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Friday, 24 February 2012

Zeti cautiously upbeat on prospects for Islamic finance industry in Malaysia

The issuing of three mega Islamic banking licenses in Malaysia; starting the implementation of the new Financial Sector Blueprint (FSBP) 2011-2020 including Islamic financial inclusion and microcredit and the internationalization of Malaysia's Islamic finance industry; and helping the International Islamic Liquidity Management Corporation (IILM) launch its first sukuk as part of an ambitious issuance program, are just some of the priorities for Bank Negara Malaysia, the central bank, and its experienced Gov. Zeti Akhtar Aziz in 2012.
Gov. Zeti is under no illusion about the challenges facing the Islamic finance industry going forward and the impact the global financial crisis and the euro zone sovereign debt crisis continues to have on the industry.
"The Islamic finance industry," explained Zeti at a recent briefing in Kuala Lumpur "was insulated from the first round of the crisis (the global financial crisis). Islamic financial institutions (IFIs) are more resilient because they are closely linked to the real economy, with in-built checks and balances such as profit-sharing and risk-sharing. As such, there are greater elements of responsible lending. As economies slow down and financial markets experience a correction, these will impact financial institutions including IFIs. That is why it is important to have capital buffers, risk management and governance practices that are sound. We are continuing to develop mechanisms, institutional arrangements and financial infrastructures such as greater liquidity management and more so that the Islamic finance industry would continue to be resilient."
On the other side of the stakeholder coin, Bank Negara considers financial inclusion, microcredit and the financing of small-and-medium-sized enterprises (SMEs) as an important agenda. "We are also focusing on financial services outreach including mobilization of deposits from the lower income groups. Microfinance and microtakaful are also part of this. Our new Financial Sector Blueprint has a whole section on new measures that we will put in place to enhance financial inclusion mostly through outreach programs but also through institutional arrangements such as agent banking. We have also gone in a very major way into financial education and literacy to raise the level starting from the schools to factory workers and housewives on how to manage your finances," she explained.
The Malaysian Islamic banking industry indeed has shown impressive and steady growth over the last decade - growing from 6 percent in 2001 to 22 percent of the banking sector at the end of 2011. The previous Financial Sector Master Plan 2000-2010) has targeted a 20 percent market share for the industry, but the new Financial Sector Blueprint is careful not to include any performance or market share targets. Instead the aim according to Zeti is consolidation of the achievements thus far and achieving the various recommendations outlined in the blueprint.
Bank Negara is also processing three applications by foreign promoters for so-called mega Islamic bank licenses which would have a minimum paid-in capital of $1 billion each.
"The applicants for the Islamic megabank licenses are still in the process of fulfilling all the necessary requirements for licensing under the Islamic Banking Act 1983. Assessments will thereafter take place which, upon satisfactory fulfillment, will be recommended for the granting of license by the minister of finance," confirmed Zeti.
Banking sources stress that there is a timeframe for these institutions to meet all the conditions and that the applications will be resolved during 2012. None of the three promoters are from the West which rules out any of the remaining major global banks which do not have an Islamic banking license in Malaysia. The investors according to the sources are from the GCC countries.
The sukuk and Islamic capital market is an important component of the Malaysian Islamic finance industry. As such, the Malaysian government keen to boost the country as a multi-currency origination center. Already Khazanah Nasional Berhad, the Malaysian sovereign wealth fund, has issued a US dollar sukuk, a Singapore dollar sukuk and a Chinese renminbi sukuk in 2010 and in 2011.
Zeti is a keen supporter of the IILM and expects the first sukuk issuance by the corporation within the next 6 months. "The IILM," she revealed, "is currently obtaining the required rating, as well as fulfillment of all other parameters for the issuance including high quality underlying assets. The first issuance, which is a pilot issuance, will be relatively small, designed to test the system and to ensure that it is functioning as intended. Subsequent issuances are expected to be larger, more regulated in the range of $2 billion to $3 billion per issue and will be in major currencies."
The corporation's sukuk program is designed to be high quality short-term liquidity instruments and therefore demand will probably be generated from other institutions and managed funds such as pension funds etc. as it is another asset class that would be attractive as a liquid instrument. "During this crisis we saw liquidity becoming an important issue. The internationalization of Islamic finance and greater cross-border transactions require effective short-term liquidity management not only in stressful conditions but also in normal times," she added.
The IILM issuances are expected to play a major role in liquidity management in the global Islamic finance industry. At least that is the ambition. In conventional finance, it is US Treasury bills that are highly traded for liquidity management. For Islamic finance, there are no sovereign short-term debt issuances or papers of that nature. But whether the IILM sukuk can effectively play the role of US Treasury Bills only time will tell.
Zeti, however, believes that the IILM, which is a collaboration between 10 central banks and two multilaterals, has come out with something concrete, which will be an important financial infrastructure for the development of Islamic finance. "Given collaboration between central banks that come from different parts of the world that also include Europe, Middle East and Asia, it has required a consensus building on all the issues. Compared to other collaborations, I believe this IILM is a great achievement," she added.
She welcomes any move by European sovereigns to enter the euro sukuk market. Several of the European countries including the UK, France and Luxembourg have introduced enabling legislation to facilitating sukuk such as tax structures. This has been a major step forward. "They are currently focused on conditions that are highly challenging, therefore it is very difficult. Of course if there were a sovereign issuance out of the euro market, we would certainly support it. I have always encouraged our sovereign issuances which has contributed depth to the market. This, despite the fact that we have many domestic sukuk issuances, and therefore liquidity in the market. We have decided that it is also important to have a number of international issuances. It certainly contributes to creating a benchmark yield curve," explained Zeti.
The euro zone sovereign debt crisis has impacted on economic growth including in Malaysia and in the rest of Asia. She predicts that "all of us will experience a moderation in growth across the board, but to a much lesser extent than ten years ago. We in Malaysia have domestic demand which is more significant in our economy. We have a stronger domestic economy. We have strength from our regional trade and investment activities. This has had a mutually reinforcing effect on our economies. We also have resilient financial sectors that are still providing credit. We also have low unemployment and have not over-leveraged."
Asked if Malaysia will take the great leap forward by adopting a Shariah-compliant monetary policy she stressed that the country has already implemented liquidity management operations whereby Shariah-compliant instruments are used to manage the liquidity in the Islamic financial system. Bank Negara issues short-term instruments to manage liquidity by absorbing or releasing the liquidity into the system.
(Arab.News, 15 Jan2012)

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Turkey's government plans its first-ever issue of Islamic bonds this year

ISTANBUL, Feb 22 (Reuters) - Turkey's government plans its first-ever issue of Islamic bonds this year, overcoming sensitivities about Islamic finance in the secular republic as it seeks to tap a rich pool of investors flush with oil money.

A sovereign sukuk issue from an economy regarded as one of the most progressive and successful in the Muslim world would signal intent on Turkey's part to play a bigger role in Islamic finance. The size of the global sukuk market is estimated at more than $100 billion.

"It will be like ringing a bell and attracting all the attention," said Murat Cetinkaya, deputy chief executive for treasury at Kuveyt Turk, an Islamic bank that has been a trend-setter for corporate sukuk issues in Turkey.

"Other issuances will follow the sovereign and Turkey will be on the agenda in this market a frequent issuer."

Despite espousing Islamic values, Prime Minister Tayyip Erdogan's government shied away from taking the plunge with a sukuk issue during its first decade in power, out of fear of giving ammunition to critics who accuse the ruling AK Party of seeking to roll back state secularism by stealth.

"For a few billion dollars of funding there could be negative results in domestic politics," said a deputy chief executive at a leading Turkish bank, who declined to be named because of the political sensitivity of the subject.

In 2008, the Supreme Court came close to shutting down Erdogan's AK Party after ruling it was a centre of Islamist activity. But since then, the government has won the upper hand over old foes in the military and judiciary.

Few Turks question the AK Party's economic management, and having overseen a near tripling in per capita income, the party was re-elected for a third term in office last June.

Moreover, even borrowers outside the Islamic world have entered the sukuk market in the last few years, giving less reason for Turkey to hold back.

"Now the sukuk has become an instrument that even Germany and France are using," the banker said. "And in domestic politics, Erdogan is much stronger."

So there was hardly a murmur of dissent when Deputy Prime Minister Ali Babacan, who oversees the economy, announced last month that the government planned to issue a sovereign sukuk this year, using legislation already in place.

"Turkey could very easily issue a couple of billion dollars worth of sukuk. It will probably issue $500 million or $1 billion at first and see how it goes," said Osman Akyuz, secretary general of the Participation Banks' Association of Turkey.

"An issuance by the Treasury would provide depth to the instrument and it will be sold with confidence."

Royal Bank of Scotland economist Timothy Ash, a Turkey watcher, was also upbeat. "The market is potentially big - guess the sovereign could easily raise several billion."

Islamic finance bans the use of interest, so theoretically, investors in a sukuk acquire partial ownership of an asset and share in its returns rather than receiving a stream of coupon payments.


Although the sukuk market is tiny compared to the trillions of dollars of conventional international bond issuance, sukuk have been a relatively stable source of funding during the global financial crisis because of their conservative Islamic investor base.

Because of secular sensitivities, Islamic banks are called "participation banks" in Turkey and sukuk are referred to as "participation certificates".

The country has used Islamic finance methods since the late 1980s through private financial institutions that were recognised as participation banks in 2006. There are four participation banks now operating in Turkey: Albaraka Turk , Bank Asya, Kuveyt Turk and Turkiye Finans. Kuveyt Turk, a unit of Kuwait Finance House, issued the country's first sukuk in 2010.

Last October, following legislative changes to accommodate sharia-compliant transactions, Kuveyt Turk issued another sukuk for $350 million, and the strong demand demonstrated Turkey's potential to become a major fresh source of Islamic bonds for investors keen to diversify their portfolios.

Albaraka Turk, the Turkish unit of Bahrain's Albaraka Banking Group, and Bank Asya have formulated plans for sukuk issues of as much as $500 million, but have so far held back because of weak market sentiment globally due to the European debt crisis.

Despite that, the Turkish economy's buoyancy, which produced growth of over 8 percent last year, and high yields compared to other emerging markets have increased investor appetite for Turkish assets, including sovereign debt issues.


Ratings agency Fitch said last month that plans by sovereign borrowers outside the Middle East and other largely Islamic regions to tap the sukuk market could meet pent-up demand from Islamic institutional investors and banks to diversify their bond holdings.

That is good news for Turkey as it needs backing for huge infrastructure projects, having run into difficulties due to an international financing crunch. The government was forced to cancel a tender in January for the North Marmara Motorway Project, which involves a highway looping north of Istanbul and includes construction of a third bridge across the Bosphorus strait dividing Turkey's European and Asian sides.

In April, the government will launch a fresh tender, and some bankers see the sukuk market providing a possible solution to the financing problem.

"Turkey needs investments and the sovereign sukuk could be used for financing of some projects, especially the third Bosphorus Bridge and highway projects," said Akyuz of the Participation Banks' Association.

Not only could a sukuk be specifically designed for the project, according to Is Investment Strategist Ugur Kucuk, it would also pull in investors who want to avoid international capital market volatility.

"A sovereign sukuk issue which is indexed to revenues to one of the Bosphorus bridges, or to some highway revenues, could be both attractive for investors and for the Turkish Treasury doing its first issue," said Kucuk. (Editing by Simon Cameron-Moore and Susan Fenton)
(Reuters, 22 Feb2012)
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Russian-Led Development Bank Plans to Expand Islamic Financing

MOSCOW, 29 Rabi al-Awwal/22 Feb.(IINA)-Eurasian Development Bank, a Russian-led lender backed by six former Soviet republics, wants to expand Sharia-compliant financing, Chief Executive Officer Igor Finogenov said.
“Islamic finance is an opportunity for us to enter new credit markets,” Finogenov told reporters in Moscow recently. “We hope it will allow us to diversify our liability base.”
The bank is looking to boost lending that complies with Islam’s ban on interest after serving as mandated lead arranger for a $60 million syndicated Murabaha facility for Kazan, Russia-based AK Bars Bank in September. The Almaty-based development bank was founded by Russia and Kazakhstan in 2006 and also includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan.
“We’re a Eurasian bank, and many of our member countries are in areas that are traditionally close to Islamic culture,” Finogenov said. That raises “the possibility of finding projects that meet the criteria required for Islamic finance.”
(IINA,  22 Feb2012)

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Islamic Microfinance: A Model for Alleviating Poverty

Islamic microfinance is becoming an increasingly popular mechanism for alleviating poverty, especially in developing countries around the world. The Islamic finance industry as a whole is expected to reach over $2 billion dollars in 2012 and is a continually growing sector due to its ethical principles and prohibition of riba (interest).
The concept of Islamic microfinance adheres to the principles of Islam and is a form of socially responsible investing. Investors who use their wealth for Islamic microfinance projects only involve themselves in halal projects which benefit the community at large. Such projects include zakat, which is charity based, or trade and industry projects to develop a country's economy.
The mechanism of lending in Islamic microfinance differs from conventional microfinance due to the prohibition of riba. Unlike conventional microfinance, Islamic microfinance offers an interest-free way to give small loans to people who are poor and in need. One key method of lending is through the Islamic financial instrument, qard'l-hasan, which is a loan that has been extended by the lender on a goodwill basis and the borrower is only required to pay the exact amount borrowed without additional charges or interest. The Quran clearly encourages Muslims to provide qard'l-hasan, or benevolent loans, to “those who need them”:
“Who is he that will give Allāh qard'l-hasan? For Allāh will increase it manifold to his credit.” (57:11) “If you give Allāh qard al hasan… He will grant you forgiveness.” (64:17)
At a time when poverty is still prevalent around the world, there is no better solution than opting for funding which can provide benefits to a poverty-stricken community and help to rebuild economies.
Islamic microfinance gives the investor a chance to get involved in worthwhile projects which could essentially play a significant role in targeting poverty and alleviating it in many countries around the world. Islamic microfinance primarily relies upon the provision of financial services to the poor or developing regions which are subject to certain conditions laid down by Islamic jurisprudence. It represents the merging of two growing sectors: microfinance and the Islamic finance industry.
It has the potential to not only be the solution for an increased demand to help the poor  but also to combine the Islamic socially responsible principles of caring for the less fortunate with microfinance's ability to provide financial access to the poor.
Unleashing this potential could be the key to providing financial stability to millions of less privileged people who currently reject microfinance products that do not comply with Islamic law.
Many regions around the world have already created tailor-made Islamic microfinance programs, either through Islamic banks or Islamic microfinance institutions to cater for dealing with poverty.
Abdul Latif Jameel Company Community Service Programmes (ALJCSP) in the Middle East has utilized Islamic microfinance applications such as qard'l-hasan in order to provide financial support and empower low income women in the UAE so that they can endeavor to improve their standard of living.
Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking, said in a statement that, “In the wake of the current financial crisis all around the globe, Islamic microfinance has gained even more importance due to its transparency and sustainability. Islamic microfinance becomes an effective tool for poverty alleviation.” (Micro Finance Africa).
Utilizing Islamic financial instruments such as Murabahah and Musharaka to help in facilitating Islamic microfinance can not only spur the Islamic microfinancial sector but can also increase the options of Islamic finance and make it more accessible to poverty stricken countries.
While poverty in the Muslim world is widespread, Somalia is shouldering more than its fair share of the crisis. The famine which hit Somalia in July 2011 resulted in the worst food crisis that Africa has faced since 20 years. The United Nations had confirmed that famine does exist in two regions of southern Somalia, Southern Bakool and Lower Shabelle. Across the country, nearly half of the Somali population, which is currently 3.7 million people, is now experiencing a crisis of food, poverty, shelter and malnutrition.
However, if the population of Somalia had more access to financial services then they would be able to develop their economy and get it back on track. Unfortunately, the options of financial services for alleviating poverty in East Africa are either inadequate or exclusive.
Islamic microfinance has been an unprecedented way to combat poverty which may also provide the affected people of Somalia with a form of economic relief and provide a financial solution to developing countries worldwide.
(MuslimMatters, bTasnim Nazeer, 21Feb2012)
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GCC urged to follow unified Islamic finance regulations

The Gulf Co-operation Council (GCC) should have a unified rule under one regulator for Islamic investment products for ensuring lower cost of funds, according to Islamic Wealth Management (IWM) Report 2012.

“The GCC countries could take a leadership role by establishing standards for the registration of Islamic investment products with one regulator,” the Bank Sarasin report said.
The report was launched by Bank Sarasin managing director and head of Islamic Finance Fares Mourad and Monzer Kahf, a leading Islamic finance scholar.

Such unified rule would allow asset managers to market the product to clients across the region, it said.

Currently any offering needs to comply with different regulations in Bahrain, Kuwait, Saudi Arabia, Oman, Qatar and the UAE, resulting in a lengthy and expensive registration process, the report said. “Reducing expenses and increasing the availability would increase competition, benefiting local investors and further the GCC’s development as a centre of excellence for Islamic finance.”

Although unified rules could be done either a state, region or Arab league level, it would be better to have a centralised agency that could interpret the legislations regarding Shariah investments, Mourad said.

Asked whether there was a need for a separate entity for the regulation and supervision of Islamic investments and products, he said “I really would like to have this” but it was for the regulators in the respective jurisdictions to decide.

Kahf said the Islamic Financial Services Board could take the lead in the centralised agency as it consisted of central bankers in the Muslim countries. “Once you have such an agency, there is no need for separate Shariah boards as lawyers specialised in the field could suffix its role,” he added.

The report also took note of the constant criticism of certain Islamic finance structures such as the ‘Tawarruq’, which involves purchasing a commodity with deferred payment and selling it to a third party for cash, hence replicating the effect of a loan.

“Regulations need to be adjusted to allow financial institutions to engineer products that fit the spirit of Islam while meeting legal and regulatory requirement,” it said.

In this regard, the report cited an example of recent co-operation between the halal industry (mostly foodstuffs) and Islamic finance – two sectors with similar goals that have had little contacts.

With issues related to the environment and social practices as well as corporate governance getting more attention, it said there has been more reporting on corporate social responsibility, which is important to Islamic finance.

(GulfTimes , 21 Feb2012)
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Libyan Foreign Bank Rolls Out Islamic Products as Rules Change

Feb. 21 (Bloomberg) -- The Libyan Foreign Bank will offer Shariah-compliant products as the government prepares regulation to make Islamic banking the norm in the North African nation following the ouster of Muammar Qaddafi.
“Islamic products are being introduced and will predominate, but we will not relinquish the use of traditional banking,” General Manager Mohamed Ben Yusef said in an interview today in Tripoli. “A decision will be made by the Central Bank of Libya by the end of March to introduce a new article in the banking law regarding Islamic governance.”
Shariah-compliant finance may reap the benefits of regime changes in North Africa, where protests last year toppled three leaders who persecuted Islamists. While Muslims make up about 95 percent of North Africa’s 220 million people according to the CIA World Factbook, access to Shariah-compliant financial services remains limited as past leaders, including Qaddafi, held back the industry’s growth to curb the influence of Islamic parties.
Mustafa Abdel Jalil, the chairman of the National Transitional Council that lead the rebellion to topple Qaddafi, said Oct. 23 that the country’s banking industry should comply with Islamic law, which bans interest. Central Bank Governor Saddek Omar Elkaber on Nov. 24 said the government will honor bank licenses issued during Qaddafi’s era, including one given to Qatar Islamic Bank to start the only Shariah-compliant lender in the country.
“We are a traditional society so we are looking for products that are ethically and morally comfortable; we think that Islamic banking can re-energize the industry and move our economy forward,” Ben Yusef said.
The Libyan Foreign Bank, a fully owned unit of the central bank, is the biggest bank in Libya in terms of capital and assets, he said. Paid capital was $3 billion and total assets were $18 billion at the end of January.
(BloombergBusinessWeek, 21 Feb2012)

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Sarasin releases Islamic Wealth Management Report 2012

In its 2012 Islamic Wealth Management Report, "The path to corporate transformation - converting a company to Islam", Bank Sarasin reviews the complexities of converting a business to Islam, a topic which is rarely discussed or written about.  Conversion is complicated by the need to address every aspect of a business, the lack of broadly accepted standards and regulations, and differences in the Muslim world itself. The Report, released today, is the Bank's third on Islamic Wealth Management.

Converting a business to Islam can increase the value of a company by 18-25% due to the scarcity of genuine Islamic investments.  But the conversion process is arduous, extending from the design to distribution and beyond, to how the company spends its profits.  As Sarasin notes, the market potential is massive, with the global Muslim population expected to increase by 26% to 2030, to 2.2 billion, rivalling China and India in terms of market size.  The Muslim market segments in India and China alone are larger than some countries' populations, estimated at 140 million and 40 million respectively.  Demographics are also compelling, with 43% of Muslims under the age of 25.    

Fares Mourad, Head of Islamic Finance, Bank Sarasin & Co. Ltd
"Questions from an Omani businessman sparked this report.  We found there was almost no information on this topic, so, with the benefit of our practical expertise given our unique Islamic Wealth Management services, we wrote this Report.  We're providing our clients and other investors with much needed information and advice.  As Muslims become an increasingly important segment of the global economy, the conversion of a company to Islam will become a greater issue - for entrepreneurs, executives and investors."
Conversion also involves social, political, and financial risks.  Extra costs may be associated with Sharia compliance, since a religious audit is required.  Marketing is also complex, given the differences in interpretation of Islamic law and observance by Muslims globally.  Beyond market factors, governance, legal and financial implications must be considered.   

Sarasin calls for unified GCC regulations

The Report also calls for the GCC (Gulf Cooperation Council) to take a leadership role by establishing standards for the registration of Islamic investment products with one regulator.  This would allow asset managers to market products to clients across the Gulf without the lengthy and costly registration process now required since products must now comply with different regulations in Bahrain, Kuwait, Saudi Arabia, Qatar and the UAE.  The Report notes the leadership demonstrated by Malaysia, not only in terms of Islamic finance, but with regard to halal production.
The report also reviews:
  • Developments in Islamic Finance in 2011
    • Progress was made, driven by vigorous underlying trends.  Volume, geographic reach and quality all increased in 2011.
  • What asset classes should be held by families
    • Family wealth needs to be reviewed from the perspective of non-bankable and bankable assets to ensure a secure and productive mix of assets.  The word "productive" may not refer to returns, but to the purpose served by bankable assets.
  • The resurgence of the Sukuk market in 2011 and opportunities in 2012
    • The Muslim investor gained halal alternatives to conventional bonds as yields surged.  Market size increased almost 45% to USD 180 billion.  Volumes are expected to increase, with new issuers and those who delayed in 2011 coming to the market in 2012.
  • The lack of alternative investments for Muslim investors
    •  Options are limited by Sharia considerations, with futures not allowed and Muslim investors continuing to disdain hedge funds despite approval by many scholars.
  • Islamic equities' performance in 2011
    • While most Islamic indexes fell in 2011 many outperformed conventional indexes because Islamic criteria screens out most financial stocks.  As an example, the Dow Jones Islamic Market Pakistan Index, while down 1.06%, beat the conventional Dow Jones Pakistan Index by more than 16%.  Muslim investment criteria may lower risk.
  • The legal complexities of converting a business to Islam, contributed by law firm Al Tamimi & Company
    • The structure of business arrangements, investments and debts, and licensing must all be reviewed, with a Sharia board or consultant overseeing compliance

(Bank Sarasin & Co. Ltd, 2012)

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Oman’s CMA to favour standalone Takaful companies over windows

Oman’s Capital Market Authority (CMA) has revealed to The Times of Oman that it will favour standalone Takaful companies, which is against the window operations proposed for conventional banks.

"It looks like CMA may not allow window operations  (of conventional insurance firms), rather allow standalone companies because conventional insurance is completely different from Takaful insurance. Most of our advisors are in favour of a separate entity," Abdullah bin Salem al Salmi, Acting Executive President of Capital Market Authority, told Times of Oman. He added that the minimum  capital for promoting a Takaful insurance company is envisaged at OMR 10 million.

Times of Oman reported al Salmi as saying that a conventional insurance company planning to enter  a Takaful business must to seek a separate licence and form a separate company. "It will be a separate 
entity altogether.we also require them to have aShari’ah  board consisting of three members," he said.

However, this is dependent on a report from Clifford Chance, which isreviewing the current rulesand regulations and will advise whether the country needs a separate set of regulations for accommodating Islamic products or only amendments to the existing rules. The report is expected by the end of March.

(Times Of Oman, 19Feb2012)
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Yemen plans to issue Islamic bonds (sukuk)

Sana'a:  Yemen plans to issue Islamic bonds soon to finance government projects, Central Bank Governor Mohammad Awad Bin Humam said in an interview.
"We have plans with the Finance Ministry to issue Islamic bonds to finance government projects and other sukuk," Bin Humam said in a telephone interview from Sana'a.
"We will try to do so as soon as possible."
Middle East and Asian governments are turning to local sukuk investors to finance infrastructure projects as European lenders reduce overseas exposure amid the region's sovereign debt crisis. Global issuance of sukuk, or Islamic bonds, increased to $84.5 billion in 2011, a 64.5 per cent rise on the previous year, S&P said in a report this month.
Unrest last year cost Yemen more than $8 billion, former Industry and Trade Minister Hisham Sharaf said on November 13.
Bin Humam said Yemen's foreign reserves now stand at $4.6 billion, down from $5.9 billion in December. "We used the money to finance petroleum products, government services and to buy wheat, flour and sugar," he said.
Yemen's outgoing President Ali Abdullah Saleh will cede power this week after he signed a Gulf-brokered accord to end his three-decade rule.
As part of the agreement, the vice-president for the past 18 years, Abdurabu Mansur Hadi, is running uncontested in an election this week.
The World Bank forecast that Sana'a will be the first capital city to run out of water by 2025.
More than half the country's population of 23 million is under 20 years old and about 40 per cent of the people live on the equivalent of less than $2 a day, according to the United Nations.
(GulfNews, 20Feb2012)

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