The initiative of the use of Islamic finance in Ingushetia

In the course of the works of strategic vision’s group “Russia-Islamic World”, which was held in Kuwait in 21-24 of December, Unus Bek Evkurov, the president of Ingushetia, informed that the asset complex is planned to be built in Magas. The territory is given for project, the architectural design of which is framing. Special fund and guardian council were established for financing of islamic complex’s construction. “It’s very important project for us”, – Unus Bek Evkurov emphasized.Previously Evkurov mentioned that Ingushetia was ready to offer Saudi Arabia and Kuwait the capital spending project for investment. “Particularly, it would be good for Kuwait to invest in construction business. We build on our capital, I would give the whole complex, the whole mikrorayon in order to build high-rise apartment buildings for subsequent sale of residential space”, – Evkurov said.

According to his words, in the process of agreement the additional insurance of the government may be given in order the residential space will be bought out if it couldn’t be sold.

Ingushetia also wants to secure assistance from these countries in the form of participation in mosques’ construction. “The second moment is construction of mosques and assistance not only with money, but also with participation in projects, as “North Caucasus” quotes the president of the republic.

 source : ibf.ru

Westpac claims Australian first for Islamic finance

Australia’s Westpac Banking Corp has launched what it believes to be the country’s first Islamic financing tool for institutions, designed to facilitate commodities trade for Middle Eastern and Malaysian investors.

Westpac’s institutional bankers have developed an instrument allowing Islamic investors to buy iron ore and other commodities forward, using Westpac’s strong balance sheet, without the counterparty risks of a doing a direct deal with a supplier.

“We believe it is the first in Australia,” Westpac’s head of financial institutions and trade, Emmanuel Alfieris, told Reuters on Tuesday.

Australia’s banks are only just beginning to enter the global $1trn Islamic finance industry, which forbids charging interest and favours profit-sharing arrangements or structures that resemble rental agreements.

Recently, Australia’s largest investment bank, Macquarie Group, revealed it planned to set up an Islamic finance joint venture with Bahrain-based Gulf Finance House to target markets in the Middle East and North Africa.

Under Westpac’s new Islamic product, the bank buys commodities on behalf of investors, holds them on its books for a short time and then, once they are sold, splits the profit with the investor. The time period and profit share are pre-agreed.

“Depending on the success of this one, we are looking at other asset classes,” Alfieris told Reuters. He declined to elaborate.

Australia’s affinity for commodities – it is the world’s largest iron ore and coal exporter and a major producer of gold, copper and nickel – gives it a natural platform to enter Islamic finance, which relies heavily on commodities-based transactions.

Sharia law dictates that transactions involve physical assets, so commodities are often the asset of choice because they are more liquid than other real assets, such as property.

The Australian government is keen for the local financial sector to play a larger role in Islamic finance and is considering reforms to assist its development.

“Islamic financing is a crucial plank in the government’s strategy to make Australia a financial hub in the Asia Pacific,” Trade Minister Simon Crean said in a statement last week.

A recent study recommends the removal of regulatory barriers and some tax reforms.

source : alrroya