Latest from GIFC

Friday, 20 January 2017

Islamic finance & management events in Kuala Lumpur Malaysia



CONFERENCES

Date: 14-15 March 2017
Event: KL Conference on Islamic Finance 2017
Event site: www.islamic-finance-conference.blogspot.com

Date: 18-19 April 2017
Event: KL Conference on Shariah & Legal Aspects of Islamic Finance 2016
Event site: www.shariah-legal-islamic-finance.blogspot.com
Register

Date: 16-17 May 2017
Event: KL Conference on Islamic Wealth Management & Financial Planning 2017
Event site: www.islamic-wealth-management.net
Register

Date: 15-16 August 2017
Event: KL Conference on Sukuk 2017
Event site: www.sukuk-conference.blogspot.com

Register


EXECUTIVE WORKSHOPS

Executive Workshop on Islamic Finance & Financial Planning 2017
(One-day program)


Date: 
26 January 2017

16 February 2017

Register

To register or reserve a seat online, please go to:

Organizer: Alfalah Consulting
www.alfalahconsulting.com

How Did Lariba (Riba-free) Start - Dr. Yahia Abdul Rahman

How Did Lariba (Riba-free) Start - Dr. Yahia Abdul Rahman from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Shariah Audit - Dr. Zurina Shafii

Shariah Audit - Dr Zurina Shafii from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

The Law of Inheritance in the Qur’an - Mufti Ismail Menk

The Law of Inheritance in the Qur'an - Mufti Ismail Menk from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Thursday, 19 January 2017

Prospects For The Global Sukuk Market In 2017


Last year, global sukuk issuance fell short of market expectations, although it was higher than in 2015. In an article published today, titled “Will Sukuk Issuance Volumes Beat The Forecasts This Year?,” S&P Global Ratings says it believes the sukuk market will remain subdued in 2017, since the issuance process is still quite complex.

When oil prices started falling in 2014, several market observers predicted an issuance boom from 2015, arguing that governments in oil-exporting countries would tap the sukuk market to maintain their spending levels. However, this didn’t happen. Issuance of sukuk increased only marginally in 2016 compared with 2015, and was even much lower than that of conventional bonds in some core Islamic finance markets.

“The sukuk market did not play a countercyclical role in core Islamic finance markets in 2016, and we forecast a stabilization of total issuance in 2017 at around $60 billion-$65 billion,” said S&P Global Ratings’ Global Head of Islamic Finance, Dr. Mohamed Damak. “We believe the complexity of sukuk issuance will continue to weigh on issuance volumes, unless counterbalanced by tangible results on standardization or the establishment of large issuance programs. Returning issuers, new entrants, and regulatory developments can stimulate activity, but more likely in the medium term.”


They do not foresee a substantial increase in sukuk issuance in the GCC this year; rather, they think some member countries might take the Islamic finance route alongside a conventional one. Bahrain will most likely remain a prominent player after issuing $3.2 billion of Sukuk in 2016. Other GCC members will probably tap the market in 2017.

Source: Wealth Monitor/18 January 2017
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Wednesday, 18 January 2017

How Islamic finance can help address global inequity


By Naser Haghamed, Islamic Relief Worldwide’s Chief Executive Officer
Inequalities in global wealth distribution have never been greater, and innovative approaches are needed to achieve step-change. Just 8 people control more global wealth than the 3.6bn people who make up the poorest half of the world’s population, and nearly 25% of the 1.6 billion Muslims globally live in extreme poverty.
In addition, the scale of the Syrian refugee crises is demanding new approaches to hosting refugees and supporting their long-term resilience and ability to pursue independent livelihoods. As most of the global refugee population is from Muslim majority countries, faith-sensitive solutions need to be considered for measures including the provision of work permits, business ownership rights, access to finance, and regional job creation strategies.
The principles behind Islamic finance, such as the right for all people to enjoy a minimum standard of living, and ethical limitations to what is in the public interest, have the potential to help address many of the underlying causes of global inequity. These principles are at the heart of practices like Waqf (a type of endowment) and Zakat (which requires eligible Muslims to give 2.5% of their wealth to charitable causes annually), and are central to Islamic Relief’s programmes and microfinance initiatives to support those most in need.
In Jordan, the Islamic Relief Waqf is providing sustainable financing for the delivery of assistance to Syrian refugees while supporting host communities. The main impact of the project is to enable vulnerable Syrians to deal with life challenges and become independent. In addition to building trust between refugees and their host communities, economic interventions will be used to create improved community cohesion.
We believe that Islamic finance should not be seen as an alternative source of finance but rather an alternative way of doing finance. To effectively leverage Islamic finance approaches, however, strong links between the formal financial sector and communities is crucial, as well as robust, accountable, and transparent institutions at all levels (local, national, regional and global).
The governments of Malaysia, Singapore and Indonesia have been the most innovative in trying to formalise and facilitate this. For example, Malaysian state investment corporation Johor Corporation created a limited company to monitor and ensure proper management of $55.5 million in shares and investments that it used to launch a Waqf. The fund’s flagship projects target Muslims and non-Muslims alike, and include the provision of healthcare services and start-up capital for microenterprises, as well as funds for disaster relief.
While this example shows the potential of Waqf, in many Muslim communities legal and policy restrictions have often hampered Waqf rather than facilitated its development.
Islamic Relief is supporting efforts to improve the global regulatory environment, with the aim of achieving wider uptake of Islamic finance in the development sector, including:
• A multilateral debt restructuring mechanism within the United Nations (UN) system, as well as increased attention to the debt burdens of low and middle income countries.

• Inclusive, global regulatory mechanisms at the UN level to reduce the harmful impacts of capital flight, taking particular aim at strengthening tax collection systems and restricting illicit financial flows.
We are committed to advocating for the ethical principles of an economy ‘for the common good’ to receive greater consideration in global decision-making forums, such as the World Economic Forum (WEF), and will continue to apply Islamic finance approaches throughout our programmes to demonstrate their effectiveness and generate learnings at an operational level.

For more information on Islamic Relief’s policy and operational work in this area, please refer to our publication Lessons from Islamic finance for socially, economically and environmentally just outcomes in the Financing for Sustainable Development process.
Source: Huftington Post-The World Post/18 January 2017
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Shari’ah Considerations in Structuring Sukuk - Dr Asyraf Wajdi Dusuki

Shari'ah Considerations in Structuring Sukuk - Dr Asyraf Wajdi Dusuki from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

The History and Evolution of Islamic Finance - Iqbal Khan

The History and Evolution of Islamic Finance - Iqbal Khan from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Monday, 16 January 2017

Don’t Let Riba Destroy Your Home - The Dangers of Riba (Usury) - Dr. Muhammad Salah

Don't Let Riba Destroy Your Home - The Dangers of Riba (Usury) - Dr. Muhammad Salah from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Jamal Badawi - buying a car or a house without interest

Jamal Badawi - buying a car or a house without interest from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Introduction to Lariba Banking (Riba-Free/Interest-Free) Banking

Introduction to Lariba Banking (Riba-Free/Interest-Free) Banking from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Islamic Endowment (Waqf) - By Imam Ahmad Shqeirat

Islamic Endowment (Waqf) - By Imam Ahmad Shqeirat from Ahmad Sanusi Husain on Vimeo.

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

What Islam say about Riba (Interest/Usury) - Mufti Ismail Menk

What Islam say about Riba (Interest/Usury) - Mufti Ismail Menk from Ahmad Sanusi Husain on Vimeo.

--- 
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

The Story of Ahmad Dawjee Dadabhoy and Wakf (Islamic Endowment) in Malaysia

The Story of Ahmad Dawjee Dadabhoy and Wakf (Islamic Endowment) from Ahmad Sanusi Husain on Vimeo.


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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Thursday, 12 January 2017

Malaysia considering fund to spur foreign investment in Islamic finance


Jan 12 - Malaysia's securities regulator has proposed establishing a fund to invest in the country's Islamic finance funds and make them more attractive to institutional and foreign investors.
The southeast Asian country has carved out a leading role in Islamic finance. Malaysian asset managers hold 132.4 billion ringgit ($30 billion) worth of sharia-compliant assets - among the largest in the world and comparable to Saudi Arabia - but they have often been overshadowed by a thriving market for Islamic bonds, or sukuk, which are often bought directly by investors.
The proposed fund, part of an Islamic fund and wealth management blueprint launched on Thursday by the Securities Commission, would invest in multi-currency Islamic investment products managed by Malaysian-based asset managers and including equity products, to increase their size and make them more attractive to investors.
The Securities Commission gave no details on the size or timeframe for the launch of its proposed fund, or who would run it and where the money would come from, but a fund acting as a seeder or incubator of Islamic funds would be a first in the industry.
"The Securities Commission is still in discussion with various stakeholders. No decision has been made on who will spearhead the fund yet," a spokeswoman for the Commission said.
The fund could address challenges that Islamic funds have faced in attracting significant institutional money and foreign investors, the Securities Commission said in the five-year blueprint.
"The fund is aimed at accelerating efforts to build the critical mass, establishing channels for international distribution, and supporting innovation and developing market infrastructure for alternative strategies," the regulator said.
Investors from the Middle East are the big investors in Islamic finance but can find Malaysian-ringitt funds less attractive as their portfolios are denominated in U.S. dollars or Gulf currencies that are pegged to the dollar.
Few Malaysian-managed funds are offered overseas but this is starting to change: CIMB Islamic Asset Management, for example, this week launched an Ireland-domiciled dollar-denominated sukuk fund.

Malaysia's Employees Provident Fund is launching a $25 billion sharia-compliant retirement fund this month, which could serve as a boon to asset managers in the field.
Smaller fund managers, however, have cast doubt on whether they would manage any of that money, saying the mandates will probably go to a handful of more established players. ($1 = 4.4560 ringgit) (Reporting by Liz Lee and Bernardo Vizcaino; Editing by Susan Fenton)
Source: Reuters/12 January 2017
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Tuesday, 10 January 2017

Islamic Banking: Challenge To Maintain Leading Growth In A Competitive Market


Islamic banking continues to broaden its reach and is able to compete effectively with conventional banks, supported by an increasing range of products and higher quality ser­vice. Islamic banking assets in the GCC are now worth over $600 billion, and well over $1.1 trillion for the wider region.

In the past, Islamic banks were some way behind their conventional banking counterparts in terms of innovation, technology and service, which are not only important to defend market franchises but are crucial as a differentiator in a competitive market environment. But now many in the Gulf and the Middle East, which have performed well over the last few years, have become early investors in technology, targeting product and service innovation as a central theme of their strategy. Technology is changing rapidly in the bank­ing sector, and the intermediary link between institutions and customers has become less direct as other non-bank players enter the market.

Product innovation and the increasing use of mobile bank­ing and apps are helping Islamic banks in the region to widen their reach to customers, particularly those that were pre­viously un-banked or under-serviced. Technology and product innovation is removing the service and delivery distinction that was present in the past between Islamic and conventional banks. Increasing product launches for Islamic banks are providing customers with a wider range of financing solu­tions that were previously not avail­able, forcing some to turn to conven­tional banking when otherwise they would not. This is helping to support growth in the sector.

Islamic banks in the region are building their activities in key sectors of the economy. Retail banking has traditionally been the mainstay of Islamic banking in the region. Here, investment in digital and smartphone banking will be crucial in future. In the region, attitudes and expecta­tions have changed at a rapid speed due to a young popula­tion that is increasingly mobile and has greater access to media and technologies. According to EY, the boards of most of the important Islamic banks in the region have been generous in sanctioning spend on digital initiatives—between $15 million and $50 million over the next three years—well aware that in­action could cost up to 50% of their retail banking profit in the next few years.

Bahrain-based Gulf International Bank recently launched its retail banking arm in Saudi Arabia—‘meem’. Combining online and mobile banking with physical locations, meem ca­ters to the Kingdom’s increasingly sophisticated retail bank­ing segment. Meem has invested heavily in proprietary IT systems, including complex back-end systems, which increase efficiency and reduce the need to visit traditional branches.

Fast-growing Islamic banks, including Dubai Islamic Bank (DIB), Abu Dhabi Islamic Bank and Noor Bank have always emphasised the use of technology to drive growth and profit­ability. And these banks continue to perform well despite the recent tough operating environment due to low oil prices and weaker growth in the region.

Another major development for Islamic banks in the re­gion is the flurry of capital increases, with Islamic banks build­ing their capital and liquidity bases for Basel III purposes and to support future growth. DIB recently raised AED3.2 billion in a rights issue, oversubscribed by nearly three times.

Other recent issues are Sharjah Islamic Bank’s $500 mil­lion sukuk, Ajman Bank’s AED675 million rights issue, Qatar Islamic Bank’s QAR2 billion Basel III compliant Tier 1 per­petual Sukuk, and Qatar International Islamic Bank’s QAR1 billion sukuk.

In July 2016, Noor Bank celebrated the listing on the Nasdaq Dubai of its $500 million debut Perpetual Tier 1 capital sukuk. In August 2016, Emirates Islamic closed a $250 million tap of its earlier $750 million five-year Sukuk issued in May 2016. Emirates Islamic is enjoying fast rates of growth, aided by new products, including credit cards and a mobile banking app. It is also making strong strides in wholesale banking with its recent financing deal in partnership with Natixis, to close the largest collateralised Murabaha transaction this year.

Despite the sukuk issuance, observers believe the market would grow at a faster rate if it became more standardised. Sukuk issuance is currently more time consuming and com­plex than a conventional bond issue. The IMF has advised GCC governments to integrate sukuk issuance in their debt-manage­ment strategies. The Islamic Development Bank is also working on a new structure that could simplify sukuk issuance.

Regional Islamic banks are looking at opportunities in other markets, both to diversify their footprint and in recog­nition of limited growth potential in domestic markets. DIB aims to expand its geographic footprint through a variety of options including acquisitions, establishing new subsidiaries and branches, and pursuing strategic partnerships with local partners in Asia, Africa and the Gulf. The bank already has a 40% interest in Panin Bank Syriah in Indonesia and Kenya remains a country of interest.

ADIB’s international expansion began in Egypt with the acquisition via a joint venture structure of the National Bank of Development followed by the establishment of Iraq, U.K. and Saudi Arabia op­erations, and it will con­tinue with new operations in Qatar and Sudan. ADIB is in the process of apply­ing for banking licenses in a range of other countries.

The bank is accelerating the development of digital prod­ucts and services for customers to enhance their banking experience. Those include mobile-banking iOS applications that allow a more dynamic customer experience and client relationship management tools from iPads. ADIB has wit­nessed a rapid growth in customers using digital channels, especially through mobile devices. Users of ADIB’s digital banking channels more than doubled in the last 12 months while smartphone transactions increased by 73% in the first half of 2016. The bank also launched a new version of its internet banking platform to create a more convenient cus­tomer experience.

Bahrain-based Al Baraka Banking Group is one of the most geographically diversified Islamic banks. It has a presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Pakistan, South Africa, Lebanon, Syria, Iraq, Saudi Arabia, Libya, and Indonesia as well as in Bahrain. It has recently won official approval to es­tablish a banking unit in Morocco, and is working to complete the establishment pro­cedures.

For Islamic bank­ing, the opening up of Iran is a huge devel­opment. Iranian banks make up the world’s largest financial system based on Islamic law; Iran’s Islamic banking assets total around $500 billion. Despite the size of their assets, most of the Iranian state-owned banks are loss-making entities due to a large stock of non-performing loans.

A large number of sukuk and other Islamic financ­ing issuance from Iran are expected over the next few years. Estimations are that there are over 150 Iranian companies con­sidering Islamic sukuk sales. Iran also requires funds for its infrastructure development programmes estimated at around $1 trillion over the next decade.


Industry projections for Islamic banking are generally positive, driven by the significant unmet demand despite the prevailing macroeconomic and political challenges across the region. Credit expansion in the region has been impacted by the low oil price but Islamic financing has continued to grow. Key public sector corporates and real estate private developers have considerable appetite for Islamic financ­ing both at bank and capital market levels. Retail banking will continue to expand aided by technology developments and, on the wholesale front, large scale corporate financing, project finance and debt capital market deals also represent growth opportunities.

Source: Forbes/10 January 2017
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Thursday, 5 January 2017

Morocco Turns to Islamic Finance


Rabat – Halal credits and Sharia compliant bank accounts are now available in Morocco as the Central Bank and the Ministry of Economy and Finance have authorized the opening of five Islamic banks, referred to as “participatory” banks, according to a press release published this Monday.

No authorizations had so far been granted to foreign banks by Bank Al-Maghrib.
Three conventional institutions will also be allowed to “offer their clients participatory banking products.”
According to the bank’s statement, the legislation has also been modified to allow the High Council of Ulemas, an official authority that aims to support the Islamic religious policy of Morocco, to host a “Sharia Committee for Participatory Finance.”
This committee will be the “only committee that is authorized to issue fatwas on the conformity of the products of the participative finance to the precepts of the moderate Islam,” adds the communiqué.
The central bank did not disclose the launch date of these halal banks in the kingdom, but according to the Mohamed Boussaid, the Minister of Economy and Finance, Morocco must issue the first Islamic financial titles, called sukuks, before mid-2017.
“These new financial tools should contribute to the development of the participatory banks,” Mohamed Boussaid told the MAP, adding that the opening of the 2nd Symposium on Islamic Economics and Finance will be , focused on the “development of long-term financing and Islamic capital markets.”
“These tools also provide alternative solutions for the financing of projects carried out by both the state and the private sector, through the issuance of participating bonds using the securitization vehicle,” the Minister continued.
A promising start
Some of the biggest Moroccan banking groups had filed applications for approval to launch “participatory” subsidiaries, often in association with Islamic banks in the Gulf countries.
Their enthusiasm can be explained by the potential of the sector. According to the American rating company Standard & Poor’s, quoted by Usine Nouvelle, Islamic finance could represent between 10 to 20% of Morocco’s banking system.
According to a recent survey carried out by Reuters, the Islamic Research and Training Institute attached to the Islamic Development Bank (IDB) and the consulting firm Zawya, 98% of Moroccans are interested in Islamic banking products. 43% said they would open bank accounts with Islamic institutions even if halal banking products proved to be more expensive than traditional banking services.
The launch of participatory banks has been delayed several times due to the complexity of the regulatory process. The arrival of these new players should, in any case, result in the opening of 150 to 200 agencies, according to La Vie Éco.
Source: Morocco World News/5 January 2017
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Monday, 2 January 2017

Islamic finance roots grow deeper in Kenya


The Insurance (Amendment) Act 2016 signed into law by President Uhuru Kenyatta last week, is set to enhance Kenya’s position as the premier Islamic financial hub on the African continent.
The move came a week after the Capital Markets Authority (CMA) was admitted by the Council of the Islamic Financial Services Board (IFSB) as an associate member of the board.
“The new law provides for the licensing and regulation of Takaful insurance business in Kenya in order to encourage international investment in this sector, which is a target area for the Nairobi International Financial Centre,” the Insurance (Amendment) Act 2016 reads.
Takaful is a co-operative system of reimbursement or repayment in case of loss, organised as an Islamic or Sharia-compliant alternative to conventional insurance products.
Standard setting
The IFSB, is based in Kuala Lumpur, Malaysia, it’s a global standard setting body, which promotes the development of a prudent and transparent Islamic financial services industry.
It does this through introducing new, or adapting existing, international standards consistent with Sharia principles and recommends them for adoption.
To date, IFBS has issued 26 standards, guiding principles and technical note for the Islamic financial services industry.
The decision to admit CMA was made at the 29th IFSB Council meeting held in Cairo, Egypt on December 14.
In October, the government launched the Islamic Finance Project Management Office (PMO).
The PMO is being overseen by the National Treasury with the technical and financial assistance of Financial Sector Deepening Africa (FSDA), and under the mandate delegated to it by Kenya’s Financial Sector Regulators Forum (FSRF).
The PMO is led by Islamic Finance Advisory and Assurance Services (IFAAS), an international consultancy firm specialised in Islamic finance, in collaboration with Simmons & Simmons, an international law firm.
CMA’s Chief Executive Paul Muthaura said the authority membership in IFSB is a key step towards the development of Kenya as an Islamic finance hub in the East African region, which is a critical component in the establishment of Nairobi as an international financial centre.
“Vision 2030 identifies financial services as a priority sector expected to play a central role and a key facilitator in the achievement of the vision,” said Mr Muthaura.
He added: “The economic pillar has, as one of its main strategies, the broadening of the product offering in the financial markets to both domestic and foreign investors. To help diversify the product portfolio, Kenya has for some time now been laying the foundation for making the country a financial services hub, with one of the focus areas being its emergence as an Islamic financial hub.”
The IFSB’s Islamic Financial Services Industry Stability Report 2016 indicated that, the global Islamic financial services industry reached an overall total value of $1.88 trillion in 2015.
There are expectations of the market size growing to $3.4 trillion by end of 2018, an 81 per cent growth.
In the first half of 2015, the global Sukuk (Islamic bonds) amount outstanding stood at $291 billion, while Islamic fund’s assets figure was $71.3 billion.
During the 11 months to November 2015, the Takaful (insurance) sector was established to be $23.2 billion, while the Islamic banking sector’s assets stood at $1.5 trillion.
Witnessed growth
According to the CMA, Kenya’s Islamic finance market has also witnessed substantial growth over the last few years with several financial sector institutions of Islamic orientation operating presently.
This include two fully fledged Islamic banks and five Islamic windows, two credit union/saccos, one Takaful company, one Retaful window and one Capital Market Unit Trust Fund, as of September 2016.
Mr Muthaura observed that based on the global trends, the Islamic finance industry in the country remains largely untapped considering the significant real economy funding needs, particularly in the infrastructure realm, that are well aligned to Islamic or alternative financing structures.
“As an aspiring Islamic finance hub, with the right facilitative environment, we have a real opportunity to attract investment and capital inflows both from Muslim and non-Muslims locally and internationally,” said Mr Muthaura.
He added: “Kenya is in a unique position and only needs to implement policies that will further facilitate Islamic finance for it to reap the benefits of such efforts.”
The Insurance (Amendment) Act 2016, also enables the operationalisation of risk-based solvency requirements for insurers that were introduced in the Finance Act 2013.
Among those proposals is a requirement that an insurer should maintain a 100 per cent capital adequacy ratio at all times.

Ngunjirij@ke.nationmedia.com
Source: Daily Nation/2 January 2017
--- 
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Hope and despair about Islamic banking in India

A few months ago, reports that the Reserve Bank of India (RBI), the national banking regulator, was planning to introduce rules that would allow banks to start Islamic banking divisions had excited groups that want these type of financial services in India.
Islamic banking is run on religious principles that consider the taking and giving of interest as sin. Customers earn returns on investments through equity, lease rents and dividends. India does not have norms for such services. According to the promoters of this kind of financial service, scriptures of other religions, including Christianity, Judaism and Hinduism, mention the taking and paying of interest as wrong. 
This column had reported that a major public sector bank had announced that it will start a division that will provide interest-free banking. Those hopes have now died down. Last month, Chandrakant Khaire, a Shiv Sena Member of Parliament (MP), submitted a plea during zero hour in the Lok Sabha opposing an “Islamic window” in the banking system. 
Syed Zahid Ahmad of Mumbai-based Economic Initiatives, a group that has been campaigning for interest-free banking products, said that Khaire’s views are important because he is a member of the Standing Committee on Finance. Khaire, incidentally, represents Aurangabad, an area with a high proportion of Muslim residents. 
Khaire’s doubts about interest-free banking largely comes from a misunderstanding that borrowings are free of cost. “If the RBI allows banking without interest, Muslim youth will benefit; where will Hindus go?” said Khaire. “Banking should not be done in the name of religion. There should be a discussion on the subject before such facilities are introduced.” 
The campaign to promote Islamic banking received another jolt when the minister of state for finance, while replying to a question in the Lok Sabha on December 9, said that though Islamic finance was explored by the RBI as one of the ideas for financial inclusion, other schemes like Jan Dhan Yojana and Suraksha Bima Yojna worked too. The minister said that the RBI had set up an inter-departmental group on Islamic banking and the aims were, apart from promoting financial inclusion, to attract finance from Gulf countries for infrastructure development. However, the idea was not accepted as various legal changes would be required. 
H Abdur Raqeeb, convenor, National Commitee on Islamic Banking and general secretary, Indian Centre for Islamic Finance, said that the discussion on interest-free banking was made much before the programmes. “We are very disheartened because the RBI has given a road map for interest-free banking.” 
Raqeeb, who recently wrote to two MPs for the revival of the SBI Shariah Fund, said that the RBI’s agenda for the financial year mentioned an alternate system of interest-free banking. “This is to mainstream people who are away from banking because of religious reasons,” said Raqeeb. 
Ahmed said that the statement by the minister has not been welcomed by Muslims who want interest-free banking and finance in India. “Since the RBI’s recommendations about interest-free banking was made after thoroughly analysing the significance of PMJDY for financial inclusion, it is dubious that schemes like PMJDY will help ensuring financial inclusion of Indian Muslims,” Ahmed said. 
Muslims are not well represented in the banking business. They form about 14% of the country’s population, but the Rajinder Sachar Committee which reported on their social, economic, and educational conditions, estimated that their share of bank deposits was 7.4% in 2005; they took just 4.7% of the loans. But they need better access to finance. The report said that 20.5% Muslim workers are in manufacturing, compared to 12.4% among Hindu upper castes. The wholesale and retail trade employs 16.8% of Muslims and 13.4% of Hindu upper castes. More Muslims are involved in the transport and communication business than Hindus. The National Sample Survey Office survey on debt and investments in 2013 reveals that a smaller proportion of Muslims operated a bank account compared to Hindus and other religious groups. 

Ahmad suggested that if the government is reluctant to pass new norms to allow Islamic banking, banks should allow micro-equity – an arrangement where customer buys into the bank’s ownership and enjoys a share of the profits.
Source: Hisdustan Times/2 January 2017
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