Djbouti : Dahabshiil opens Islamic Bank in Djibouti

Dahabshiil which is one of the leading remittance companies in Somalia has on Saturday opened a new Islamic bank in the Djiboutian capital Djibouti.

In the opening of the ceremony top figures in the government of Djibouti have attended including the President of Djbouti his Excellency Ishmael Omar Gelle, the first lady Khadra Mohamoud Hayd, the Prime Minister of Djibouti Dileita Mohammed Dileita, the speaker of the Djbouti national assembly Idiris A. Ali

and the chairman of Djibouti central bank Jamac Mohamoud Heyd and some other dignitaries.
“Our bank is an international bank and we shall be dealing with our clients in an Islamic way I mean there will be no usuries in our bank, and I hope this will be a good example of depositing and withdrawal of money from the bank, we have currently employed highly skilled and talented Djiboutian citizens, and in the near future we are planning to open similar Islamic banks across Africa” said Mr. Abdirashid Mohammed Saaid the overall chairman of Dahabshiil.

“Dahabshiil bank is for the entire Somalis people wherever they are in the world and I am sure that they will have smooth access with it and no difficulties at all whatsoever” added Abdirashid.

Dahabshiil has been operating for over 40 years both locally and internationally, but in the capacity of money transferring company.

source : somali net

Islamic banks unfazed by new competition

Better products and innovation will separate the playersThe country’s existing Islamic banking players remain unfazed by the upcoming competition in the form of more licences to be issued for world-class Islamic banks and takaful operators.

CIMB Islamic Bank Bhd executive director and chief executive officer Badlisyah Abdul Ghani said the move would result in a greater variety of syariah-based financial services and products being offered to the public.

“This, of course, will bring about a more competitive range of products. The challenge for existing players is to continue to innovate and not lose ground here and look for expansion opportunities in the region,” he told StarBiz.

OCBC Al-Amin Bank Bhd director and chief executive officer Syed Abdull Aziz Syed Kechik said: “This development is healthy not only for customers but also for the country as efforts continue towards collaboration with the international financial community to collectively shape the Islamic finance industry.”

KFH Research Ltd said the players would have to further improve on products and services to retain market leadership.

“As competition increases, we also expect the local Islamic banks to aggressively grow their Islamic banking business within the region, if not globally,” it said.

The financial sector liberalisation plan includes the issuance of licences for seven banking and two takaful players from 2009 until 2011.

It also increases limits of foreign equity ownership to 70% from 49% for investment banks, Islamic banks, insurance companies and takaful operators.

The measures would also see the issuance of up to two new licences for Islamic banking with a minimum paid-up capital of US$1bil, as well as up to two new licences for family takaful.

Recently, the National Bank of Abu Dhabi, one of the United Arab Emirates’ biggest banks, was reported to be interested to operate in Malaysia.

Currently, there are about 17 Islamic banking institutions in Malaysia.

However, given that the global economy was still in recovery mode, KFH Research did not expect many foreign players to enter the local market this year.

“The prospect for Malaysia is bright, however, given its position as one of the most developed Islamic finance market,” it said.

The industry performed very well last year, with the market share of total banking assets and deposits surpassing 18% and on target to achieve 20% mark this year.

In its Financial Master Plan outlined in 2004, Bank Negara has targeted Islamic banking assets to carve a 20% market share of the banking industry by this year. The figure stood at about 19% in June last year.

As of November 2009, the total Islamic financing of RM115bil constituted 15.5% of the financing portfolio of the banking industry while net non-performing financing remained low at 2.4%.

Malaysia’s Islamic capital market reached RM803bil in August last year, representing 54% of Bursa Malaysia’s market capitalisation then.

Many are not aware that Malaysia has the largest Islamic equity market in the world with about 88% of all stocks listed on Bursa Malaysia deemed as syariah-compliant.

KFH Research said Islamic finance survived the crisis due to a number of key factors which were in line with syariah. This starts with the ban on interest where any pre-determined payment over and above the actual amount of principal was prohibited, as interest (or the intrinsic value of the money) is deemed unlawful by syariah.

“Second is the ban on uncertainty or speculation. However, risk taking is allowed when all the terms and conditions are clear and known to all parties.

“Also, the profit and loss-sharing principle is where parties to a financial transaction must share in the risks and rewards attached to it.

“Asset-backing principle also helps as each financial transaction must refer to a tangible and identifiable underlying asset,” said the research house.

According to CIMB Islamic Bank Bhd executive director and chief executive officer Badlisyah Abdul Ghani, Islamic finance survived the recent economic crisis because it never participated in the US subprime market.

“And there are two reasons for this – first, Islamic financial institutions were not sophisticated enough to participate in the market.

“Also, the objective of doing Islamic finance is for maximum profitability and social responsibility, which means we cannot take part in something that at the end of the day will negatively impact the society,” he said.

OCBC Al-Amin’s Syed Abdull Aziz said Islamic finance was cushioned from the initial effects of the financial crisis as the industry was prohibited from getting involved in transactions that give rise to “gharar” (uncertainty), such as subprime mortgage collateralised debt obligations.

source : thestaronline