Weekly Industry Update

Najib on need for revolutionary Islamic finance method – See more at:

Pakistan central bank to phase in new Islamic finance rules read more

U.K. Dream of Becoming Islamic Hub Needs Corporate Assist read more

AAOIFI Widens its Global Role To Better Serve & Develop Islamic Finance read more

Sri Lanka Islamic Finance : Dismal Islamic Finance Growth Disappoints Industry read more

‘Revolutionary’ method in Islamic finance can help Muslim countries – M’sian PM read more

The global financial crisis raised a number of serious questions about the conduct and regulatory oversight of financial markets read more

Islamic Participatory Microfinance by Bank of Khartoum – I – By Dr Mohammed Obaidullah

The name is now familiar among Sudan’s poor, unemployed and recent pass-outs from universities. The Irada program of Bank of Khartoum is experimenting with new and innvovative models of intervention to make a dent on chronic social problems, such as, poverty and unemployment. As part of the Sudanese economic system, it operates as a Shariah compliant bank. At the same time, it uses participatory modes within a model that is rooted in cooperation to create and share wealth in the agriculture sector, something that is not quite aligned with mainstream Islamic commercial banking with murabaha-centric portfolios. As such, it has set an example that in a way redefines “for-profit” commercial banking. Not surprisingly therefore, it was adjudged to be among the top three finalists at the Global Islamic Microfinance Challenge 2014 organized by the CGAP (Consultative Group to Assist the Poor), the Islamic Development Bank, Al Baraka Banking Group, and Triple Jump , which evaluated innovative Islamic microfinance experiments with a focus on product development.

A Parnership to Create and Nurture Partnerships

In 2002, Bank of Khartoum (BoK) was registered as a private limited company and subsequently was acquired and managed by Dubai Islamic Bank, the largest Islamic Bank from United Arab Emirates by purchasing 60% of the government shares in 2005. Bank of Khartoum operates under Islamic Banking Standards and has a comprehensive suite of retail services including a network of 58 branches. Its product portfolio includes auto finance, home finance, education finance and takaful. It has embraced hi-tec banking with 137 ATMs, internet banking and mobile banking, SMS alerts, discount and supplementary cards and has the first and only call center.

BoK offers services to corporate, retail, microfinance and investment business segments; it also owns various subsidiaries in trade, exchange, brokerage, and commercial real estate. The equity of the bank as of Dec 2012 is SDG 860 Million. Headquartered in Khartoum, BoK has 1300 employees. Its major shareholders include local and regional businessmen and various institutions such as Dubai Islamic Bank (DIB), the Islamic Development Bank, Abu Dhabi Islamic Bank, Sharjah Islamic Bank and United Arab Emirates Etisalat.

The Bank of Khartoum’s Microfinance Department (IRADA) was established in 2009 with the support and assistance from the Islamic Development Bank. The department was given the trust to implement the SDG 200 million Al-Aman fund for Microfinance. The fund was formed by a strategic partnership between the Diwan Zakah (apex body fo zakat management in Sudan) and 32 Sudanese Commercial Banks.

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Weekly industry update

Lawmakers, sukuk debutantes open Africa to Islamic finance

By Bernardo Vizcaino

(Reuters) – African markets are gradually opening to Islamic finance, buoyed by governments’ debut sales of sovereign sukuk (Islamic bonds) and legislative efforts to make the sector more attractive for companies across the region.

Despite the strong growth of Islamic finance in its core markets, the Middle East and southeast Asia, the industry has lagged in Africa, which is home to one in four of the world’s Muslims. This year, however, a string of transactions is helping to broaden the sector.

Governments across the continent are using sukuk as a way to attract cash-rich Islamic investors, with South Africa making a $500 million issue in September and Senegal raising 100 billion CFA francs ($208 million) in June.

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The issue of purchasing a house through Islamic financing has been written about in detail by experts and intellectuals for the past decade or so. However, it appears that majority of American-Muslims are either in doubt or are misinformed about the validity of the actual practice (buying homes through ‘halal mortgages’ or loans). Many prospective home owners dismiss all Islamic home loans as problematic or interest based loans candy coated in Islamic terminology.

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Turkey has potential but needs reforms for Islamic insurance read more

Japan’s JICA ties with Islamic Development Bank arm, eyes Jordan sukuk

JICA joins other development agencies such as the World Bank and the Asian Development Bank in building links with Islamic finance.

Sukuk, investment certificates which follow religious guidelines such as bans on interest and monetary speculation, have over the past year grown in prominence as a funding tool beyond the industry’s core markets of the Middle East and southeast Asia. read more

Islamic Microfinance is an effective tool of Financial Inclusion read more

Business Zakat Accounting: Fiqhi Basis by Dr Mohammed Obaidullah

The available zakat accounting standards as well as laws governing business zakat reflect a sort of consensus that adjusted net working capital of a business may be regarded as the base for computation of zakat liability of a business. The second accepted alternative is the adjusted growth capital which essentially arrives at the same outcome, given the accounting equality between total assets and total liabilities and equity in the balance sheet of a business organization. The apparent consensus follows from fiqhi prescription of imposing zakat on urud al-tijarah or the inventory of goods available for trade.

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Zakatability of Urud Al-Tijarah

We briefly summarize below the fiqhi basis for zakat liability on urud-al-tijara. The full line of arguments and counterarguments are available in chapter 4 of the text Fiqh Al-Zakat by Dr Yusuf Al-Qaradhawi.

Urud al-tijarah, according to Islamic jurists implies business inventory, which means any commodities obtained for the purpose of resale for profit, except liquid monetary assets. Some jurists define ‘urud al tijarah as anything that one buys in order to sell for profit. We quote here from the work of Dr Qaradhawi the evidence from the Qur’an, the Sunnah and Ijma for zakat obligation on business inventory.

The Quran

“O ye who believe, give of the good things which ye have honorably earned, and of the fruits of the earth which we have produced for you.” (Surah Al-Baqarah No.2, Verse: 267)

Scholars interpret the words ‘that you have earned’ as things earned by means of trade, and the words ‘that we have produced from the earth for you’ as things earned by means of agriculture. This is supported by other verses about zakah that are general and therefore include business assets, such as the verses:

“and on their wealth and possessions there is the right for he who asked and he who is deprived,” (Surah al Dhariyat, 51:19)

“and on those in whose wealth is a recognized right for he who asks and he who is deprived,” (Surah al Ma’arij, 70:24-25)


“Out of their goods take sadaqah so by it thou might purify and sanctify them.” (Surah al Tawbah, 9:103)

The Sunnah

Abu Daud reports from Samurah bin Jundub that ” the Prophet (p) used to order us to pay al sadaqah out of what we have for sale.” (Mukhtasar Al Sunan, Vol. 2, p.175)

Al Daraqutini reports Abu Dharr “I heard the Messenger of God (p) saying ‘Camels are zakated, lambs are zakated, and clothes and housewares are zakated.” (Al Muhalla, Vol. 5, pp. 234-235)

There is no disagreement that clothes and other housewares for personal or household use are exempt, which means that housewares and clothes mentioned in this saying refer to business inventory for resale. This is in addition to the general sayings that obligate zakah on all kinds of wealth without discrimination, such as “give zakah on your wealth.” (Al Tirmidhi, Vol. 3, p. 91)

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Weekly Industry Updates

The GCC Islamic Finance industry is expected to maintain its rapid growth over the coming years despite mixed results across sectors in 2014, according to Standard & Poor’s Ratings Services (S&P). read more

USA TODAY : Shariah financing growing popular in the West read more

Malaysia a trailblazer in global Islamic finance read more

Islamic development finance to target infrastructure, SMEs read more

Islamic Finance Industry Players Welcome Investment Account Platform read more

Malaysia bank giants eye merger to create biggest lender read more

Sukuk market hits new heights but risks falling short on social front. Islamic finance risks falling behind the conventional capital markets in its support of social development and the real economy including SME financing. read more

Tiny Liechtenstein plans push into Islamic finance read more

Weekly updates

Hong Kong to launch first Islamic bond this month, more sukuk issuances to come – See more

South Africa’s Raises $500M In Oversubscribed Debut Sukuk Bond – See more

Cypriots Divided by 1974 War Seek Shariah Hub: Islamic Finance read more

Business schools feed hunger for courses on Islamic finance, aboriginal leadership read more

SWIFT, in collaboration with The Association of Islamic Banking Institutions Malaysia (AIBIM) and the Malaysian Islamic financial community, say they will launch a new rulebook for the usage of SWIFT MT messages for Islamic finance. – See more

Bahrain leads the GCC pack in Islamic finance read more

IFSB – INCEIF Executive Forums for Islamic Finance to Discuss the Global Regulatory Reforms and Sound Governance Practices for Islamic Finance read more

After landmark sukuk, Japan’s BTMU seeks to offer Islamic ringgit loans read more

Insurance: Takaful is not just for Muslims -Hassan Bashir Read more

London is becoming the newest hub of Islamic finance read more

Conventional banks’ sukuk to push limits of Islamic finance read more

Weekly Updates

Sorry, I am trying to get back with latest Islamic finance industry weekly updates from this week.

Maldives Islamic Finance

Potential of Islamic finance yet to be fully explored in Maldives, suggests MMA governor Read more

(Reuters) – The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has appointed a new secretary-general, as the standard-setting body looks to keep its influence in an increasingly challenging environment.


Nigeria Islamic finance


Goldman Sachs and Islamic finance
Goldman Learns From Debut Flop in Islamic Finance Market

islamic financeIslamic finance as ethical investment options
Making the world a better place! READ MORE

Islamic Insurance – Progressing
Islamic insurance market has ‘untapped potential’ despite global growth, says report READ MORE

Conventional banks
Conventional banks plan Islamic finance expansion READ MORE

A New Paradigm for Islamic Finance READ MORE

Islamic finance Senagal
Hogan Lovells advises on inaugural Senegal Sukuk

The First International Conference on Islamic Behavioural Finance


The First International Conference on Islamic Behavioural Finance

Dates: 24-25 November 2014

Over the past few decades, the behavioural finance theory has largely contributed to the understanding of various financial phenomena that were still puzzling under the standard finance principles. These theoretical principles were further developed and empirically tested resulting in a more sound conventional finance theory. Thus, the behavioural aspect imposed itself as an indispensable component of the finance theory. The same principle applies to the recently emerging Islamic financial system. In this context, though there have been tremendous studies on Islamic finance and Islamic investment, there are very few studies that have addressed specific topics within the behavioural finance framework.
Moreover, it is needless to say that currently, majority of the issues faced by Islamic finance and its future is highly related to the behaviour of investors as well as the other market players. Furthermore, the financial theory has long demonstrated that the investment patterns always have long run impacts on the market movements. In this regards, behavioural finance offers a comprehensive set of tools to identify these investment patterns and their possible influence on the overall development of Islamic finance.
In line with the above progress, and to contribute to the development of Islamic behavioural finance, the current conference is organised by Effat University, which marks the inspiration of the University to become a regional leader in Islamic Finance education and research. The conference will benefit the participants in the sense that it will offer a better understanding of behavioural Islamic finance and the outstanding issues marking the current practice of Islamic finance industry. The conference is also a great opportunity for international networking, particularly with the expected international attendance from various Islamic finance institutions. Furthermore, the conference will expose the participants to the international community of Islamic finance experts.

• To provide a better understanding of behavioural financial patterns in Islamic banking and finance
• To enrich the theory of Islamic behavioural finance
• To highlight the great importance of behavioural finance in developing Islamic finance industry and discipline
• To address various issues currently faced by the Islamic finance industry
• To acknowledge and highlight the financial needs to enhance research and development in Islamic finance by generous contributors like the setting of the Scientific Chair in Islamic Finance.

The main topics of the conference include, but not limited to:

• Behavioural finance theory from an Islamic perspective
• Investors behaviour during Muslim festivities
• Conservatism bias in dual banking systems
• Overconfidence effect in the Islamic investments
• Overreaction/under-reaction and availability bias in Islamic investment
• Disappointment aversion in Islamic finance investment
• Herding behaviour in Islamic banking and finance
• Islamic banking and finance awareness and the self-deception behaviour
• Confirmation bias in Islamic finance investment
• Culture diversity and Islamic finance investment
• Islamic banking and finance and the uncertainty issues
• Islamic securities window dressing
• Current issues in Islamic banking and finance
• Miscellaneous applications of behavioural finance in explaining investors’ behaviour toward Islamic finance and banking instruments

• English
• Arabic

It is expected that the conference proceedings will be published in one of the high quality international ISI journals, and the best selected papers will be published subsequently in an edited book, by an international publisher such as Wiley Finance. The conference output is also expected to lay the ground on the future possible studies in advanced Islamic behavioural finance. This area of research will be subsequently based on mixed methodologies and advanced econometric methods.

Authors are invited to submit their full papers either in English or Arabic, in Word formats. Submissions should be made to the following email address: icibhf@effatuniversity.edu.sa Any submission after the 12th of September 2014 will not be considered. All the papers’ submission are peer-reviewed and the decision notification is made latest by 5th of October 2014.
Both theoretical and empirical papers are considered by the conference. The authors are required to use the following format:

• Length: 10 to 15 pages, Font Times New Roman, size 12, 1.0 line spacing (single space), A4 paper size, Margins: 1 inch or 2.5cm
• Author(s) names, affiliation, correspondence address, and email address should be provided in title page
• An English abstract should be provided for the English papers, and Arabic and English for the Arabic papers
• Between three to six key words should be mentioned by the author(s)
• Tables and figures should be placed in their appropriate location in the paper
• References should follow APA format

Jeddah, Saudi Arabia.

Full paper submission: 12th September 2014
Notification of paper acceptance: 5th October 2014
Registration deadline: 6th November 2014
Conference dates: 24-25st November 2014

Presenter – Standard registration: $250
Presenter – Student registration: $200
Participant: $100

The conference is organised by the Effat University in Saudi Arabia.


Effat University
P.O.BOX 34689
Jeddah 21478
Saudi Arabia
Tel: +966-12-6364300
Mobile: +966550519750
Fax: +966-12-6377447
Email: icibhf@effatuniversity.edu.sa

Weekly updates of Islamic banking and finance

Islamic finance body’s secretary general steps down read more

Islamic miro financing – Program turns beggars into successful entrepreneurs read more

Dubai Chamber identifies opportunities in Iraq’s Islamic finance sector – read more

Indonesia’s regulator prepares Islamic finance roadmap – read more

Seminar on the Prospects and Challenges in the Development of Islamic Finance for Kazakhstan read more

Islamic Finance in Saudi Arabia: syndicated financing vs. sukuk read more