The Securities Commission Malaysia Teams Up With Oxford Centre For Islamic Studies

The Securities Commission Malaysia (SC) and the Oxford Centre for Islamic Studies (OCIS) have teamed up to create an international platform for debate, dialogue and study on contemporary issues and challenges faced in Islamic finance.

The inaugural collaboration with the OCIS, will help further facilitate intellectual discourse among Islamic finance experts, Shariah advisers and scholars from around the world, the SC said in a statement here, Thursday.

The OCIS is well known for its research and academic excellence.

“The collaboration reflects our commitment to building knowledge and encouraging research and discourse in Islamic finance,” SC Chairman, Tan Sri Zarinah Anwar said.

Towards this end, both sides will jointly host a high-level roundtable and public forum on March 15-16 in Kuala Lumpur, to discuss the way forward for Islamic finance following the global financial crisis.

OCIS Director, Dr Farhan Nizami said it had embarked on the study of Islamic finance, in a move to promote a more comprehensive understanding of Islamic culture and civilisation.

“The OCIS is dedicated to achieving by academic means, a better understanding of Islam and the needs of Muslim societies. As part of this objective, it is embarking on the study of Islamic finance,” he explained.

“Given Malaysia’s success in the development of Islamic capital markets, the OCIS welcomes the opportunity to work in partnership with the SC in this important area of study,” he added.

Meanwhile, the topic for the closed-door roundtable is,”Developing a Scientific Methodology on Shariah Governance for Positioning Islamic Finance Globally”.

The public forum on March 16 will see 300 industry practitioners, regulators and scholars attending. It will discuss the contribution of Islamic finance, post the financial crisis.

Raja Dr. Nazrin Shah ibni Sultan Azlan Muhibbuddin Shah, the Regent of Perak, who is also the Financial Ambassador to the Malaysia international Islamic Financial Centre (MIFC), will deliver his keynote address at both events.

source : bernama

‘Sukuk alternate solution to tawarruq’

ISLAMIC financial institutions looking into tawarruq, a controversial Islamic financing structure, should instead consider sukuk ijarah, or Islamic bonds, when looking at options to raise cash, a study said.

In its basic form, tawarruq allows the sale of an asset on a deferred payment basis. The purchaser then sells the asset to a third party to get cash. But so-called organised tawarruq has divided scholars who debate whether allowing such transactions via banks still meet syariah laws.

In a paper, Shochrul Romatul Ajija, an Indonesian student taking her Master of Economics at the International Islamic University Malaysia, said tawarruq is gaining popularity in Malaysia and has been established as syariah-compliant. “It helps people who need cash on short notice … it is not a loan,” she said.

She said should Brunei wish to start providing tawarruq financing, it can be done to help people who are in need of cash in the short term.

But in her paper, Shochrul said that if Islamic financial institutions need an alternate solution to prevailing liquidity management challenges, they can turn to sukuk ijarah, or Islamic bonds.

Sri Anne Masri, a local Islamic business consultant, said, “The Islamic banking industry must seriously differentiate itself from the conventional banks, not just by replicating conventional products.” She added that tawarruq is being used today as either a liquidity facility (inter bank placement) or a credit facility (credit financing) as it is a highly profitable business.

The First Global Investments, an Islamic investments firm, defines tawarruq as, reverse murabahah. “As used in personal financing, a customer with a genuine need buys something on credit from the bank on a deferred payment basis and then immediately resells it for cash to a third party. In this way, the customer can obtain cash without taking an interest-based loan,” it said.

Shochrul said that the use of tawarruq came under scrutiny because people were finding it difficult to find other brokers to sell their tawarruq to, and that was when the banks started to arrange buyers and sellers in order to make the sale, which is prohibited in the syariah context. “This is what is called organised tawarruq and it is not syariah-compliant,” she said.

In her paper, she said that should Islamic financial institutions decide to use tawarruq, they should note that it should “only be used in extreme cases where no option is available, to avoid interest”.

She said that widespread use of tawarruq is harmful to the industry in the long run, stressing syariah boards have to “strictly monitor all tawarruq-based transactions”.

The Organisation of Islamic Conference Fiqh Academy, an Islamic studies academy in Jeddah, Saudi Arabia, in April 2009, ruled that organised tawarruq was “impermissible” due to the arranged nature between the Islamic financial institutions and the people.

source : The Brunei Times

Islamic Banking Thoughts – Finland

Left Alliance chairman Paavo Arhinmäki wants “people’s bank”, which does not necessarily take the interest rate. Islamic banking is one that seems the closest equivalent to Arhinmäen thinking, even if the state owned Post Office Savings Bank in due course, for example a sample of the mentioned. Was the Postal Savings Bank a “people’s bank” that I do not think the state monopoly on the transmission of money it was yes. “Public Bank” in Finland is likely to be a bank for politicians.

Islamic banking in Finland, over time, will be set up, grow Muslims needs. Such Islamic banking is much more likely than the state “people’s bank”, perhaps the left-wing union directly to support the creation of a supporter.

Islam prohibit the taking of interest. Bank and buy you a house you buy is owned by the bank for its hire. Hard guarantees to these Islamic banks belong to the applicant, so any charity lending is not an issue. Poor should therefore be a good time behind the back, if the loan you want.

Islamic banking should not speculate, and not to finance projects to be considered immoral. Morality, religious experts to monitor the Council, the Governing Board, therefore, a sort of.

Instead, a charity practiced by 2 per cent of the total number amounts to a good cause for Islamic charities.

Perhaps also become popular in the Islamic banking business under a credit transfer system, which tracks credit transfers are destroyed immediately. The commission is only one percent.

The Islamic bank does not choose its customers on the basis of religion, so religion is of course welcome to customers. In Sweden, such bank is acting in the world and these are several. Islamic Bank for the establishment of the taxpayers’ money is not needed.

 source : JAGA