Kerala government gets Reserve Bank of India nod for Islamic banking : Economic Times

T Ramavarman source : economictimes.indiatimes.com

imagesKOCHI: The Kerala government has got a go-ahead from the Reserve Bank of India to launch a financial institution following the principles of Islamic finance.

Cheraman Financial Services Limited (CFSL) will be floated by Kerala State Industrial Development Corporation to function as a non-banking finance company (NBFC). A formal announcement on CFSL, the latest incarnation of Al Baraka Financial Services, was made on Saturday.

Industries minister PK Kunhalikutty and CFSL chairman P Mohamad Ali told reporters here that the firm would function as a non-banking finance company with an authorised capital of Rs 1,000 crore.

Please read more at :

http://economictimes.indiatimes.com/news/economy/finance/kerala-government-gets-reserve-bank-of-india-nod-for-islamic-banking/articleshow/21890211.cms

‘Islamic banking should be on national agenda’

KARACHI: Islamic banking should be part of the national agenda in order to promote a Shariah-based financial system, according to State Bank of Pakistan (SBP) Head of Islamic Banking Salimullah.

He was addressing the participants here at the Islamic Finance Conference and Exhibition on Friday.

Salimullah said that Islamic banking has been on an expansion path throughout the country, providing a viable alternative model of the economy to the world.

The SBP has planned to intensify its efforts towards creating awareness and promoting Islamic banking across the country in collaboration with all Islamic banks, he informed the participants.

Read more : http://tribune.com.pk/story/566510/islamic-banking-should-be-on-national-agenda/

source : tribune.com.pk

Mahathir urges countries to achieve 50% market share for Islamic banking

Even in retirement he remains the most popular politician to the Muslim “man-and-woman-in-the-street”. Now as an elder statesman, Mahathir Mohamed, the former Malaysian prime minister, continues to give advice whether on the global financial crisis, on the future of the Islamic banking industry, on the Islamic gold dinar, on the future of US dollar as an international trading currency, and on his celebrated spat with arch speculator and fund manager, George Soros, in the aftermath of the Asian financial crisis in 1998.

In an exclusive interview, Mahathir, albeit a bit more frail now, was his usual outspoken self, and he had a clear and present message for the Islamic banking industry – learn from the mistakes of conventional banking if the industry is to avoid the same fate. There definitely is a future for Islamic finance. It would not be spectacular; it would not be the cause of booms and busts.

Source : Arab News
Full Story //arabnews.com/economy/islamicfinance/article550222.ece” title=”Mahathir urges countries to achieve 50% market share for Islamic banking” target=”_blank”>

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

Is Islamic Banking Truly Islamic?

As the global economy continues to recover from the 2007 recession, Islamic banks continue to remain relatively unscathed.  However, a recent news piece by BBC raises the question of whether Islamic banking truly adheres to the principles of Islamic economics and finance.

At the helm of the criticism is Taqi Usmani, a member of Bahrain based Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI), the premier governing body of Islamic banks and a world renowned expert in the field.  Usmani claims that the reliance on sukkuks or Islamic bonds, render Islamic finance non-compliant with Islamic economic principles.

Unlike a conventional bond, a sukkuk purports to be free of interest-rate pricing mechanisms.  Moreover, like all Islamic economic transactions, sukkuks are meant to be reciprocal; both economic parties are meant to share equally in the potential risk and reward.  However, in an effort to make sukkuks more flexible and soluble within the greater interest-based economy, sukkuks traditionally are fixed-rate instruments that do not necessarily reciprocate risk.

Aside from the issue of risk reciprocity, sukkuks — like many other Islamic financial instruments — are priced to an interest rate benchmark (e.g., LIBOR).  Potentially, this commonplace practice may be more problematic for Islamic finance than the reciprocal risk.  Islamic economics is primarily identified as being riba or interest-free.    Thus, pricing sukkuks to an interest rate benchmark may be more problematic because it implicitly introduces usury into the Islamic economy.

Yet, interest rate benchmarking is ubiquitous in Islamic banking and is generally considered a necessary evil.  Moreover, Usmani himself has argued that pricing Islamic instruments to existing interest rate benchmarks is equivalent to profit margins of related, but prohibited industries.  To illustrate this example, Usmani argues that a soft-drink manufacturer may legally — from a Shari’ah perspective — price products with the profit margin of an alcoholic beverage manufacturer, an industry that is proscribed by Shari’ah.

Nevertheless, Islamic banking practitioners and scholars differ in their interpretation, and thus permissibility varies in Islamic banking.  Islamic banks bypass such problems by hiring the growing number of Shari’ah technicians, who can endorse a given financial instrument as being within the auspices of Islamic legal principles.

Islamic banking is a relatively new sub-sector in the larger banking world, which continues to evolve and mature.  Whether Islamic banking is or is not truly Islamic is largely a theological question.  As with all issues of theology, judgment of what is orthodox or “correct” in a specific religious tradition is dependent upon the reigning interpretation.  As such, what was permissible yesterday may not necessarily be permissible tomorrow.  It appears that Islamic banking is taking such a progressive evolutionary step.

 Source : the examiner

Future of Islamic banking: Things can only get better

Several countries have started to place an emphasis on a consumer-friendly banking system that has evidently proven its ability to avoid the harsh effects of the global economic crisis.

Islamic banking created a shelter for these countries, though a small one, when their economies were hit by the worst economic depression in 80 years. Having proven its robustness, many pundits confidently claim today that Islamic finance has a bright future ahead with growing recognition all around the world. Badlisyah Abdul Ghani, the CEO of CIMB Islamic Bank Berhad, which was voted Best Overall Islamic Bank at the 2010 Islamic Finance News Awards, believes a bright future lies ahead for interest-free banking. Abdul Ghani says the outlook is very positive as Islamic banking is gaining prominence among customers, adding that with greater consumer awareness, the demand will likely grow in tandem. In Malaysia, Islamic finance already commands 20 percent of the total banking sector, 70-80 percent of the primary debt capital market, more than 60 percent of the total outstanding corporate bonds, 88 percent of the listed stock and 10 percent of the asset management industry. “The expectation is for these market shares to grow further in the next five years,” Abdul Ghani said. In fact, when it comes to Europe, the UK and France have already introduced Islamic finance into their financial system and the Kuveyt Türk Participation Bank is vying to gain a stronger footing in Germany with its interest-free banking applications. Jamzidi Khalid, CEO of Deutsche Bank AG International Islamic Banking and the head of Islamic Structuring for Asia ex-Japan, said in a bank press release dated March 1 that the bank hopes to increase its leading niche in the market. “Making our conventional product platform available to clients in a Shariah-compliant format greatly increases our competitive position, while contributing to the market’s broader development. This is particularly true of the Islamic bond market, where we hope to leverage our position as the number one arranger of conventional international bonds in Asia,” he said. Islamic banking banks are not confined to commercial and retail banking and have also tremendously expanded in asset management through Shariah-compliant fund management. According to an S&P report, assets of the top 500 Islamic banks expanded by 28.6 percent to total $822 billion in 2009, compared to $639 billion in 2008. Although Islamic finance survived the 2009 economic depression largely undamaged, it was not fully immune. The biggest Islamic banking market is held by Saudi Arabia. However, after the Middle East, Malaysia emerges as the leading nation in the Islamic banking system, due to its organization and long-term vision. Malaysia is recognized as Asia’s Islamic financial hub by PricewaterhouseCoopers. The firm concluded that as of the end of 2009, Malaysia’s Islamic banking assets equaled RM113.5 billion ($35.2 billion). In addition to that, according to a 2009 report by the Malaysia International Islamic Financial Center (MIFC), Malaysia had the largest “sukuk” — the Islamic equivalent to a bond — market in the world by 2007 with a total of $25 billion. Islamic banking has a similar rationale as conventional banking except that it operates in accordance with Shariah rules on transactions, forbidding interest as well as investment in businesses that provide goods or services considered haram, or contrary to Islamic principles. The obvious differences between Islamic banking in Malaysia and in the West are its products and services. For example, partly due to the fact that the majority of Malaysians are Muslims, Malaysia has more varied players, including Islamic banks, investment banks, insurance companies, development banks, savings institutions, fund management companies, stock brokerages and trusts. There is also a Pilgrims Management and Fund Board (Tabung Haji) to help people save for hajj, the pilgrimage to Mecca. There is little difference between Islamic banking in Malaysia and in the Middle East as Malaysia works closely and emphasizes strategic alliances through Islamic finance with emerging countries of the Middle East, Africa, Central Asia and Latin America, countries expected to experience the most rapid economic recovery. Malaysia has also taken several initiatives into account, including exempting a wide range of taxes across the Islamic finance spectrum, pioneering numerous global Islamic banking and finance initiatives, adopting a liberal foreign exchange regime and creating a comprehensive regulatory and supervisory framework to ensure transparency and accountability, all of which are important to its Muslim and non-Muslim constituents. Banks from all around the globe have taken an interest in Malaysia’s Islamic banking market, including Japan’s Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad (BTMU), Germany’s Deutsche Bank AG and Saudi Arabia’s Al Rajhi Bank. Abdul Ghani underlines that investors have been confident about investing in Islamic banking in Malaysia. “Malaysia is one of the most successful and mature Islamic financial markets in the world thanks to our focus on the robustness, integrity and stability of the market — due to an effective and facilitative legislative, regulatory, legal and Shariah framework. This approach helps build confidence in the industry,” he added. Islamic banking has its critics. Many doubt, for instance, that its principles and the products are attractive enough to interest non-Muslims. For that reason, therefore, conventional banking is also regarded as a significant part of the financial system in countries where Islamic banking takes place. There is also the issue of human resources and expertise scarcity in Islamic banking, which hinders the system’s global growth. In Malaysia, the International Shariah Research Academy (ISRA), the Islamic Banking and Finance Institute Malaysia (IBFIM), the International Center for Leadership in Finance (ICLlF) and the International Center of Education in Islamic Finance (INCEIF) were established to ensure a deep pool of talent and expertise to support Islamic financial development. Jordan’s central bank governor, Umayya Toukan, told Reuters in March that it is important for Islamic banking to be part of the global banking system, noting that it should not be isolated and that the international standards of financial systems such as accounting standards, regulations and capital adequacy requirements must be available for Islamic banking, too. To achieve this standardization, Malaysia has established prudential standard-setting bodies. The Islamic Financial Services Board (IFSB) and the Association of Islamic Banking Institutions Malaysia (AIBIM) have adopted two standardized agreements, which are the Interbank Murabahah Master Agreement (IMMA) and the Master Agency Agreement (MAA) for deposit-taking and placement transactions. Vatican suggests Islamic system as model for Western banks L’Osservatore Romano, the semi-official newspaper of the Holy See, reported during the global economic crisis that the Vatican favors Islamic financing and noted that banks should use Islamic finance as a model in their efforts to increase consumer confidence. The Vatican suggested that Western banks, which have been negatively affected by the global crisis, should look at rules governing Islamic finance to restore confidence among their clients.

source : todayzaman

Plea to expedite interest-free Islamic banking

A joint delegation of Rajasthan Muslim Forum and the Indian Centre for Islamic Finance met Union Minister of State for Finance Namonarain Meena in New Delhi on Saturday to discuss with him the feasibility of interest-free Islamic banking in the country.

Experts in the delegation brought to Mr. Meena’s notice a recommendation of the Union Government’s Committee on Financial Sector Reforms, headed by Raghuram Rajan, for creation of a framework for interest-free banking. They said the new banking system would not only be viable for the coun-try but also beneficial for underprivileged sections of society.

The delegation’s members included Indian Centre for Islamic Finance general secretary H. Abdur Raqeeb and Jamat-e-Islami Hind Rajasthan president Mohammed Salim, who is also a member of the Rajasthan Muslim Forum.

The delegation pointed out that large sections of Muslim population in different States had kept themselves away from conventional banking because of their religious faith not allowing transactions involving interest. Their investments could benefit the national economy if interest-free banking was permitted in the country.

Mr. Salim said the noted agricultural scientist, M. S. Swaminathan, had recently observed that Islamic banking could be the solution to farmers’ suicide in Vidarbha. About 40 per cent customers of Islamic banking institutions in Malaysia and 20 per cent in Britain are non-Muslims.

Mr. Abdur Raqeeb submitted to the Union Minister the documents relating to methods and techniques adopted by modern and secular countries to create a level playing field for conventional and Islamic banking. “When London, Tokyo, Singapore and Hong Kong can become hubs of Islamic finance, why not Mumbai or Cochin?” he asked.

The delegation said in a statement that Mr. Meena assured of looking into the issue seriously and promised that he would hold detailed discussions with the officers of his department in this connection.

source : hindu

Court directive to State on Islamic banking firm

A Division Bench of the Kerala High Court on Thursday directed the State government and its instrumentalities to desist from participating in any way, financially or otherwise, in the business of a newly formed non-banking financial company, said to be based on Islamic laws, pending adjudication of the writ petitions challenging its formation.

The Bench of Chief Justice J. Chelameswar and Justice C.N. Ramachandran Nair passed the directive after hearing arguments on petitions filed by Al Barakh Financial Services Limited and the State government seeking to vacate an interim order.

The Bench had earlier directed the government and the Kerala State Industrial Development Corporation (KSIDC) to ensure that the newly formed company did not commence its operations until further orders from the court.

The interim order was passed on a writ petition filed by Janata Party president Subramanian Swamy against the government sanction given to the KSIDC to form such a company.

The Bench clarified that the interim order did not prohibit the company from carrying on its activities, provided such things were done in conformity with the law and after obtaining all clearances.

Dr. Swamy, opposing the pleas to vacate the interim order, submitted that there was no new development that warranted the lifting of the stay. He pointed out that the Union Finance Minister stated in the Lok Sabha on December 18, 2009 and March 5, 2010 that Islamic banking activities were not feasible in the current statutory and regulatory provisions.

RBI Deputy Governor Shyamala Gopinath had gone on record that the Islamic banking proposal had not come to the RBI because it was an issue between the Centre and the State. In fact, the RBI rejected such a proposal in 2007. The government and the KSIDC stated in their counter-affidavits that the company was RBI-compliant. He contended that the government order in this regard disclosed that it was an Islamic investment company. If the company was to function as per the Shariah laws, an amendment to the Banking Regulation Act would have to be made. The setting up of such a company with co-ownership of the state was ‘antithetical’ to equal treatment of all religions.

Equity

Dr. Swamy said that as per the government order, 11 per cent of the equity would be held by the KSIDC.

Counsel for the KSIDC submitted that the corporation had not yet made any investment in the company.

The government, in a counter-affidavit, refuted the allegation that the company would function in terms of the Shariah law.

The allegations were baseless and misleading. The company would function only in accordance with the RBI Act, rules and guidelines, it said.

source : hindu

Islamic Banking – A Myth of A Reality

The Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic laws (Sharia) and its practical application through the development of Islamic economics.

These are the views of a leading economist, Umer Chapra while addressing at a conference on the topic “Islamic Banking-A Myth of A Reality” at ICAP. Umer was of the view that Sharia prohibits the payment or acceptance of interest fees for the lending and accepting of money respectively, (Riba, usury) for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principles (Haraam, forbidden).

While these principles were used as the basis for a flourishing economy in earlier times, it is only in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community.

He further elaborate that banking is a basic need of human since the beginning of the civilisation. Banking Concept existed before Islam and in early days it called ‘Saraaf’ who took deposits from investors and offer to trade people. When Islam arrived it gave guidance for trade, finance & banking and hence Islamic banking come in existence. Islamic financing is not myth it is a reality from hundreds of years.

Though Islamic banking launched on commercials basis very late, in modern world Dubai Islamic Bank was the first Islamic Banking bank, which was developed in the Islamic World. It is very unfortunate that total global assets of Islamic banks are just $1 billion as compared to conventional banks that have trillions of dollars. Despite this fact, we consider it a positive sign as Islamic banking are in growing stage and growing day-by-day and country-by-country. Islamic financing and banking are not only existing in the Islamic world but also practicing and teaching in the western countries.

Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah. Hence the Islamic system caters to all the needs that a Modern banking does. The conventional products offered such as Working capital requirement, Leasing, Running Finance, Export Refinance Scheme and Auto finance have Islamic Finance Alternatives such as Murabeha, Ijarah and Diminishing Musharakah, Running Musharakah, Islamic Export Financing Scheme and Car Ijarah/ Medium term car Murabaha/ Car DM respectively.

Islamic Banking has the similar rate of return for consumers, the rates are based on the same benchmark and risks have been reduced comparatively to conventional banking. The facilities provided by the Islamic banks are similar to any modern banking such as ATMs, Debit Card and branch network.

source : dailytimes

Muslim clerics launch Islamic investment advisory board, pitch for Islamic banking

New Delhi: India’s eminent Islamic clerics today pitched for introduction of Islamic banking and financial system in the country while opening to the public the Islamic Investment & Finance Board, an advisory committee headed by clerics to assist both corporations and markets as well as common people regarding Shariat-compliant investment and finance.

“Islamic Finance and Ethical investments are gradually evolving into one of the most important asset classes in the financial services industry in the world today. This is seen as an alternate to the failure of conventional financial system to achieve the higher objective of bringing economic justice. Another driving force for this phenomenon is the sheer size of the Indian Muslim population who are looking for alternate interest free financial system,” said Mufti Mohd. Yahya Qasmi, Member, Islamic Investment & Finance Board (IIFB), at the national conference titled “A Search for an Alternate Financial System” at India Islamic Cultural Centre in the National Capital today.

Building on the strong fundamentals and importance of the alternative investment & finance, Islamic Investment & Finance Board was evolved under the leadership of Maulana Mohammad Wali Rahmani, Sajjada Nasheen, Khanqah Munger and Secretary of All India Muslim Personal Law Board, said Mufti Qasmi while introducing the IIFB and opening the conference.

The primary responsibility of the board is to ensure that all the Islamic Financial products made are Shariah compliant as an alternate means. The work of IIFB will be supervisory to guide and advise the financial corporation regarding Islamic investment and finance including Islamic Banking. The board upon going through the Shariah validity of financial products presented by financial corporation would certify the financial products after a thorough examination according to the Shariah compliant criteria. The IIFB Board shall have continuous dialogue with economist, bankers and other scholars to assess the feasibility of new proposals and assisting in project development and execution of new financial products in compliance with Shariah Principles. IIFB also makes sure that the work of an organization is Compatible with Shariah rules according to the accredited and agreed legal opinions (Fatwa), Mufti Yahya said.

The IIFB comprises prominent Ulama such as Maulana Khalid Saifullah Rahmani, General Secretary of Islamic Fiqh Academy- India, Maulana Fuzail ur Rahman Hilal Usmani Panjab, Maulana Fuzlur Raheem Mujeddi Jaipur, Mufti Shoibullah Khan- Bangalore, Mufti Ahmad Nadir Al-Qasmi, Mufti Ajaz Arshad Qasmi, Mufti Riyaz Ahmad Qasmi Munger, Mufti Anwarul Haque Qasmi, Mufti Mohd Yahya Qasmi and Market Expert Imtiaz Merchant.

Addressing the gathering Maulana Khalid Saifullah Rahmani said interest is prohibited not only in Islam but also in Christianity and Hinduism. Islamic banking system which will be free from interest will have little risk for the common people. He said that to fix benefit and dividend and to not accept the risk of loss is unnatural.

H Abdur Raqeeb, Convener, National Committee on Islamic Banking and General Secretary, Indian Centre for Islamic Finance demanded the government to allow Islamic Banking system in India as many many European countries and US have done. He said he has met RBI Deputy Governor and Union Finance Minister Pranab Mukherjee. Both have given positive response. For introduction of Islamic banking in India, the present Indian banking law will have to be amended. So he urged the gathering to meet their local MPs and convince them about Islamic financial system.

Talking to TwoCircles.net on the sidelines of the program, stock market professional Tauqeer Anjum from Chennai-based stock broker ITI Financial Services Ltd. said in the last few years there has been rise in number of people who are coming to enquire about Shariat-compliant stocks. His company though does not have any such index, however provides the Muslim investors with information about Shariat-compliant shares and products where they can invest. Excerpt.

Stock market professional Tauqeer Anjum

Do you get Muslim customers/investors who want to know from you about Shariat-compliant products/shares in which they want to invest?

Yes, such people come though in limited number and they want to invest but they have no option or alternative to work, they do not have full information either.

Do you see rise in number of people who are coming to enquire about Shariat-compliant shares?

Yes, for the last five years I have found rise in the number of such people. Earlier I was with MK stock broker and now with ITI Financial Services Ltd for some years. A lot of people come to get information about shares which are not based on interest and are completely Shariat compliant. They show interest in equity shares.

Do you have any list of Shariat-compliant products and shares?

We do not have any such index, but we have information about Shariat-related shares and share this information with the investors who want.

Can you name some companies/products in which Muslims can invest without fear of getting involved in interest?

Sun Pharma, Reliance Industries, Reliance Capital, Dabur these are some stocks/companies in which we can invest.

Such programs are necessary. We in the share market seek to get information about Shariat-compliant finance. We got information about this program. And I am here to attend it.

source : two circle