif Habib Savings and Investments Limited ("MCBAH") has announced that it has appointed a Shariah Supervisory Board under the Chairmanship of former Justice Mufti Muhammad Taqi Usmani for their existing as well as future Shaiah Compliant Mutual Funds, Voluntary Pension Schemes (VPS), Administrative Plans and Shariah Compliant Investment Advisory Mandates. Other members of the Shariah Supervisory Board are Dr Muhammad Zubair Usmani and Dr Ejaz Ahmed Samdani. Apart from advising MCBAH on Shariah matters, the Shariah Board will give expert guidance in introducing and implementing new investment models and products based on international Shariah research.

Depositors of former KASB Bank start transactions with Bank Islami

State Bank of Pakistan informed that the amalgamation of the defunct KASB Bank into Bank Islami Pakistan Ltd has been implemented smoothly. As a result all the depositors which are over 150000 in number and have Rs 57 billion in deposits are free to operate their accounts. Many of them have already started operating their accounts and more than 1200 employees have continued their jobs, a statement of SBP said. An important issue is the notional value at which the defunct bank has been handed over to BankIslami. Following international practices, a notional value of Rs 1000 was set for the defunct bank. BankIslami has planned to gradually transfer the defunct bank's conventional banking operations into Shariah based operations.

We are clear market leaders in home financing: Pervez Said, Managing Director, House Building Finance Company

Pervez Said is no stranger to adversity. In his 33 year-long career, he has worked with 10 different organizations, having served as chief executive at four different institutions. He is considered to be the pioneer of Islamic banking in Pakistan due to his instrumental role at the State Bank of Pakistan in the formative years of Islamic banking. But his current stint at the House Building Finance Company may well be the biggest challenge he has taken on yet. You can find excerpts from a recent interview in which Said discussed the housing crisis in Pakistan and the role HBFCL is playing in alleviating it following the article link.

Oil products' insurance: scope of investigations expanded to two more companies

The Federal Investigation Agency (FIA) has expanded the scope of its investigations to two more insurance companies and detained three persons in a case that involves a huge embezzlement on account of oil products' insurance. FIA has taken into custody three persons and has also identified two more persons. The insurance companies had entered in a deal with one of the biggest oil refineries in 2002 to insure oil consignments imported in Pakistan. In this deal, insurance companies had earned a commission Rs 152.39 million at a total premium of Rs 950.23 million and these companies in order to conceal this earned amount withdrew the same through various cheques of 170 fake agents.

Islamic capital market: SECP envisages roadmap for restructuring, reorganisation

The Securities and Exchange Commission of Pakistan (SECP) has envisaged a roadmap for restructuring and reorganising the Islamic capital market. The initiative aims at the promotion of Shariah compliance in the capital market of Pakistan. The roadmap entails centralisation of the Shariah-related capital market activities, introduction of uniform Shariah Regulation for the takaful, modarabas, Islamic mutual funds, Islamic pension funds, Islamic REITs, other Islamic financial institutions (other than banking), Shariah compliant (Non-financial) Companies, Islamic products and instruments.

Iranian bank sues UK government for $4 billion over sanctions

Iran's Bank Mellat is suing the British government for almost $4 billion in damages after the Supreme Court quashed sanctions imposed against it over alleged links to Tehran's nuclear programme. The lender wants compensation for the "significant pecuniary loss" and substantial reputational damage it sustained as a result of sanctions imposed in 2009, according to a claim filed in London's High Court. It claims the UK government also successfully lobbied other authorities to impose their own sanctions that ultimately caused and continue to cause the loss of profitable business, customers, banking relationships and dealing services.

Regulating Islamic finance market: SECP sets up specialised department

To regulate and develop the Islamic financial market, the Securities and Exchange Commission of Pakistan (SECP) has established an Islamic Finance Department. The new specialised department shall carry out the functions of Shariah regulation and compliance, product development, market awareness, Shariah securities market development and international liaison and networking. The Islamic Finance Department will act as a backbone for co-ordination between the SECP's operational departments with the primary objective of regulating and promoting Islamic finance and Shariah compliance in the capital market. Out of Pakistan's total Islamic financial assets of over Rs 1.7 trillion, around 40 percent assets are directly or indirectly regulated by the SECP.

Dar reiterates government’s resolve to switch over to Islamic banking

Pakistan's Minister for Finance, Muhammad Ishaq Dar, Friday reiterated the government's resolve to switch over from conventional banking to Islamic banking and finance to enhance shariah compliant assets. Dar said that Pakistan has taken several steps to promote Islamic banking and finance in the country, such as issuing sukuk bonds in international markets as well as forming a steering committee which was actively working on the development of reliable database and human resource needed by the Islamic banking. The industry now constitutes over 10 percent of the country's financial system but needs trained human resource in order to realize the true market potential, he added.

Capital Adequacy: Al Baraka Bank complies with Basel III requirement

The General Council for Islamic Banks and Financial Institutions (CIBAFI) held an In-focus session on Basel III and Islamic banks during the 21st World Islamic Banking Conference (WIBC) in Bahrain. The three prominent Islamic banks, Islamic International Arab Bank, Al Baraka Banking Group, and Bank of Khartoum, showed that they currently have sufficient levels of capital, far beyond what is required under Basel III. Al Baraka Banking Group's recent issuance of Tier-1 Basel III-compliant Sukuk in Pakistan reflects the Group's desire to adapt positively to the dynamic nature of regulatory regimes in the years ahead rather than any shortage of capital.

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