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Saturday, 14 November 2009

Switzerland Joins Islamic Banking World

CAIRO – Switzerland became the latest Western country to join the booming Islamic finance system, offering a full range of Shari`ah-compliant banking products and services, reported Qatari daily The Peninsula on Friday, November 13.
“We are proud to be the first Swiss private bank to offer such a holistic range of opportunities in Islamic finance to the (Middle East) region and on a global scale,” Fidelis M Goetz, Head of Banking Division at Bank Sarasin, told a press conference in the Museum of Islamic Art in Doha.

The bank would offer a full spectrum of Shari`ah-compliant banking products and services for clients.

This includes Murabaha “sale on profit”, Wakala “fiduciary agreement between two parties” and Maraya “an Islamic structured product that is based on Murabaha or a series of Murabaha transactions”.

“The launch of our Islamic wealth management offering reflects our commitment to serving the diverse needs of our clients,” said Goetz.

Islam forbids Muslims from usury, receiving or paying interest on loans.

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Transactions by Islamic banks must be backed by real assets -- not shady repackaged subprime mortgages.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.

Booming Market

The Swiss bank, a leading private bank with a broad international footprint, hopes to get a share of the booming Islamic finance market.

“We have perceived in the past couple of years that we have been in the region real interest for these services,” Goetz said.

Islamic finance is one of the fastest growing sectors in the global financial industry.

Starting almost three decades ago, the Islamic banking industry has made substantial growth and attracted the attention of investors and bankers across the world.

"We are extremely delighted that the global launch of our Islamic products is taking place in the Middle East,” said Rohit Walia, Executive Vice Chairman & CEO, Bank Sarasin-Alpen Group, Middle East and South Asia.

Nearly 50 percent of the Islamic finance market is situated in the Gulf region.

“Islamic Finance is a fast growing concept in the region,” said Walia.

“Many of our clients have expressed interest in Islamic Wealth Management and we are very happy to offer the suite of Islamic products to meet their requirements.

“I am sure this will also add to our already strengthened position in the region."

A long list of international institutions, including Citigroup, HSBC and Deutsche Bank, are going into the Islamic banking business.

Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.

“Ultimately our aim is to operate on a global basis,” said Fares Mourad, Managing Director, Head of Islamic Finance at Bank Sarasin.

“But what we are doing is a step by step approach.”


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