November 2009 Issue

Watchdog touts Germany as Islamic finance base

Reuters, Europe | Oct 19, 2009

South Korea weighs first Islamic bond

The National, Dubai, UAE | 28 October, 2009

Tunisia's Zitouna Bank Created, Active in Islamic Finance

ANSAmed | October 18, 2009

Banque Zitouna, the new Islamic Tunisian bank will be opened in the first quarter of 2010. The bank's general assembly in Tunis has approved the articles of association and the appointment of directors. Banque Zitouna has a capital of 30 million dinar (around 15.5 million euros). So far, only a Saudi bank was active in the sector of Islamic finance in Tunisia. El Materi, the website Infotunisie reports, underlined that Banque Zitouna ''was created at the right time, to make the orientation of President Ben Ali on the consolidation of the banking system more concrete, in support of business, as well as Tunisian and international investments''.

Ireland outlines tax laws for Shariah-compliant products

Zawya, Dubai | October 26, 2009

Ireland, like other European countries, is warming to Islamic finance and Dublin has emerged as an Islamic investment fund rival to the Channel Islands and Luxembourg. Indeed several Shariah-compliant funds are registered there, including the Oasis Crescent Global Equity Fund which is based in Dublin and so is the planned CIMB Global Islamic Equity Fund which is due to be launched over the next month or so. Last week the Irish Revenue Service, the tax authorities, outlined in detail the tax treatment of Shariah-compliant products and structures for the funds, leasing and Takaful (Islamic insurance) industries. Part 27 of the Taxes Consolidation Act (TCA) 1997 governs the taxation of funds. Chapter 1A of that Part applies the gross-roll-up taxation regime to all funds set up after March 31, 2000. According to the Revenue Service, the regime does not impose an annual tax on the profits of the fund but .......

Maybank Open To Collaboration With Turkish Bank

Bernama Malaysia | November 03, 2009

Malayan Banking Bhd (Maybank) is open to collaboration with its counterpart in Turkey. "We are open to collaboration in terms of trade finance and products. Collaboration does not have to be in the form of equity," CEO said. "It is not our intention in this moment to look at equity investment in Turkey." Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that Turkey's leading bank, Bank Asya, was keen to tap the expertise of Maybank and CIMB Bank Bhd to jointly establish Islamic banking operations in Turkey. He said that Bank Asya representatives had expressed the bank's interest at a business meeting with the Finance Ministry during the World Bank/International Monetary Fund Conference in Istanbul recently. .....

Malaysia To Help Qatar In Islamic Finance Resources

Bernaman, Malaysia | October 12, 2009

Malaysia will offer two scholarships to eligible Qataris to pursue the Chartered Islamic Finance Professional programme at the International Centre for Education in Islamic Finance in Kuala Lumpur next year. The Raja Muda of Perak, Raja Dr Nazrin Shah, in announcing this today, said two research grants would also be awarded to Qatari researchers by the International Syariah Research Academy for Islamic Finance. "The availability of a significant pool of human resource with sufficient knowledge of Islamic finance is crucial to the continued growth of innovation in the industry and we can make great strides if we join forces," he said. Although Islamic finance has so far remained on the sidelines in the wake of the global financial crisis, it was relevant to reflect on its potential role in helping promote global financial stability.

Shariah Governance - a Challenge to Islamic Banking

Trading Markets | October 10, 2009

A number of statements, resolutions and judgments relating to Islamic banking that have been issued and passed during the last two years have rekindled the debate over the very nature of the Shariah governance process in the global Islamic finance industry. It is true that no Islamic financial transaction can be closed without the sign-off of the Shariah Advisory Board as to whether the transaction or structure satisfies the tenets of Fiqh Al-Muamalat (Islamic law relating to financial transactions). In many markets, the reputation of the so-called top tier of international Shariah advisories do not mean much as retail customers in particular prefer to have the input of their local imam or Shariah scholar.  .................

Islamic Finance Sector is Coming into its Own

The National, Dubai, UAE | 31 October, 2009

The recent growth of Islamic finance has proved revolutionary for two reasons: it has provided access to new sources of capital and liquidity and, equally important, it has shown the world an approach whereby ethical values can be reconciled with financial returns. Some sources say Islamic assets worldwide total between about US$700 billion (Dh2.57 trillion) and $1tn, up from $150bn a decade ago. Some have argued that most Islamic banks, because they are new, have had neither the time nor the means to structure, in a Sharia-compliant manner, the sophisticated instruments that have caused the financial crisis. Others have argued that these sophisticated instruments go against the basic principles of Islamic finance altogether. ....

Islamic finance lacking in products to sell

Business World, France | October 17, 2009

The nascent $1 trillion Islamic finance industry is walking a fine line between replicating conventional products and establishing its own genuine products that adhere to Islam’s prohibition of interest. Asset management is seen as a sector where the industry could easily create products according to its own set of values, but it has not yet established the range of products to compete with conventional asset management. There were some 750 Islamic mutual funds with less than $50 billion under management as of the first quarter of 2009, a fraction of global asset management, and there are only 14 funds larger than $500 million, according to a report published by Ernst & Young this year. "The demand is there, but we need products, products, products," said John Sandwick, an Islamic asset management consultant. "Pension funds are coming up in the Middle East," he said, adding that the nascent but strongly growing Islamic insurance industry, or takaful, particularly in Saudi Arabia, will also give a boost. .............

Egypt, UK - Islamic Banking Development & opportunities

Global Arab Network, Middle East | September, 2009

Islamic Banking is founded on the (Sharia Law), as prescribed in the Koran this law provides the framework within which Muslims should conduct their lives. The overarching principle of this law when applied to the banking sector is that any form of interest (Riba) derived from investments is forbidden (This is still a controversial issue). Islamic finance works from the premise that both the individual customer and bank should be at equal risk upon investment; any possible profits or losses should subsequently be divided equally between them. Conventional financial services, as well as finance for activities related to alcohol, gambling and tobacco are incompatible with the principles set out in the Sharia Law and therefore prohibited in the Islamic banking system. ..................

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