Sunday, 7 February 2016

Event Summary (KLCIF2016) - KL Conference on Islamic Finance 2016

KL Conference on Islamic Finance 2016

Date    : 23-24 February 2016
Venue : Grand Seasons Hotel, Kuala Lumpur - Malaysia

“An international gathering of practitioners, scholars and experts to discuss and share their knowledge, expertise and experience on the principles, instruments and issues related to Islamic finance, to be held at the world’s leading Islamic financial centre…Kuala Lumpur.”

Event site :

- Product development and Implementation of Islamic financial products
- Ensuring Shariah compliance in Islamic financial instruments
- Sukuk: development, issues and challenges
- Islamic gold account: a golden opportunity
- Islamic mutual funds (unit trusts): factors to consider in making an investment
- The rise of Islamic wealth management in Islamic finance industry
- Islamic financial planning: success in both worlds
- Takaful: innovation and solutions
- Enterprise risk management for Islamic banks
- Enterprise risk management for takaful operators
- Accounting and auditing
- Human capital development in Islamic finance industry
- Legal issues and challenges in Islamic finance
- Dispute settlement in Islamic finance: issue and solutions
Islamic ethics in financial services industry
- Corporate governance for Islamic finance industry


Speakers are selected from Islamic banks, takaful operators, academicians, legal practitioners, consultants, regulatory bodies.

Among the speakers are:

- Islamic bankers/bankers
- Takaful/insurance operators
- Regulators
- Head of governmental departments
- Financial planners/wealth advisors
- Financial consultants
- Legal practitioners (lawyers)
- Academicians (lecturers)
- Entrepreneurs (businessmen/importers/exporters etc)
- Other professionals 

Early Bird Fee: 
Registration with payment by 26 January 2016
Malaysian   :  RM1,500
International  :  USD600

Normal Fee:
Registration with payment after 26 January 2016
Malaysian  :  RM1,800
International  :  USD700
Special fee for Malaysian university lecturers :  RM1,000 (group discount not applicable)

Fee is inclusive of lunch, refreshments and seminar package only.

Group Discount:
Enjoy 10% discount for 3 or more delegates registered from the same organisation and the same billing source.

(will be uploaded soon...for now you may request for tentative program or you will be given a tentative program when register online)

 Download the brochure




Grand Seasons Hotel, Kuala Lumpur - Malaysia


Kuala Lumpur


Islamic finance continues to grow in the British Virgin Islands

The British Virgin Islands remains the most popular international financial centre for incorporating companies due to its tax neutrality, political stability and flexible legal system based on English common law. It is a ready-made platform for the needs of the Islamic finance market. BVI companies are commonly used as holding companies for cross-border investments into many developing markets, including those where Islamic financing is increasingly popular. BVI companies are also used by Islamic high-net-worth individuals and families as holding companies for assets in developed markets.
Further, as the Islamic finance market grows and matures, international financial centres such as the British Virgin Islands are being used to facilitate the structuring of Islamic finance products and transactions such as sukuk and musharakah and the incorporation of investment funds and corporate structures.
Review of 2015
In June 2015 the British Virgin Islands introduced two new fund products under the Securities and Investment Business (Incubator and Approved Funds) Regulations 2015. Incubator funds and approved fund are lightly regulated funds aimed at start-up managers and those managing funds for smaller groups of closely connected investors. There is a maximum of 20 investors per fund and a cap on investments of $20 million for incubator funds or $100 million for approved funds. These should prove attractive to Islamic asset managers or advisers of high-net-worth individuals and families from the traditional Islamic finance regions of the Middle East and Southeast Asia.
Last year saw the continued growth of Islamic finance products in the British Virgin Islands. Building on the British Virgin Islands' close connection with the UK real estate market, BVI companies held by Islamic high-net-worth individuals or families are increasingly being used in Islamic financing (mainlymurabahah) of UK real estate by European private banks. There certainly seems to be increased awareness of Islamic financing in the British Virgin Islands and several private banks have revised their private banking documents to become Sharia compliant.
Islamic financing is increasingly seen as going hand in hand with conventional financing. An example of this joint financing with a BVI element was the Abu Dhabi Islamic Bank's involvement in the $125 million (combined conventional and murabahah) facilities to a group in the oil/gas sector operating in the Middle East and North Africa.
Preview of 2016
Globally, the Islamic finance market is growing, with the past five years having seen compound annual growth of 17%. It is estimated that the current size of the Islamic finance market is between $1.6 trillion and $2 trillion (amounting to 1% of the global finance market) and it is expected to grow to $3.4 trillion by 2018. Not only is the Islamic finance market growing within its traditional user base – such as Islamic banks, Islamic banking departments of conventional banks and governments of Islamic countries – but western firms are now also starting to use Islamic finance products. The predicted continual growth of the market through 2018, coupled with the ever-growing diversification and sophistication of users, is very promising for the growth of the market within the British Virgin Islands during 2016 and beyond.
The British Virgin Islands is tax neutral and politically stable, has a legal system based on English common law and has final recourse to the English Privy Council (important for the use of Islamic finance as the courts will uphold a fatwa from a Sharia board that a contract complies with Sharia) – all of which are attractive to users of Islamic finance products. Further, BVI companies offer a number of benefits in terms of legal flexibility and low costs (in terms of incorporation and maintenance), which make them very popular in such transactions. For example, the British Virgin Islands allows a wide range of corporate entities, including restricted-purpose vehicles, which are commonly used for structured finance transactions including sukuk. There is a valuable element of flexibility for joint venture ormusharakah directors compared to other offshore jurisdictions: a director of a joint venture company can act in the best interests of one of the joint venture partners rather than the company. Finally, BVI companies can have an additional name in Arabic, which is also attractive on the Islamic market.
Based on the aforementioned points, there is likely to be an increase in Islamic asset managers using the British Virgin Islands to take advantage of the new BVI fund products launched during 2015. In addition, there will likely be a continual increase in Islamic financial institutions and investors using BVI companies in Islamic finance structures such as musharakah and murabahah – particularly in respect of investment into the Middle East, Africa and Asia Pacific. Specifically, it is only a matter of time before existing BVI structures holding high-profile hotels and other real estate assets in the Middle East will be refinanced using Islamic finance products.

These are exciting times for Islamic finance globally, with the last five years having seen unprecedented growth in the market. This growth is predicted to continue into the foreseeable future and, given its role in the global financial markets, the British Virgin Islands will continue to be a major player in international Islamic finance through the use of its flexible and progressive legal system.
(Lexology / 04 Febuary 2016)
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Islamic Banking in Kashmir

Islamic finance for all: There are three different perspectives to look at the idea of Sharia’h-compliant banking & finance. One is religious, which is where it has come from i.e. Quran & Sunnah;  the second is purely from the Economics point of view, wherein people express their interest in it only because they see it as a viable alternative to the current financial system. However, being Muslims as well as responsible global citizens, we should actually be concerned with both the reasons; hence go with the third perspective of having both the reasons. At the time, when Islamophobes are at their best to reduce Islam to an obsolete 6th century Arab doctrine, what better response could be to it other than offering to them a recession-proof & just economic system, which shall ensure their financial stability and that of their children. It must be noted that Islam does not restrict this system only to the Muslims but it’s open to Non-Muslims as well. It is with the same spirit that we have come up with ‘Islamic Banking Kashmir’ (IBK), which is a Research, Advocacy & Awareness group, based in J&K. However, before anyone talks about its advocacy or its benefits, the general public has a right to know the legal hurdles in the way of its implementation.
Regulatory impediments for us: The banking industry in India is currently governed by The Banking Regulation (BR) Act 1949, The RBI Act 1934, The Cooperative Societies Act & The Negotiable Instruments Act 1961. Certain sections of the said acts are in contradiction with the foundational theory of Islamic banking. Examples: The section 21 of the BR Act necessitates the interest on Deposits. The idea of ‘Profit & Loss Sharing investments’ is clearly prohibited by its sections 5(b) and 5(c). And the section 8 of the BR Act disallows any bank to directly or indirectly buy, sell or barter goods, which closes the door for Islamic bank’s concept of Murabaha in which banks enter Sale & purchase agreements (Edgeverve).  There are three ways to introduce Islamic banking/finance: One is a Stand-alone Islamic bank, second is to open a Special window for Interest Free banking within a Conventional bank & the 3rd is to go for a Non-Banking Finance Corporation (NBFC). Since an NBFC does not fall under the jurisdiction of BR Act, it remains a possibility in Kashmir even this time, on the lines of Cheramaan group in Kerala. The 2nd option of ‘Special window’ has recently been recommended by a high level RBI committee headed by Mr. Deepak Mohanty. The committee had sought suggestions from the concerned entities and we at IBK wrote to the Principal Chief General Manager, Reserve Bank of India, Financial Inclusion and Development Department, Mumbai& gave our suggestions. Within few days we shall also write to the Finance Ministry of India and the RBI governor. The 1st option of a stand-alone Islamic bank seems to be a little far, at the moment.
  Why Islamic banking? Coming back to the various perspectives and motivations to seek this alternative form of finance, let’s delve into them a bit. As far as the argument of freedom of religion goes,  Riba’(Usury/Interest) is the only sin in Islam, wherein such an individual has been declared to be at war with God, categorizing it as an uncompromisable tenet of Islam. The Economics argument can be proven by the fact that Not a single Islamic financial institution has had to be bailed out with tax payer’s money, even during the 2008 sub-prime mortgage crisis (This is not to say that all the financial institutions who claim to be Islamic are really so, but even such opportunists who only want to tap Muslim market use some Islamic contracts, which saved them too). The reason being that no transaction takes place in an Islamic bank, unless it is backed by an asset. Such a principle does not let the industry create the currency out of thin air to lend that & charge interest from the poor individuals at the micro level or countries at the macro level, who crumble under the debt-bubble, which eventually bursts. The money gets concentrated within few people, which makes them richer and the interest payments make majority of the people poorer, hence the disparity. This is no less than a slaughter. This is the channel through which the financial institutions like the IMF, The World Bank or WTO get to control the resources of poor nations, when they fail to pay back debt. Islamic economics believes in risk-sharing & not the financial engineering of risk-transfer, in which only one party takes the risk and the other fats his belly & earns interest doing nothing for it. It’s very simple to understand that anybody who bequeaths wealth will always get wealthier without having to work for it, while the one who is born poor will always get poorer by paying that interest for the loan, which his earlier generation had got, by his sweat & blood. Moreover, our unemployed youngsters who want to start business ventures can benefit from Mudaraba, in which both the bank as well as the applicant will use their resources and expertise to make the applicant’s initiative profitable, as both shall have a stake in its success unlike the current system which is only concerned with the interest they earn on their disbursed loan amount and sealing the mortgage of the applicant, if the start-up fails. However, It resembles Venture Capital financing but here the investment is restricted only to the permissible sectors and it does not invest in the companies which having a zero conventional debt capital structure.  So, it actually fuses economic viability with Islamic permissibility, rendering it a reliable option.  

Conclusion: This is a vast field which can not be summed up in a column. We may still have numerous questions unanswered. However, the time has come for it and we need to help each other to seek knowledge and then seek permission from the concerned authorities, so that those amongst us who prefer it, shall have an option and they don’t find the current financial system at loggerheads with their faith or their freedom of choice. I look forward to your support.
(Greater Kashmir / 05 Febuary 2016)
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Wednesday, 3 February 2016

Al Madina Takaful named ‘Oman Insurer of the Year’

Muscat - 
Al Madina Takaful was named ‘Oman Insurer of the Year’ at the MENAIR Insurance Awards 2016 held on January 27 in Dubai.

The company was named a finalist in three categories and won the ‘Oman Insurer of the Year’ award beating competition across both takaful and conventional insurance segments in Oman, a press release said on Tuesday.
Al Madina was the only insurance company from Oman to be recognised at this year’s awards, which are judged by an independent panel of experts and recognise excellence of companies and people in the industry.
The awards are judged by an independent panel of experts and recognise excellence of companies and people in the industry.
Speaking at the awards ceremony, Gautam Datta, CEO of Al Madina Insurance Co, said, “Wining the ‘Oman Insurer of the Year’ award is remarkable, as this the first time we are being recognised in the larger insurance industry, beyond the takaful segment we operate in. This is a milestone achievement for the organisation beating both local and regional players operating in Oman, and comes at a time when the industry is facing tough challenges. It’s a great reward for the hard work and commitment of our team, business partners and clients. A huge thank you to all.”
Speaking on the success, Usama al Barwani, deputy CEO of Al Madina Insurance Co, said, “It give us immense pride to be chosen as ‘Oman Insurer of the Year’. This is a coveted platform, and we are excited to be chosen to represent the industry in this stature. It inspires us further to meet and exceed customer expectations and excel in the way we do business.”
(MuscatDaily.Com / 02 Febuary 2016)
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Islamic Banking Is Dominant in Saudi Arabia

Saudi Arabia Islamic Banks Dashboard here DUBAI/LONDON, February 02 (Fitch) In a new report, Fitch Ratings says Islamic finance is a mature and developed industry in Saudi Arabia, representing about two-thirds of total bank financing. About 38% comes from Islamic banks and 28% from the Islamic windows of conventional banks. There are 12 licensed commercial banks in Saudi Arabia. Four are fully sharia compliant with the remainder providing a mix of sharia-compliant and conventional banking products and services. Due to the largely Islamic finance nature of the lending market in Saudi Arabia, the performance and credit matrices of both Islamic and conventional banks are to a large extent similar (for more information on Saudi banks see Saudi Banks: Peer Review at Al Rajhi Bank is the largest Islamic bank in Saudi Arabia, and also the largest Islamic bank internationally with assets of SAR325.2bn (USD87bn) at end-3Q15. National Commercial Bank (NCB) is aiming to convert to a fully sharia-compliant bank following its IPO in 2014. NCB's loan book is already majority sharia compliant and once the bank is fully compliant it could replace Al Rajhi Bank as the world's largest Islamic bank. NCB has a large investment portfolio that will be more challenging to convert into sharia-compliant securities, in terms of availability and variety of appropriate alternatives and maintaining the current yield on the portfolio. Saudi Arabia has the largest Islamic bank asset base of any country that allows commercial banks to operate alongside Islamic banks. All banks are subject to a single supervisory authority and the same disclosure requirements. The Saudi Arabian Monetary Agency (SAMA) regulates sharia-compliant banks in the same way as it regulates conventional banks. No special treatment is applied to Islamic products and no additional support is given to Islamic banks. However, as a predominantly Muslim market, and now that similar retail products exist in both conventional and sharia-compliant form, Islamic banking is seeing the fastest growth. In Saudi Arabia, banks benefit from large volumes of local currency liquid assets, including government securities and deposits with SAMA. However, one of the key differences between conventional and Islamic banks is the structure of their liquidity/investment portfolios. This is because Islamic banks have far fewer sharia-compliant investment options. These are mainly cash and central bank deposits, such as "mutajara" or "murabaha", which are therefore relatively low risk and low return. Investments also include sukuk issued by other Islamic banks. High spending, particularly in the form of large government projects, has started to reduce due to stricter screening, delays and cancellations, as the government reduces spending to match lower oil revenues. We expect the tougher economic environment to continue for at least two years. The challenging operating conditions are likely to affect earnings, with profitability metrics growing less quickly and possibly declining. Fitch also expects asset quality metrics to deteriorate over the next two years. The full report, Saudi Arabia Islamic Banks Dashboard is available at or by clicking the link above. Contact: Bashar Al Natoor Global Head of Islamic Finance +971 4 424 1242 Fitch Ratings Limited Al Thuraya Tower 1 Office 1805 Dubai Media City Redmond Ramsdale Director +971 4 424 1202 Media Relations.

(Reuters / 02 Febuary 2016)
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Kuwait Finance House considering capital-boosting sukuk

Jan 31 Kuwait Finance House (KFH), the country's biggest Islamic lender, is studying the issuance of Islamic bonds that would boost its capital reserves, its top official told Arabiya TV on Sunday.
The offering still requires necessary approvals, its chief executive Mazen al-Nahedh told the channel.
The firm could issue capital bonds that either enhance its core Tier 1 capital or its supplementary Tier 2 capital.
Besides sukuk plans for the parent company, KFH is also planning to issue Tier 2-enhancing sukuk this year for its Turkish subsidiary.

"We are about to issue Tier 2 sukuk, for the subsidiary bank in Turkey, and we expect the issue will happen this year to support its capital situation so it can grow," he added. 
(Reuters / 31 January 2016)
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Monday, 1 February 2016

Kenyan government to institute Islamic Finance

Kenya is preparing to allow the use of Islamic finance, and is even preparing to launch its first sukuk. 

Kenya is a Christian-majority country. Until now, when Muslims do business in Kenya, they have not been able to apply Islamic Sharia law as most Kenyan institutions are not accustomed to it. 

But the government is now taking steps to bridge this gap. 

Speaking at the International Islamic Finance conference of Africa, the first ever summit of its kind ever to be held on African soil, in Nairobi on Monday, Treasury Secretary Henry Rotich said that the Kenyan government would adopt legislation that would make Islamic finance possible – previous financial legislation did not permit the use of the alternate forms of banking and insurance which is based on the principle of not collecting interest. 

“Kenya will be issuing Sharia-compliant sukuk bonds in the coming year, and these will be used to finance infrastructure, Kenya will also join the organization of Islamic countries and adjust rules and regulations in the financial sector to support shari’a-compliant products in the market,” Rotich said. 

The conference is intended to aid developing countries in Africa to tap into the $2.1 trillion market of Islamic finance, using it as a catalyst of economic growth. Kenya can learn about the application of Islamic finance by taking advice from Muslim countries, Rotich said.

Policymakers’ business leaders and government officials spent Monday and Tuesday speaking on how Islamic financial principles can help combat poverty and alleviate poverty in Africa. 

Developing countries were given a chance to learn from actors in more mature markets on how to use Islamic microfinance as a tool for promoting economic growth for low-income workers and business owners. 

It is hoped that the development of Islamic Finance in Africa will help woo investors from Muslim countries to come and invest in developing countries in the region, conference participants said.
(Anadolu Agency / 28 January 2016)
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