First Islamic Finance pilot tentative by Bank of Ningxia

Recently, the Ningxia Bank Chairman Lu Suping become even more busy than ever before. Because, the CBRC and other related ministries has been preliminarily identified in the Ningxia Islamic finance banks to develop a pilot. In fact, as early as late last year, Ningxia Hui Autonomous Region People’s Government has sought from the relevant ministries on the Ningxia Islamic financial services start-up experiments, including the build up “the Islamic Bank of China” work. China Banking Regulatory Commission has repeatedly leaders concerned to exchange views with the relevant ministries.

Ningxia Bank pilot “through multiple communication and coordination of Islamic finance pilot projects in Ningxia ideas eventually gained support of all sectors.” Ningxia Banking Bureau told a reporter.

Since the beginning of Ningxia CBRC began to someone of Islamic finance principles and advantages, and characteristics of specific products, accounting systems, national regulatory experience, the profile of Islamic finance, as well as Islamic financial business conducted in Ningxia, a pilot feasibility analysis and other aspects conducted a preliminary investigation, the formation of a survey report.

This reporter learned that, at present the report and has been submitted to the CBRC and the Ningxia autonomous region party committee and government. In March 2009, Ningxia Autonomous Region has set up a local government as executive vice chairman of Qi Tong-sheng, head of Ningxia, the Secretary as deputy head of the CBRC, the relevant units are responsible for man-made member “of Ningxia Islamic financial business, where corporate banking pilot project leading group “to coordinate related work forward. China Banking Regulatory Commission in the creation of the Islamic finance the research team dedicated to research how to conduct Islamic financial business, and doing a good job related to supervision and other issues.

One source told reporters, according to the general comments of various regulatory authorities, Ningxia banking division will be the window system or form of Islamic banking Islamic finance to carry out the pilot.

It is reported that the pilot-scale for how many the authorities has been several disagreements. Because of the risk considerations, China Banking Regulatory Commission finally decided to carry out pilot projects in Ningxia banks, and so the pilot mature gradually expanded.

We have not yet constitute a particularly mature program. The initial plan is to set up an Islamic branch, the branch in full accordance with the Islamic architectural style of decoration, bank also hired a devout Muslim, in their operations to comply with the teachings of Islam, specifically for the local Muslim service . “Lusu Ping told reporters.

For the preparation of the pilot, Lusu Ping told reporters, Ningxia has jurisdiction over 34 bank branches and a sales department.

After years of development has become a good corporate governance structure and risk-control mechanisms and ability to cope with the risks of financial innovation.

In addition, Ningxia Hui bank employee 200, accounting for 13% of line staff; row-level leadership, the proportion of Muslim leaders also reached 12%. The Muslim staff for the provision of Islamic finance, human resources and support provided.” She. Turning to prospects, Lu Suping said that Ningxia is the country’s largest Muslim enclave, was abroad, as China’s “Muslim province.

Bank of cashmere industry, the Rongchang cashmere industry, the Eastern Colored finance companies, such as floods and river bridge halal food company in the local economy, an influential Muslim businesses are in Ningxia and bank customers.

The future, if trials are successful, Ningxia and banks will be gradually extended to other districts of Islamic financial services throughout the Northwest Territories. Local CBRC people will carefully noted that the current experimental work still more difficult. For example, the Islamic financial services that go beyond the “Commercial Bank Law” and other laws require licensing.

The Islamic financial business transactions in kind (such as real estate) based on the transfer of assets, involving duplication of tax issues such as preferential tax policies need to win and other related supporting policies and facilities for experimental work, which in the country belong to the more difficult issues.

In order to understand the operation of Islamic banks, in July in Ningxia Autonomous Region Government, the China Banking Regulatory Commission and Ningxia banks will form a delegation to visit Malaysia, the United Arab Emirates, the international Islamic financial services regulation and the specific operational areas such as inspection.

Despite many difficulties, Lu Suping said that the earliest experimental work is expected to be ready before the end of the year. Financial crisis of the Harbor In fact, with the gradual evolution of the sub-prime crisis, the financial tsunami, the whole world had applied to the structural stability of the Islamic financial system, extending an olive branch.

Islamic finance is a special kind of financial system.

In accordance with “the Koran”, “Hadith” and the teachings of Islam, Islamic financial institutions operate strictly follow the prohibition of interest, to prohibit speculation, to prohibit investments in the teachings of Islam does not allow the principles of the industry and has specialized agencies abide by the teachings of financial institutions and carry out supervision . Of its financial products corresponding to physical assets, income or rental income is designed to profit-sharing. Reporter has learned that the global financial crisis, due to Islamic financial institutions not involved in financial derivatives trading, has maintained relatively low financial leverage ratio, so better to avoid the risks.

At the same time, Standard Chartered, HSBC, Calyon Bank and other multinational financial institutions have in recent years to expand its Islamic financial services.

Prior to this, Hong Kong has first proposed the idea to build center for Islamic finance. And in November the same year released the first sale only to retail investors in Islamic funds.

In the same year in August, Hong Leong Bank Hong Kong Monetary Authority approved by the Hong Kong market launch of the first Islamic banking window. Early in March of this year, KMT Central Committee conference on the CPPCC National Committee on China’s “development of Islamic finance” proposal. The reporter learned that, Ningxia Autonomous Region Party Committee, the Government has intention to Yinchuan, China’s mainland to build an Islamic financial center.

Ningxia in 2009, the government work report, the proposed plan to fight Islamic bank was founded. Ningxia Banking Bureau told reporters that the Islamic financial services through pilot projects, to join the Islamic financial organizations can contribute in Ningxia and the international Islamic financial community in developing the Islamic financial products and facilities, and Ningxia and the Islamic countries, regional economic and trade cooperation.

In the case of future conditions, you can also choose an issue or Islamic bonds, Islamic investment funds, invested in attracting the international capital of Ningxia.

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