Tajikistan Offers Opportunities In Construction, Islamic Banking

Tajikistan, currently undergoing massive redevelopment, is offering investment opportunities for Malaysian companies, particularly in construction and Islamic banking. TM International Tajikistan’s general director Abdurazzok Abdulloev said the country was currently going through rapid development in terms of infrastructure, especially in the major cities.

“Most of our construction projects were stopped back in 2000 and started to pick up only in 2004, (so) we need a lot of expertise in that industry,” he told reporters at the “Seminar in Doing Business with Tajikistan” here Friday.

Abdurrazzok is among 21 trade delegates from Tajikistan who are in Malaysia for the 10-day incoming buying mission which started yesterday.

Tajikistan, a land-locked country, shares a common border with China, Pakistan, India and Afghanistan.

With a population of 7.5 million people, the country has recorded a gross domestic product (GDP) of US$15.5 billion as to date.

On Islamic banking, Abdurrazzok said banks in the country were exploring opportunities to set up Islamic banking window.

Malaysia is seen as a role model in Islamic banking due to its vast experience in managing and developing the industry for over 20 years, he said.

Currently, trade between Malaysia and Tajikistan is “quite small”, he added.

Tajikistan’s main partners for both imports and exports are Russia, China and Uzbekistan.

Total exports to Tajikistan stood at US$1.6 billion in 2008 which covered aluminium, electricity, cotton, gold, fruits, vegetable oil and textile.

The country imported petroleum products, aluminum oxide, machinery and equipment, and foodstuff.

source : afk

AL Amanah Islamic Investment Bank of the Philippines relaunched

AL Amanah Islamic Investment Bank of the Philippines, a subsidiary of state-run Development Bank of the Philippines (DBP), inaugurated its newly refurbished Makati branch on Wednesday night which, according to officials, signaled the “rebirth” of the country’s first and only Islamic bank.

Located at the ground floor of the Orient Mansion building, Tordesillas Street, Salcedo Village in Makati City, Al Amanah is looking to become the mainstream Shariah bank in the country, the operations of which fit with Islamic law.

Shariah financing prohibits the collection and payment of interest. Islamic banks make money through profit-sharing agreements with corporate borrowers, or by buying tangible or intangible assets and reselling these to clients for profit, instead of lending money directly to them. They take deposits for “safe-keeping” purposes.

Now with a fresh capital of P1 billion from DBP, Al Amanah is licensed to do both commercial and investment-banking services, similar to a universal bank. It was re-established in 2000 to help in the economic development of the Autonomous Regions in Muslim Mindanao (ARMM).

The bank was formed as the Philippine Al Amanah Bank in 1973 by virtue of Presidential Decree 264. In 1990 Republic Act 6848, otherwise known as the Charter of Al Amanah Islamic Investment Bank of the Philippines, was signed by then-President Corazon Aquino, giving birth to the first Islamic bank in the country.

The bank, however, failed to take off the ground mainly because of its lack of expertise and the lack of public awareness in Islamic banking.

In 2007 DBP completed its buyout of a 70-percent stake in Al Amanah, with the deal raising its stake in the Islamic bank to 80 percent.

DBP, which had acquired shares previously held by other government institutions, including the Social Security System and Government Service Insurance System, now fully owns the bank, which offers deposit products denominated in peso and US dollar.

Al Amanah, headquartered in Zamboanga, is now focused on the banking needs of ARMM governments and intends to offer financing assistance mainly for infrastructure projects, according to chairman and CEO Armando Samia.

“We’ve been allowed by the Bangko Sentral to do conventional banking for the next five years,” he told reporters.

The bank, he added, is looking for a partner from the Middle East or Malaysia that will inject additional capital and help promote Islamic banking in the Philippines.

Another option to beef up the bank’s capital is to negotiate with rich Islamic countries for financial assistance, with Al Amanah acting as a conduit bank for development projects particularly in the ARMM, or issue Sukuk (Islamic) bonds, Samia said.

Samia said his goal was to make the bank profitable by next year, after a projected net loss this year.  He did not specify the bank’s projected net loss in 2010, and said it may break even next year.

The bank currently has eight branches in Mindanao, specifically in Cotabato, Cagayan de Oro, Davao, General Santos, Iligan, Jolo, Marawi and Zamboanga.

The bank never stopped operating, but has suffered from sluggish operations, mainly because the general public was not aware of its existence.  The bank is open to the public, regardless of religious orientation.

source : business mirror.ph

Guidance note on shariah compliant funds issued – Malta

A guidance note for shariah compliant funds has been issued by the Malta Financial Services Authority.

The note explains how the legal and regulatory framework established under the Investment Services Act would apply to shariah-compliant funds established under Maltese law.

The MFSA stated that Malta’s principles-based regulatory regime lays emphasis on the disclosure of all information that the investor needed to know before taking the investment decision and on the transparency of investment management process itself.

This allowed a high degree of freedom on the choice of investment strategies and asset allocation policies adopted by investment funds, subject to conditions that varied according to the level of experience and investment expertise of the target investor.

On this basis, the note establishes that, whether set up as professional investor funds, undertakings for collective investment in transferable securities (Ucits) or non-Ucits retail funds, shariah funds may be regulated in the same manner as non-shariah funds.

The level of disclosure and the applicable conditions would be the same as those that were applicable to the respective category of retail or professional funds.

The guidance note requires that funds presenting themselves as shariah compliant were required to disclose all the relevant details in this respect in the fund prospectus or offering document as well as in their financial statements as part of their ongoing obligations.

The note explains the role of the shariah Advisory Board in relation to that of the fund manager to ensure that the financial soundness of the manager’s decisions was not conditioned by non-financial considerations.

It was, however, also the manager’s responsibility to ensure that the fund satisfied the relevant shariah principles and requirements as disclosed in the offering document.

The note may be downloaded from the MFSA website under securities/guide to regulation.

source : timesofmalta

Islamic Finance Possibilities in Macedonia

Discussion with Milan Adzievski

 Forum: Explain what the wider study “SUKUK – Muslim bonds free of interest?

 Shukarov: study “SUKUK – Muslim bonds free of interest” special attention paid to the differences between conventional and Islamic banking, but not putting the emphasis on the religious basis of Islam, but only to highlight the economic effects are obtained with these interesting financial structures.  Primary motive to start work on this project was the absurdity of the movements of financial markets in the world.  The traditional understanding that higher yields (about the same risk) do not increase demand for certain financial instruments becomes illogical when it is known that sukuk structures do not offer any guaranteed return (interest), and the world financial markets, the demand for them is becoming greater.  That was enough to interest them.  South East European University in Tetovo accept financing, formed a team that I led after two years, issued a final product – a project in which even suggest that it would be good in Macedonia to apply this approach to development financing.

What are the basic principles on which rests sherijatskoto understanding of economic life?

Sharia as a system of moral norms pays great attention to economic relations.  Particularly interesting is that the points allowed and illegal activities that must be followed.  For instance, implies the equivalence of the exchange.  Of course this is nothing new, it is based and the conventional economy.  However, interest has deformed the basic economic principle.  The difference is just in time.  Time no one owns and can not be charged.  Neistovremenata exchange causes and possible spatial displacement.  All this makes a problem when used bezvrednite, paper money as a universal tool razmensko.  Also, Sharia encourages business with the division of risk, entrepreneurship, respect for property rights, transparency and accountability, holiness of contractual obligations, discourages speculative behavior.  Particular attention is paid to the ethics of work, distribution of wealth, social and economic justice, responsibility towards community members, creating public goods.  But zagovara and a whole range of restrictions: unethical transactions with goods and services, ban on collection of interest (neekvivalentna exchanges), making debts, negotiate with some uncertainty of the outcome, deals based on gambling, trading, and any mediation with debt agreements , Forward foreign exchange contracts, etc..

From which sources its own Islamic banking revenues cover operating costs and revenues for salaries and benefits?

Islamic banking, as well as any other business should create earnings which cover their costs and profits.  Islamic banking does not create interest income, but because they create all other nekamatni income: commissions, differences in pricing, payment, and, most importantly, achieved sales revenues of deals.  Like any trader, Islamic banks invest in different business activities on its own behalf and for its own account.  Of them earn, but only if there is profit.  They do not earn profits from previously established, but the realized gains and monetizirana.  Therefore no impact inflatorno.  It is interesting that this currency is designed to be neinflatorno and that the Sharia years before 1400, when they were not known today risky financial innovations and speculations that have great influence on everything pozachestenite financial crises.

Several large banks in the U.S., Britain and Germany started using Islamic banking principles.  Is it possible tend to expand quickly in Macedonia?

Usually that Islamic finance is included in the Islamic countries, but has significant emissions of securities which are based on Islamic principles and Western countries (Britain, Germany, USA), even some of the major banks opened their specific banks that operate exclusively implementing the Islamic financial principles, even if each transaction check with AAOIFI, specialized accounting and financial organization of the Islamic financial organizations.  We study found that no legal obstacles to begin operation of the bank of this kind.  However, under our law, each bank must obtain consent for its established by the Governor NBRM.  Problems can arise because in our banking apply the principles of conventional banking Deposit and may appear and dilemmas and psychological barriers of nature.  Otherwise, it works with banking capital and deposits of citizens and companies holding payment, which means that subject to commercial risks and should be supervizirano like any other bank.  If, however, is organized as a kind of open investment fund, then apply another regulation and supervision.

Despite the differences, if there are similarities between the classical and Islamic banking, and who are they?

There are many similarities between conventional and Islamic banking.  The biggest difference is that no interest.  All other activities are similar.  Islamic banks in the basis function as investment banks that collect deposits, or a large part of the assets related to its own investment deals.  Partly deals Partnership (Mudarabah, Musharakah), leasing (idzhara), intermediate securities (sukuk), and even deals that are made to ensure future trade deals (price + expenses) which is largely just like interest agreements or dolgovno based structured arrangements.  If you follow the complex forms of derivative instruments that exist in conventional banking, you can find many similarities with many Islamic financial instruments.  That is why today largely pays attention to the similarities may be provided as soon as more liquidity to the Islamic, yet new financial markets.

 What are the known relevant data on the total profits of the banks in Macedonia in 2008  and commented that amounts, in particular factors that generate these numbers?

 In Macedonia, the latest information on the operations of the banks that they feel the adverse impacts of the financial crisis.  Banks reduce their profits.  Only a few banks, marking a loss of its operations in 2008  The crisis in Macedonia is mainly manifests in the real sector and the banks can not remain immune to it.  Deposits are reduced, hence the credit activity is reduced.  However, at a time when export activity dramatically decreases, while imports decline, but with less pace and doznakite abroad are broken, there is a problem of the large trade deficit and current account deficit and, as a result, international reserves of the country drastically reduced.  Trade deficit in first quarter amounts to 620 million euros, which speaks of the possibility of achieving a record deficit that would have exceeded two billion euros.  Unfortunately, now feel and razbranuvanja and market crude oil prices which, while it would complicate the problem of foreign currency liquidity in an even greater extent.  That’s why the National Bank pursued a policy of expensive money to reduce pressure on menuvachkiot market withdrawal and already smalenata foreign currency liquidity.  They use banks, so marking revenue and costly and bezrizichni treasury bills which emits National Bank to sterilized the excess liquidity denar.  Thus be extracted considerable financial potential of the real sector and the more complicated situation at him, he just should withdraw development and to mitigate the consequences of the crisis.  One reason for the complex financial situation in Macedonia is nekolkugodishnoto transfer credit activity to the household (consumption), rather than to the economy (supply).

Are they, and past bank statements, are the result of just a bank check or policy question for crack usury?

Additional problem of the banking sector in Macedonia is the high degree of existence monopoliziranost causing high prices for low quality of banking services.  I would not like to use the term “crack usury,” but the interest rates on loans are extremely high.  Especially high when considered zero inflation, which makes them extremely realistic high neprimerno for this time of financial crisis and the crisis of the real sector and the huge unemployment.  It is clear that this is partly a result of pressure that makes the offer of public financial instruments bezrizichni high rate of return (9%), but is also partly due to the economy’s inability to create new value in times of crisis that will alimentira significant public expenditure.  If public and private consumption is not reduced, will be reduced or interest rates, which is the main condition for reviving the economy, which would be necessary at least at the time when I noticed the first signs of the revitalization of the global economy, not only to the full landing planned budget.

Source  : forum.com  trsld

First Islamic exchange to be launched in London

The first electronic trading platform allowing Shariah-compliant companies to raise cash will launch in London in May, the venture capital firm behind the project said yesterday.

The Shariah Ummah Securities Information Exchange (Umex) is designed to provide a platform to companies with a capital value of at least £20mn ($31mn) and looking to raise the equivalent of at least 20% of their market value.

Mahesh Jayanarayan, chairman of Halal Industries, which will manage the exchange said it would operate as a Multilateral Trading Facility (MTF).

MTFs are low-cost electronic trading platforms created after the Markets in Financial Instruments Directive (MiFID) opened up exchanges to competition.

It would be the only MTF in Europe so far to help companies raise funds.

“Having been through its early days, it is now time for the Islamic banking and finance sector to strengthen and expand the industry infrastructure to ensure sustainable global operations,” said Sheikh Hussein Hamid Hassan, the scholar heading the exchange’s Shariah panel.

“Umex has lined up 10 Islamic Enterprises and over a 100 Shariah compliant securities to be traded when it goes live,” said Jayanarayan.

He said the exchange planned to bring “over a 100 global Islamic enterprise IPOs within a year from May.”

Shariah Umex will also offer the Islamic version of American and global depository receipts, the Islamic Shariah Depository Receipt (ISDR).

ISDRs represent ownership of a number of shares issued by a Shariah-complaint or Islamic firms traded on a foreign stock exchange.

A senior market practitioner, who declined to be named, said the MTF would need high trading volumes to succeed.

“Is it better for Islamic funds to trade among each other? If not, there is no real advantage to start a specific MTF, because any Islamic fund could buy or sell the same stocks on more liquid venues,” the source said.

The exchange will operate two platforms, one to be launched in May to list small caps, the second to be launched in the third quarter for established Islamic companies with a market in excess of £50mn.

source : the gulftimes

Islamic banking seeks foothold

Islamic banking executives have a proposal for their bonus-addled Western counterparts: Take a look at our model.

Beyond interest-free banking — a prospect that would likely win few proponents in London or New York — executives from the world of Islamic finance argued at a conference yesterday that world markets weary of excessive risk and wealth imbalances should welcome ethical standards of investment based on religious tenets of fairness and transparency.

But they warned that the industry also needed to get its own house in order, by streamlining existing fragmented regulation and coming up with new products.

Some of the executives meeting for the ninth annual Islamic Finance Summit in London believe that the sector has already missed an opportunity in the current turmoil, by failing to seize the moment quicker to extol the benefits of investment that is based on the “real economy.”

Islamic banking, which conforms to Shariah, or Islamic law, forbids charging interest and requires deals to be based on tangible assets, providing some insulation from credit turbulence. Speculation is banned, as is dealing in futures, and risk is shared.

For many, that provides a contrast with the speculation and out-of-control risk-taking that contributed to the current global turmoil.

“In the midst of this global financial chaos and dangers, advantages lie between the real economy and the financial sector,” said Mohamad Nedal Al Chaar, secretary general of the Accounting and Auditing Organization for Islamic Financial Institutions. “A new financial system is emerging, it is the Islamic finance and banking system, because where we are today is a consequence of the compounded greed of individuals, institutions and nation states.”

That prospective hesitancy underscores a key problem facing the Islamic banking sector: a lack of understanding of its complex tenets, which is not aided by the diversity of rulings on what’s allowed by Muslim scholars across different jurisdictions.

“We still remain highly fragmented,” said Mukhtar Hussain, global chief executive officer of HSBC Amanah.

“The industry needs less discussion and more action, and more coherence with what it wants to achieve at a global level, not a local level,” he added.

Islamic finance currently represents around 2 percent of global financial assets, or $820 billion, but it is growing at an average of 28 percent annually.

The British government has supported the flourishing industry and there are now scores of Islamic banking institutions in London offering products including home loans and commercial investment structures to the country’s 2 million Muslims.

There is also an expectation that Britain will become the first Western government to issue a sovereign Islamic bond, or sukuk, which confers to investors a proportional ownership of an underlying physical asset as well as the income that it generates.

source : capcodetimes

A Islamic Banks agrees to fund the bulk of airport expansion

AN ISLAMIC bank will provide more than £19 million towards the expansion of Southend Airport.

The Bank of London and the Middle East announced yesterday it would loan £19.1million in development finance to the Stobart Group, which owns the airport.

It comes two days after the Government announced it had given final approval to the decisions made by Southend Council and Rochford District Council to allow the runway extension to go ahead.

The 300m runway extension is the key part of the £35million development of the airport, which was bought by Stobart in December 2008.

The loan – about two-thirds of the total cost of the transformation – will fund some of the work, including the diversion of East-woodbury Crescent, and the building of a new £12million rail station.

Alastair Welch, managing director of the airport, said: “This announcement is part of our plan to ensure the Stobart group is well funded and, more specifically for us, to ensure the airport’s potential is realised.”

The bank said its funding would help develop the airport as a distribution gateway as well as opening up new European routes to increase passenger numbers from 42,000 to 2 million by 2020.

Based in the City of London, the Bank of London and the Middle East describes itself as the biggest Islamic bank in Europe and London’s leading bank which is compliant with Islamic Sharia law.

Humphrey Percy, the bank’s chief executive, said: “Eddie Stobart is an iconic, well-established UK brand with a strong track record, and represents an ideal candidate for our corporate banking services, both now and in the future.

“The core objectives of Stobart group correspond with the principles of the bank – transparency, partnership and service.

“Stobart is growing and expanding, and the bank is looking for innovative market leaders such as the Stobart Group to develop with.”

Ben Whawell, chief finance officer of the Stobart group, said he was “delighted to partner with the bank for the further development of London Southend Airport, enhancing its position as the eastern gateway to London.”

He added: “We look forward to seeing the completion of this exciting project that, in addition to servicing the 2012 Olympics and Paralympics, will have a long-term beneficial impact.”

Stobart aims to open the runway and terminal in 2011 and the station, on the London Liverpool Street line, this summer.

source : southendstandard

Islamic Bank: Global asset worth 750bn US dollars

The global asset of Islamic banking industry has been estimated at 750 billion United States dollars, an Islamic financial expert and Chief Executive, Metropolitan Skills Ltd, Abuja, Hajia Ummahani Amin, has said.

She spoke in Kano at a workshop entitled: Fundamentals in Islamic Finance Workshop for International Islamic Economics and Management of Sciences Project. She observed that the quoted estimate above is without some major Sukuk issues and structured deals, which analysts estimate will run into trillions of dollars in the years to come.

She explained that Islamic banking practices have taken root in the Middle East and Malaysia, while adding that Europe and North America have recorded giant strides in offering Shariah acceptable products in an attempt to satiate an ever-increasing demand for interest-free banking and profitable returns that fall within the parameters of the Islamic law.

She maintained that the quest for Islamic banking is currently moving towards the African continent, pointing out that, at present, only a handful of countries in the continent have an effective Islamic banking infrastructure even though the scope of the section is immense.

She noted that, “in Nigeria, the banking system is about experiencing a proliferation of Islamic banks as the Central Bank of Nigeria is about to introduce new measures that will encourage and facilitate the existence of Islamic banks.”
She argued that Nigeria has an approximately 50 per cent Muslim population, adding that providing a banking framework that would be acceptable to their belief system would not only increase the bankable population but would bring about the benefits of social responsibility and economic empowerment.

She noted that the integration of Islamic Economics has been successfully implemented in Islamic schools in South Africa in the last two years while adding that Kenya, Tanzania and Mauritius have expressed interests in its implementation. She urged the Federal Government, which she said had taken interest in this project, to introduce the Islamic Economics in the educational policy of the country.

source : sunnewsonline

Consolidation seen amongst takaful companies

The Islamic insurance industry, known as takaful, is seeing more interest in consolidation as companies face increasing competition, weak market penetration and a higher expense base than conventional counterparts

The financial crisis is also putting pressure on smaller and mid sized companies to consider merging with another company, said Hisham Solaiman, financial manager at Kuwait based National Takaful Insurance Co.

He said: “We’ve had offers for two mergers at our company but after some negotiations, we decided against the deal,” adding that National Takaful Insurance wasn’t actively looking to merge, but was open to discussions when approached.

Experts say that discussions are increasingly common with many international players also looking to enter the takaful space.

Peter Hodgins, partner, Clyde & Co, said: “Most weeks I have conversations with international insurers eager to break into the insurance market here.”

The company advised RSA Insurance Group’s acquisition of Oman’s third largest insurer Al Ahlia, for $49.35 million in February.

He added: “It’s fairly early on in discussion but there’s a lot of interest in takaful with insurers asking if it’s the way to go in the region.”

Buying a company would be one way in, he said, adding that he expects to see more consolidation among takaful companies over the next 12 months to 24 months.

From a growth perspective, takaful is expected to be a clear growth driver within the $1 trillion Islamic finance industry over the next five years.

The Gulf Cooperation Council (GCC) area is home to more than 40 million of the world’s 1.6 billion Muslims, but insurance penetration within the region is still limited.

With potential demand in place for sharia compliant products, including takaful, the region has seen a rush of new players eager to tap into the market in its early stages.

But it has resulted in a fragmented market with a few large players dominating the market, while smaller and mid-size firms struggle to make a profit.

 Tommy Trask, executive director, Alpen Capital, said: “The smaller players are having a tougher time because they don’t have economies of scale or distribution capability.”

 He added: “They also have a high exposure to motor insurance where it is competitive and profitability is weak.”

 Takaful insurers also have the added expense of paying for a overseeing sharia board while having limits on the investments they can make, due to issues of sharia compliance.

 That puts pressure on profitability, especially when takaful companies are competing with conventional players.

 Consolidation could also be spurred on as regulatory bodies become more reluctant to give out new insurance licenses in markets such as the UAE and Saudi Arabia.

 The UAE, which currently has 56 licensed onshore insurers servicing a population of 5 million, recently put a moratorium in place on new licenses.

 While an official stance has not been taken in Saudi Arabia, Clyde’s Hodgins said his clients have reported that they are being discouraged from obtaining a new license while there are acquisition opportunities to enter the market.

 And some existing conventional insurers in the region are keeping an eye out for opportunities. Omer Elamin, senior managing director of Arab Orient Insurance, said the company is adopting a wait-and-see approach to entering the takaful market given uncertain financial conditions.

Elamin said: “But if things pick up here, we might consider entering the takaful sector by acquiring or buying a major share of a company.”

He also added that the UAE’s restrictions on new licenses would prevent the company from starting its own takaful firm.

For international players eager to enter the takaful market, experts see more joint ventures between existing companies and established players abroad.

Trask, from Alpen Capital, said: “There is a clear advantage for participants to choose an efficient and strong operator.”

He added: “I think we will see more joint ventures because international players can provide technical expertise as well as make operations more efficient with administration.”

Zurich Financial Services Group entered a joint venture deal with Abu Dhabi National Takaful Company in late 2008 and Italy’s Assicurazioni Generali SpA said in December that it was looking into a joint venture with Qatar Islamic Bank to offer takaful.

source : INNEWS

‘Banks poised for growth in aftermath of financial crisis’

 

Bankers and experts said making use of the still largely untapped resources of Islamic finance and banking is an optimal solution in light of the global economic downturn.

Islamic banking and finance proved to be the least vulnerable to losses and the least affected by the negative impact of the global financial crisis and promises major opportunities for growth, they said at the inauguration of the first Islamic Finance and Investment Forum for the Middle East, held on the eastern shores of the Dead Sea at the beginning of march.

“In this challenging global economic and financial environment, Islamic finance has remained dynamic with a steady pace of innovation and growth,” Central Bank of Jordan (CBJ) Governor Umayya Toukan said at the inauguration of the two-day forum.

“The accelerated development of the Islamic financial markets and the supporting international Islamic financial architecture as well as the trend towards greater liberalisation have enhanced the integration of Islamic finance into the international financial system,” he added.

In order for Islamic finance to truly become international, allowing its share to go beyond its present level of around 1 per cent of all global banking activities, Toukan stressed that its standards should be consistent with international benchmarks such as Basel II.

Fouad M. Alaeddin, Middle East managing partner head of markets, told The Jordan Times that Islamic banking has great potential, especially since the sector was less impacted by the crisis than the conventional banking sector.

“There is a huge potential for growth in the Islamic banking sector. It is safer as it is asset-based and does not rely on derivatives, etc… and it also takes share in the risk. In addition, the whole concept of Islamic banking goes with stricter banking regulations, which seems to be the trend after the crisis,” Alaeddin said in remarks following the inauguration of the event.

“The sector is still somewhat new as it is about 30-40 years old and is still untapped,” he added.

According to Minister of Finance Mohammad Abu Hammour, the Islamic banking sector witnesses an annual growth rate of 10-15 per cent and there are currently over 300 Islamic banks in more than 50 countries. There are also more than 250 investment funds that operate in accordance with Sharia rules, with total assets of about $850 billion.

In Jordan, there are currently two Jordanian Islamic banks with assets amounting to around 11 per cent of the total assets of the banking system, deposits with a market share of around 12.5 per cent of total bank deposits, and credit facilities accounting for around 15 per cent of total bank credit, according to Toukan.

Two new Islamic banks were recently granted licences to operate in Jordan: Jordan Dubai Islamic Bank, which started its operations in Jordan in January 2010, and Al Rajhi Bank from Saudi Arabia, which is expected to start operating in the next two months, Toukan added in his speech.

In a speech read on his behalf by the ministry’s secretary general, Abu Hammour stressed that the developments the Islamic banking sector has witnessed in the past 40 years are “pioneering” and “unprecedented” in the modern financial market.

According to Abu Hammour, experts agree that Islamic banks, when compared to conventional banks, managed to avoid the consequences of the global financial crisis that affected many countries and caused many banks to collapse.

The minister called on Islamic banks to seize the opportunity created by the crisis by creating international investment banks that provide a new vision to the world and continue development and modernisation in their services.

It is also important to foster and strengthen the Islamic financial industry to be able to maintain its growth and to utilise the money available in the Arab and the Muslim worlds, he added.

In a speech at the forum, Moussa Shehadeh, deputy chairman of the Jordan Islamic Bank board of directors, reviewed obstacles facing the Islamic banking sector and called for supporting it and taking the “special” situation of these banks into account.

In this regard, Toukan said the Islamic banks in Jordan should have special treatment in terms of monitoring and international auditing standards, adding that the CBJ is working on these aspects so the Islamic banking industry assumes a larger role in the global banking system, the Jordan News Agency, Petra, reported.

He said if the situation necessitates having special legislation for the Islamic banking industry, the CBJ is ready to look into that.

Experts from several countries are taking part in the event, where several issues of concern to Islamic banking and finance will be discussed.

source : jordan today