Nigeria: Experts Restate Great Future of Islamic Banking in the Country

BY : Abdulwasiu Hassan And Muideen Olaniyi

An Islamic finance expert Hadiza Garba Laka has said the non-interest banking (Islamic-banking) has great potential for the Nigerian economy.

Hadiza Garba Laka of Lotus Capital Limited, who was delivering a paper recently at a public lecture organized by the Jama’atul Ta’awunil Muslimeen in Abuja, pointed out that Islamic banking has witnessed real time growth in UK, USA and Malaysia.

Also speaking at the lecture, Malam Mohammad Lawal Shaibu, an expert on Islamic banking and investment, said the interest-free banking is not a preserve of Muslims, explaining that the banking system is operated by Christians abroad since it is all about business.

Dr. Tawfeeq AbdulAzeez of University of Abuja, who was represented by Abu Mazeedatul Khayr said Islam prohibits usury because the religion is a complete way of life.

Malam Mosur Olaide, representing the Director General of the National Space and Research Development Agency, (NASRDA) Dr Saidu.O. Mohammad maintained that if conducted honestly and given a chance, Islamic banking will bring high moral ethos into the Nigerian market.

source : allafrica

Islamic Agri Finance can uplift rural areas

LAHORE – In the wake of the current financial crisis coupled with the global food shortage the need for improving village economy through enhanced output has become a challenge for the planners and other stakeholders. The importance of livestock and allied sectors cannot be compromised for the Agricultural growth. Islamic Agricultural and Rural Finance can bring the genuine green revolution to an economy. As Islamic Finance has made a lot of progressive research in Agricultural finance bringing a number of pragmatic and useful choices which if implemented can bring revolutionary development to the economy.
This intention was declared by Muhammad Zubair Mughal Chief Executive Offier, AlHuda Centre of Islamic Banking and Economics(CIBE), while explaining the objectives of a specialized training workshop on Islamic Agricultural and Rural Finance being organized by AlHuda-CIBE on 28th & 29th November 2011 in Islamabad.
The workshop will be attended by officials from banks and financial institutions, agricultural research development and planning institutions having interest in Islamic Finance.
He further emphasized the role of Islamic finance in Agriculture and Rural sector, that it can not only bring new avenues for business for Islamic financial institutions by using innovative products but also the farmers and agro based businesses can benefit from shariah compliant financing to develop their economy and thereby eliminate the poverty and agricultural funding limitations. Especially the farmers with smaller units of land face difficulty, which can be solved by the planners through this mechanism.

source : nation pakistan

Islamic banking grows in Kenya

By Hussein Jiva, Written for UPI

Ahmed Bayusuf worked for nine years as a cab driver in Nairobi. After saving enough money, he invested in a coffee shop. Now, he’s the store manager at Books First.

Bayusuf has worked hard to manage his money well. He’s also a strict Muslim and, as such, doesn’t believe in making money if he hasn’t worked for it. For Bayusuf, that means an interest-earning bank account is off-limits, some interpretations of Muslim law state. That’s why he was thrilled when banks specializing in Muslim-approved accounts opened in Nairobi.

“Now, I don’t have to worry about accumulating riba,” Bayusuf said, using the word that, for Muslims, defines interest. “I also know that my money is being invested in compliance with the Islamic way.”

Islamic banking isn’t just appealing to Muslims, Bayusuf said. Even for people of other faiths, the system offers low-risk investments.

Conventional banking has for many years been the monopoly in the financial sector. Despite rapid technological advancements, options in banking have remained limited. That changed about five years ago, when Barclay’s Bank offered Nairobi’s first interest-free banking options, in accordance with Shariah, the law that governs Islam.

Since then, people in Kenya have shown a preference for Islamic banking, said Abubakr Athman, a business analyst with TalentRecruit Kenya Limited. The growth in the Islamic banking industry has been such that Athman says it could replace conventional banking in the future.

In 2007, Gulf African Bank and First Community Bank joined the scene with the first fully Shariah-compliant institutions in Kenya. Now, there are nine banks offering interest-free options. Other services that attract customers include free accounts with minimal opening fees, no ATM fees, no maintenance charges and flexible loan payments.

Fahd al-Guthmy, an official at Chase Bank’s city center branch attributes the success of Islamic banking to how easy it is for people to utilize the services. The industry has grown 15-20 percent each year over the past two decades, he said.

The Shariah-friendly banks offer special accounts for charity (a requirement of Shariah), and many offer sayyidah — “woman of honor” — accounts. The accounts are advertised as a means of empowering women through Shariah-compliant investment opportunities. Customers can also open special savings accounts for the hajj, the pilgrimage to Mecca, the Muslim holy city, that all able-bodied Muslims are expected to make at least once in their lifetimes.

Despite all the hype surrounding Muslim banking, the industry is still in its infancy. Misconceptions about the banking method abound. For example, bankers at Shariah-friendly branches must remind customers that there’s a difference between interest and profit. Islam forbids receiving a financial advantage without giving a counter value but it’s acceptable to have a financial gain as long as an effort is made.

Some Kenyans avoid the banks, assuming that they’re only for Muslims but the banks accept customers of any religion.

Muslim religious leaders have had disputes over details of how the banks operate.

Despite the challenges, analysts say the future of Islamic banking is bright.

“The industry has transformed the banking sector,” Athman said. “Many conventional banking customers have flocked into Islamic banking, clearly seeing the benefits on offer.”

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Sri Lanka, Malaysia partners to promote Islamic banking and bonds

Sri Lanka’s Wealth Lanka Management (Pvt) Ltd, an investment house, and Al Tayseer Advisory Services Sdn. Bhd a Malaysia based consultancy has linked up to provide Islamic banking and bond market instruments, officials said

The firm advices on Islamic banking and corporate finance and advisory services for specialist industries like steel, cement and cotton.
“We find Sri Lanka as an emerging market for Islamic finance with immense future growth potential,” Al Tayseer Advisors Services, chief executive and partner Fahd Hashim, told reporters in Colombo.

“Sri Lanka is the second fastest growing economy in Asia right now and growth is linked to public sector investment with imports of cement steel.”

Al Tayseer can help with setting up plants or acquiring them to supply commodities to Sri Lanka, Hashim said.

The firm was also working in Pakistan. Hashim said it was already advising a Pakistan based cement maker that is exporting to Sri Lanka. In addition to corporate finance the consultancy also advised in materials and energy efficiency and use of carbon credits.

Mangala Boyagoda, head of Wealth Lanka Management, a senior fixed income specialist in Sri Lanka said the new partnership could provide Shariah based bond market products to help create an interbank market in Islamic finance.

“You cannot develop Shariah banking without an interbank market,” Boyagoda said. “We are looking at the possibility of raising a Shariah government bond.”

Though several banks have Islamic finance units in the country, they have constraints in Treasury management due to lack of compliant products.

The partnership will also advice on setting up Islamic banking units or outsource such units for banks, finance companies and leasing firms, Hashim said.

source : lbo – Sri lanka

Islamic banking gets more customers from conventional market

The growth from the conversion of conventional banking customers into Islamic banking is higher than that from the unbanked market, said Standard Chartered Saadiq global head of Islamic banking (consumer banking) Wasim Saifi.

“So far the growth in Islamic banking has come from customers switching to Islamic banking from the conventional banking space.

Banks have not been able to find it profitable or feasible to penetrate deeply into the unbanked population,” he said on the sidelines of the Islamic Financial Intelligence Summit.

On concerns whether a bank that operated in both conventional and Islamic banking could properly separate those two businesses, Wasin said regulation was quite strict and banks as well as syariah boards would ensure that there was no common link of assets.

“We ring-fence the Islamic assets and liabilities so that they are separate from our conventional assets.”

source : the star malaysia

First Ever Islamic Inter Bank Rate (IIBR)

IIBR has been launched in collaboration with high profile Islamic bank, Islamic banking windows and independent stake holders of the industry with initiation of Thomson Reuters. The IIBR is sharia’a’ a alternative for LIBOR (London Inter Bank Offer Rate ), which was used by Islamic financial institutions.

Since the establishment of Islamic banking industry, Islamic banks had to use the conventional (LIBOR which is based on Interest), as a bench mark to calculate the cost of funding.

Full story about the methodology used, background, timing and contributor panel please refer:

World’s Largest Gathering of Islamic Finance Leaders to Address Next Phase of Global Growth

Manama, Nov. 20 (BNA) — The 18th Annual World Islamic Banking Conference opens on the 21st November with a series of pre-conference summits

Bahrain: 20 November 2011: Leading players, industry thought leaders and key regulators in the international Islamic banking and finance industry will take part in the 18th Annual World Islamic Banking Conference (WIBC 2011), which is set to commence on the 21st of November 2011 at the Gulf Hotel in the Kingdom of Bahrain.

The three day event which ends on the 23rd of November is convened under the patronage of HRH Prince Khalifa Bin Salman Al Khalifa, the Prime Minister of the Kingdom of Bahrain and held under the support of the Central Bank of Bahrain.

Speaking to the media ahead of the event, David McLean Managing Director of the World Islamic Banking Conference said that “in recent years Islamic finance has further transitioned into a dynamic, fast growing and highly competitive market servicing an increasingly international community.
This expanding globalization of Islamic finance has now gained significant momentum as manifested by increasing cross-border investment and deal flows that are Shari’ah compliant, greater participation in international Islamic financial markets, and the increased presence of Islamic financial institutions in new jurisdictions.
Held under the theme “Competing for Global Growth”, the 18th Annual World Islamic Banking Conference (WIBC 2011) will set the stage for discussions that will seek to boost the scale of Islamic finance activities across international markets.”

He also that said “this year we have delegates attending from more than 50 countries providing the discussions at WIBC with a truly international perspective.”

WIBC 2011 will begin on the 21st of November 2011 with a series of pre-conference summits. The pragmatically focused pre-conference executive briefing sessions, led by experienced and respected industry experts, will place a range of complex themes in a practical framework, enabling a deeper understanding of the critical issues facing the Islamic finance industry.

The main WIBC 2011 conference, which begins on the 22nd of November 2011, will be inaugurated by H.E. Rasheed Mohammed Al Maraj, Governor of the Central Bank of Bahrain. The inaugural session which focuses on strengthening the regulatory frameworks to accelerate the international development of Islamic finance will also feature H.E. Khaled Mohammed Al-Aboodi, Chief Executive Office & General Manager, The Islamic Corporation for the Development of the Private Sector, the private sector arm of the Islamic Development Bank Group (IDB), Saudi Arabia.
The inaugural plenary session will be followed by the high profile Industry Leaders’ Power Debate led by internationally respected CEOs and decision-makers from the key players in the industry.
Moderated by Ashar Nazim, Senior Director, MENA Leader for Islamic Finance, Ernst & Young, this dynamic session will analyze how the leading players are positioning themselves to capitalize on the new growth opportunities presented by the increasing internationalization of Islamic banking and finance.
The Power Debate session will feature Tirad Mahmoud, Chief Executive Officer, ADIB; Toby O’Connor, Chief Executive Officer, The Islamic Bank of Asia; Syed Abdull Aziz Jailani Bin Syed Kechik, Chief Executive Officer, OCBC Al-Amin Bank Berhad; Asad A Ahmed, Chief Executive Officer, Gulf African Bank; Abdulrazzak Mohammed Elkhraijy, Executive Vice President and Head of the Islamic Banking Development Group, The National Commercial Bank – Saudi Arabia; and Dr. Salah Addeen A Qadar Saeed, General Manager – Credit & Risk Management, Bahrain Islamic Bank.

WIBC 2011 will also feature a special keynote address on “Competing for Global Growth: Preparing for the Asian Century” by Prof. Kishore Mahbubani, the Dean and Professor in the Practice of Public Policy at the Lee Kuan Yew School of Public Policy (LKY School) at the National University of Singapore on the 23rd of November 2011. Jaseem Ahmed, Secretary-General of Islamic Financial Services Board (IFSB) will be the opening keynote speaker on the final day of the event.

Commenting on the Central Bank of Bahrain’s support for the event, Khalid Hamad Abdul-Rahman Hamad, Executive Director – Banking Supervision, Central Bank of Bahrain noted that “Bahrain has a long and proud history in supporting the progress of Islamic finance. The Kingdom continues to play a pioneering role in the advancement of industry standards, best practices and in developing a strong regulatory structure. We look forward to welcoming back the global stage of the 18th Annual World Islamic Banking Conference to the Kingdom of Bahrain and to continuing its tradition of supporting growth and innovation in the international Islamic finance industry. The past few years were so challenging for Islamic finance but at the same time the future raises several business development potentials and opportunities which we are all looking forward to explore during the 18th Annual World Islamic Banking Conference,” he said.

A similar view was expressed by Shaikh Mohamed Bin Essa Al-Khalifa, Chief Executive of the Bahrain Economic Development Board who said that “Bahrain continues to be widely recognised as a global leader in Islamic Finance, and is also home to a number of central bodies which set the standards for the industry across the globe. Guiding over thirty countries on conducting business by Islamic principles has provided many investors with the confidence they need despite the turbulent market conditions in recent years. We have built a solid foundation for Islamic banking in the Kingdom; presently there are more than twenty five Islamic banks and the monthly issues of the Sukuk Al-Salam Islamic securities are regularly over-subscribed.”

He also said that “given our heritage in Islamic Banking, and our commitment to a strong future for the sector, we are proud to continue to host and support the 18th Annual World Islamic Banking Conference.”

As a part of the world comes to WIBC initiative, a leading panel of international experts will converge at the Country Focus Roundtable to address how well-positioned Islamic banks can explore international opportunities in the most dynamically evolving high-growth markets for Islamic finance. The Country Focus Roundtable along with the WIBC Country Pavilions will explore exciting opportunities in key jurisdictions including France, the United Kingdom, Singapore, Bahrain, Bermuda, Luxembourg and Labuan.

HMA Iain Lindsay OBE, British Ambassador to Bahrain, who will be inaugurating the UK roundtable at WIBC 2011, noted that “with a proven track record as a leading international financial centre and a long history of building strong regulatory infrastructure, the United Kingdom is keen to further establish its links and partnerships with the international Islamic finance industry. Given the UK’s strong financial and trade links with the Gulf and South East Asia, which are the major centres for Islamic finance, there are tremendous opportunities for cross-border investment flows that are Shari’ah-compliant. The progress made by UK firms in the Islamic finance industry is notable and the UK Pavilion at the World Islamic Banking Conference 2011 will be an opportune platform to showcase the Islamic finance capabilities of the UK and further build our relationships with the leading international players.”

WIBC 2011 will feature more than 60 leading industry partners and exhibitors showcasing their latest innovations at the World Islamic Banking Exhibition organised along the sidelines of the conference. The exhibition will be officially inaugurated on the 22nd of November.

The eagerly anticipated 2011/12 edition of the World Islamic Banking Competitiveness Report, developed in collaboration with Ernst & Young, will also be launched on-site at the 18th Annual World Islamic Banking Conference in an exclusive session on the 22nd of November 2011.

source : Bahrain News Agency