Central banks of the Islamic countries have been urged to adopt a separate set of regulation including a complete new Islamic Financial Reporting Standard to reduce confusion among Muslim scholars, Islamic bankers said at a two-day conference.
They have also urged the regulators to develop an Islamic Inter-bank offered profit rate — to benchmark their rates and reduce dependence of the conventional interbank offered interest rates………………………………………..Full Article: Source

The Sukuk Law has been approved by President Mohamed Morsi and was published in the official gazette on Wednesday. The government is now set to hold two bidding rounds for sukuk projects, the first to be held in US dollars and the second in Egyptian pounds.
Tarek Al-Ghamrawy, an economist at the Egyptian Centre for Economic Studies, said he had looked at some articles of the law and had noticed two positive points…………………………………….Full Article: Source

Governor Reserve Bank of India (RBI), Dr D. Subbarao today said RBI will not create any huddle, if Government of India allows Islamic Banking in the country. Addressing a press conference here, after the conclusion of Central Board of Directors (CBD) meeting, the RBI Governor said that different Banks operating in the state will increase their Credit Deposit Ratio (CDR) from existing 36.5 percent to 40 percent so that more loans would be given to the people who require it.
“Let me clear to you. It is not RBI, which is standing in the way of starting of Islamic Banking in the country. It is the government which has to determine, whether to allow the Islamic Banking or not,” he said…………………………………….Full Article: Source

The Reserve Bank said Islamic banking is not consistent with current banking laws in India. “We got to see that Islamic Banking which does not allow charging interest or taking of interest is inconsistent with our existing laws… All that I am saying is Islamic banking is not consistent with current banking laws,” RBI Governor D Subbarao said after the board meeting.
Charging of interest is necessary to conduct banking operation in India because banks have to borrow on which it has to pay interest rate, he said, adding banks have to deposit excess cash with the Reserve Bank on which they get interest…………………………………….Full Article: Source

Pakistan’s securities commission has established a nine-member Shari’ah advisory board to oversee Islamic finance instruments in the world’s second most populous Muslim nation, a centralised approach increasingly being adopted elsewhere around the globe.
A country-level approach to regulating Islamic products was pioneered by Malaysia, and in recent months other economies have introduced central Shari’ah boards of their own including Dubai, Oman and Nigeria…………………………………….Full Article: Source

The Finance Ministry has approved a 6-billion-baht fund for recapitalization of the Islamic Bank of Thailand, of which the ministry is the major shareholder.
According to the Islamic Bank managing director, the Finance Ministry has given the green light to a project aimed at reviving the bank after it has been plagued by the problem of non-performing loans (NPLs). Out of the 6-billion-baht rehabilitation fund, 3 billion will come from the ministry itself, and the rest from the Government Savings Bank and the Krung Thai Bank, which are shareholders of the Islamic Bank…………………………………….Full Article: Source

RBI governor D Subbarao on Wednesday said implementing Islamic banking model in India would be impossible because it is inconsistent with the banking regulatory set-up where interest is charged and given. However, he said he has suggested the government that the decision being political, it must debate and, if required, bring in a law.
“It can be a parallel system for which a separate regulatory set-up can be created,” the governor said. “It is a political issue,” he said………………………………………..Full Article: Source

Considering the fact that Islamic finance is growing in the country with total assets of Islamic finance institutions hovering near a trillion rupees, the Securities and Exchange Commission of Pakistan (SECP) established a central advisory board to guide their transactions in accordance with the principles of Shariah.
In a press statement issued on Wednesday, the SECP said that considering the need for Islamic Financial Institutions and Islamic Capital Markets to innovate and operate within the purview of Shariah principles and to ensure aforesaid organisation’s business dealing were in line with Islamic principles, the equity market watchdog deemed it necessary to have a Shariah Advisory Board………………………………………..Full Article: Source

The Central Bank of Azerbaijan (CBA) does not currently consider amending the domestic legislation to ensure the implementation of Islamic banking in Azerbaijan, CBA Chairman Elman Rustamov said.
Prohibition on charging interest for loans is the major distinction between Islamic and Western-style banking. Instead of interest, Islamic banks take a stake in businesses to which they loan money and share both the profit and loss with the client………………………………………..Full Article: Source

The Securities and Exchange Commission of Pakistan has passed three orders against a takaful company for not complying with the provisions of the Insurance Ordinance, 2000, and the Companies Ordinance, 1984, in which one of the orders relates to the interpretation of the exemption given under Proviso to Section 187(h) of the Companies Ordinance, 1984.
Moreover, the insurance division of SECP has also passed an order against a Life Insurance Company under Section 130(2) of Insurance Ordinance, 2000, as a result of adjudication of an appeal against the order of the federal insurance ombudsman………………………………………..Full Article: Source

Dana Gas’ Islamic bonds rallied last week, sending the yield down eight times more than the Arabian Gulf average, after the UAE-based fuel producer agreed on debt-refinancing terms.
The yield on the 7.5 per cent notes, originally due in October 2012, tumbled 40 basis points in the five-day period to 8.05 per cent, data compiled by Bloomberg show. That compares with a five basis-point drop for companies in the Gulf Cooperation Council (GCC) to 3.7 per cent, according to the HSBC/Nasdaq Dubai GCC Corporate US Dollar Sukuk Index. Dana Gas’ shares surged 7.7 per cent on Sunday, the most since December………………………………………..Full Article: Source

The passing of a new law that would legalize Islamic bonds by Egypt’s upper house a day ago could trigger an investment windfall for the highly indebted country, the chairman of Egypt’s stock exchange said. Mohammed Omran said the underdeveloped bond market at the Nile would get a boost by the new law which increases certainty for foreign investors.
“The share of financing based on capital markets increased to 25 percent last year from 10 percent in 2005, but 75 percent of financing is still provided from loans granted by banks,” said Omran………………………………………..Full Article: Source

Reuters quotes new Islamic Finance Chief Executive Officer Amman Muhammad as saying, “In the new structure, we no longer call them a board, we’re using the term ‘sharia advisory committee’ and we now clearly define what the role of the committee is.”
He also revealed the bank’s plans to rebrand Islamic Finance, “We’re proposing to go to the market at the start of our new financial year with the name FNB Islamic Banking. It’s important for us to build our credibility in South Africa, (while) FNB acts as a conduit between us and other African countries,” he told Reuters………………………………………..Full Article: Source

The Islamic division of First National Bank (FNB) has hired a new sharia advisory committee and aims to rebrand itself after a governance crisis last year resulted in the previous board quitting, denting investor confidence.
Under the new structure, the committee will no longer play a role in the day-to-day running of the business, removing the potential for conflicts like those that led to a public spat with management last year………………………………………..Full Article: Source

The Executive Training Programme for Islamic Banking concluded at Qatar Faculty of Islamic Studies (QFIS) recently. The training programme, which aims at developing Islamic finance skills towards better understanding of its principles and products, is specially designed for Qatar Islamic Bank (QIB) finance employees.
The training introduced a comprehensive fundamental perspective about Islamic securitisation, gave tips on how to manage Islamic investment funds and studied their potentials………………………………………..Full Article: Source

Egypt’s Finance Ministry on Wednesday hailed the consent of Al-Azhar, the country’s highest Islamic reference, to the Islamic bonds (sukuk) draft law.
“The final unanimous approval of the sukuk bill among various members of the Shura Council (the upper house) and Al- Azhar represents a strong push to this new investment finance system in the country,” official news agency MENA quoted Ahmed al- Naggar, the finance minister’s adviser, as saying………………………………………..Full Article: Source

The passing of a new law that would legalize Islamic bonds by Egypt’s upper house a day ago could trigger an investment windfall for the highly indebted country, the chairman of Egypt’s stock exchange said here on Wednesday.
Mohammed Omran, at the ongoing two-day Africa Global Business Forum, said the underdeveloped bond market at the Nile would get a boost by the new law which increases certainty for foreign investors………………………………………..Full Article: Source

The Islamic Banking Division of United Arab Bank (UAB), the fastest growing bank in the UAE, has signed a memorandum of understanding (MoU) with Minhaj Advisory — one of the most prominent Shari’ah compliant consultancies in the region. The services extended by Minhaj Advisory will include introduction of Shari’ah compliant products, contracts, supervision, auditing and training.
Minhaj will form a Shari’ah Supervisory Board (SSB) with three reputable Islamic scholars at the helm to extend their guidance regarding provisions and principles of Shari’ah related to transactions and activities of the current and future Islamic products and services provided by UAB’s Islamic banking division………………………………………..Full Article: Source

The services extended by Minhaj Advisory will include introduction of Shari’ah compliant products, contracts, supervision, auditing and training. Minhaj will form a Shari’ah Supervisory Board (SSB) with three Islamic scholars at the helm to extend their guidance regarding provisions and principles of Shari’ah related to transactions and activities of the current and future Islamic products and services provided by UAB’s Islamic banking division.
Sheikh Mohamed Al Nuaimi, Executive Vice-President, United Arab Bank said, “Being the fastest growing bank, we always strive to offer the full range of banking products and services to our valued customers. ……………………………………….Full Article: Source

The National Insurance Commission (NAICOM) has issued the guidelines for takaful as part of efforts to increase insurance penetration in Nigeria and boost the contribution of insurance to the national GDP.
According to a circular outlining the guidelines, all applicants seeking licences from the Commission to transact takaful business in Nigeria must possess the Certificate of Registration as a full-fledged takaful company in accordance with international best practice. In addition, such a company must have, as part of its name, words or terminologies that connote takaful operations………………………………………..Full Article: Source

Many global leaders in securities and finance have gathered in Tehran to exchange ideas on the Islamic financial markets, find methods to enhance sustainable growth in Islamic financial markets and strengthen Islamic capital markets. These were the focal points discussed at the 5th International Orientation Course on Islamic Capital Markets held in the Tehran.
Financial experts from 16 countries such as Pakistan, Egypt, Sudan and Austria attended the event. Many are resorting to Iran’s financial and energy exchanges since the country is the 4th largest producer of petroleum and oil worldwide and is the 2nd largest exporter to the Organization of the Petroleum Exporting Countries (OPEC). ……………………………………….Full Article: Source

Al-Azhar’s Council of Senior Scholars submitted its objections to the new sukuk law to the Economic Committee at the Shura Council, Tuesday.Abdel Halim Al-Gamal, deputy head of the Economic Committee at the Shura Council, said that the objections were “welcomed unanimously” by the Committee.
He said that the Council objected to articles 1, 2, 3 4, 9, 11, 20, 22 and 30.“The scholars objected to issuing sukuk for religious endowments because they violate Sharia Law,” said Al-Gamal………………………………………..Full Article: Source

Oman’s central bank plans to issue rules to boost lending to small and medium-sized firms, its chief said on Wednesday, in a new move to help bring unemployment down in the sultanate.
Supporting smaller firms is a key part of the government’s economic policy for tackling unemployment in Oman, estimated at more than 24 percent by the International Monetary Fund……………………………………….Full Article: Source

Oman’s central bank plans to issue rules to boost lending to small and medium-sized firms, its chief said on Wednesday, in a new move to help bring unemployment down in the sultanate.
Supporting smaller firms is a key part of the government’s economic policy for tackling unemployment in Oman, estimated at more than 24 percent by the International Monetary Fund.But bank lending growth in Oman hit a 22-month low of 10.9 percent in February, central bank data showed………………………………………..Full Article: Source

A royal decree in Saudi Arabia has shaken up the way in which the government allocates vast tracts of land, removing an obstacle to a $67 billion program to ease the country’s housing shortage.
King Abdullah originally announced the housing scheme in March 2011. His plan to build 500,000 homes over several years was part of a series of official steps to improve social welfare, at a time when social discontent was prompting uprisings in other Arab countries………………………………………..Full Article: Source

The newly established Abu Dhabi World Financial Market will need a regulator and lawyers are now asking what form that is likely to take.On Wednesday, The National reported that the UAE had signed into law the creation of a financial free zone for Abu Dhabi on Al Maryah Island.
“This carves a free zone out of a whole host of federal regulations,” said Kai Schneider, a partner at the law firm Latham & Watkins. “As a result you would need an alternative regulator to be in place.”……………………………………….Full Article: Source

The Sovereign Sukuk Insurance Policy was approved by the Board of Directors of the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) at a recent meeting held at the Islamic Development Bank’s headquarters in Jeddah.
Under the Chairmanship of Dr. Ahmed Mohamed Ali, President of the Islamic Development Bank Group, the Board authorised the ICIEC to launch the product, which will insure Sukuk investors against default on Sukuk issued by Sovereign entities of member countries………………………………………..Full Article: Source

Shareholders of Abu Dhabi-listed energy firm Dana Gas approved on Tuesday a plan to restructure its $920 million Islamic bond, the company said.
Last October Dana became the first company in the United Arab Emirates to miss repayment of a maturing bond, but it subsequently agreed new terms with a creditor committee representing bondholders, which included investment firms Ashmore Group and BlackRock………………………………………..Full Article: Source

Senior Shariah scholars and advisers of Islamic banks and conventional banks with Islamic windows have agreed to standardise Forex and interbank Musharakah agreements between Islamic banks and Islamic banking windows.
This move will facilitate the availability of Shariah-compliant venues for deployment of excess liquidity of Islamic banks. This agreement was reached during a meeting called by Meezan Bank Ltd, in which Shariah scholars discussed the challenges in Islamic Treasury Operations………………………………………..Full Article: Source

“Laws are like sausages,” remarked Prussia’s “Iron Chancellor”, Otto von Bismarck; it is best not to ask what compromises go into them. The Muslim Brotherhood, which controls both Egypt’s presidency and its acting legislature (the creation of a full parliament awaits a new electoral law and elections), has been trying to design what might be called pork-free legislation, in accordance with Islamic sharia. But it is meeting resistance from an unexpected quarter, fellow Islamists.
Egypt’s economy is sinking, and its government desperately needs finance. The Brothers are not only keen to show constituents that they are doing something to stem the slide, but that they are putting a more “Islamic” stamp on the country………………………………………..Full Article: Source

The Board of Taxation has submitted its final report into Australia’s tax laws to ensure they do not inhibit the provision of Islamic finance, banking and insurance products, Parliamentary Secretary Bernie Ripoll has told the Amanie Australia Islamic Finance Forum in Melbourne.
The report was based on recommendations in the 2010 Johnson Report which offered policy options to better position Australia as a financial centre. It was about ensuring a “fair and level playing field” according to Ripoll, and to ensure that Islamic financial products had parity of tax treatment with conventional products…………………………………….Full Article: Source

A law that will allow Egypt’s Islamist-led state to issue Islamic bonds contravenes the sharia in numerous ways, according to a panel of senior Muslim clerics whose objections are likely to hold up ratification of the legislation.
President Mohamed Mursi of the Muslim Brotherhood referred the law to the Senior Scholars Authority of Al-Azhar, a thousand-year seat of Islamic learning, after it was driven through parliament by his Islamist allies last month………………………………………..Full Article: Source

Sobhi Saleh, a leading Freedom and Justice Party figure, harshly criticized the Salafi Nour Party over its stance against a law that would allow the state to issue sukuk, or Islamic bonds. He called on the Nour Party to stop “analyzing and prohibiting matters for certain political gains,” after the party threatened to challenge the sukuk law before the Supreme Constitutional Court.
Last month, the FJP-led Parliament approved the draft law on sukuk, referring it to President Mohamed Morsy, who in turn referred it to the Al-Azhar Council of Senior Scholars, a panel of top Islamic scholars, for their opinion. The council approved the draft law………………………………………..Full Article: Source

Uganda is amending a law that will usher in Islamic banking, allowing banks to sell Sharia-compliant financial products in the country. The country is a member of the Organisation of Islamic Cooperation (IOC), but it its domestic legislation does not allow for the establishment of Islamic banking and finance.
The Ministry of Finance has been blamed for delaying the enactment of amendments to the Financial Institutions Act of 2004 which would provide for Islamic banking and finance………………………………………..Full Article: Source

Egypt’s top religious authority on Thursday approved a law that would allow the Arab country struggling with a soaring budget deficit to issue Islamic bonds but said some articles passed by parliament must be amended.
The parliament led by the Muslim Brotherhood’s Freedom and Justice Party approved the law in March and referred it to President Mohamed Mursi. Al-Azhar, the country’s leading Islamic authority, protested, saying its top scholars should have been consulted, as stated in the new, Islamist-tinged constitution………………………………………..Full Article: Source

Record growth in the Islamic financial services (IFS) segment in 2012 firmly cemented Saudi Arabia as a global leader in the industry. However, while the segment looks set for further growth several industry leaders have called for greater regulatory uniformity across global markets.
The Kingdom issued $10.5bn in sukuk in 2012, a 278% increase over 2011, according to a February 2013 report from Kuwait Financial House. While Malaysia remains the world’s top issuer, the Kingdom took the number two spot in 2012, following the $4bn General Authority for Civil Aviation offering, the first government-backed sharia-compliant bond issue, and the single-largest sukuk anywhere to date………………………………………..Full Article: Source

Al-Azhar’s Senior Scholars Authority held an emergency meeting on Monday to discuss the Shura Council’s bill on sukuk (Islamic bonds), which President Mohamed Morsy sent to them to determine if it is compliant with Sharia.
The board discussed the draft law for four hours, and had reservations regarding Article 20, said a source. The article stipulates that the legal committee that would determine whether the sukuk conform to Sharia would be formed by the finance minister, in contradiction with Article 4 of the Constitution, which says that Al-Azhar would rule in all matters regarding Sharia………………………………………..Full Article: Source

In his welcome remarks at the Islamic Finance News Singapore Roadshow, Ng Nam Sin, Assistant Managing Director of the Monetary Authority of Singapore (MAS), pointed out that, despite the expiry of certain tax incentives, Singapore is still looking to develop the city’s Islamic finance capabilities by ensuring it a level playing field with conventional financial products.
To ensure that level playing field between Islamic finance and conventional financial products, he said that Singapore “has recognized the unique characteristics of the former in both regulatory and tax treatments. We have ensured the neutrality of the rules insofar as Islamic financing is similar to conventional financing in economic substance and risks. Where the structures are unique, we have and will continue to work closely with industry stakeholders to ensure that level playing field is preserved.”……………………………………….Full Article: Source

The Shura Council approved in late March a law allowing the issuance of sukuk, or Islamic bonds, which the heavily indebted government touts as a financial tool that can support the ailing economy.
Despite creating a stir for what some claim is essentially allowing vital state assets to be rented or mortgaged by foreigners, as well as drawing criticism from Al-Azhar for being non-compliant with Sharia, the law was pushed through by the Shura Council and is now pending ratification by President Mohamed Morsy………………………………………..Full Article: Source

Eighty per cent of Arab banks are in a position to meet new international regulations on the level of reserves they need to hold while all banks in Bahrain meet these standards, said a top official. Union of Arab Banks (UAB) chairman Adnan Ahmed Yousif was speaking on the sidelines of the annual Arab Banking Conference, which opened at the InterContinental Regency Bahrain in Manama.
Yousif, who is also chief executive of Al Baraka Banking Group, said there were 103 banks from 22 countries taking part in the event which has attracted more than 200 delegates on its first visit to Bahrain as a venue, according to a report in our sister publication, the Gulf Daily News………………………………………..Full Article: Source

Almost 100 per cent Bahraini banks are ready to implement the Basel III new capital requirements of BIS by year-end, a top banker said on Wednesday. The Chairman of the Union of Arab Banks (UAB) Adnan Ahmed Yousif on the sidelines of the Annual Arab Banking Conference 2013 said that the notion that Basel III would destroy the third world banking system was not based on facts.
“Our banks in Bahrain are 100% ready to implement the Basel III standards and almost 80% banks across the Arab region are ready to adopt to the new regulatory framework,” Adnan Yousif, added………………………………………..Full Article: Source

Tax-free Gulf States will eventually be a thing of the past, according to the head of the Union of Arab Banks. Gulf States are said to be considering plans for a value added tax (VAT) by 2015 while also lowering corporate tax rates to increase foreign direct investment, according to the Paying Taxes 2013 report conducted by the World Bank, IFC and PricewaterhouseCoopers.
Adnan Youssif, who is chairman of the union, said that any tax should not be considered a “negative act.” Youssif also expects a good year for Arab banks, estimating that net profits will grow at 15% in 2013. He noted, however “the growth will not be equal in all countries.”……………………………………….Full Article: Source

Singapore’s central bank said it remains committed to developing Islamic financial services in Singapore. Commenting about the lapse of two tax incentives for Islamic finance recently, Assistant Managing Director of the Monetary Authority of Singapore (MAS), Ng Nam Sin, said this was “no reflection of MAS’ continuing commitment to develop Islamic financial services in Singapore.”
“Like all our tax incentives, they have a fixed tenure and in this case, of five years. It is useful to note that Islamic finance activities will continue to be incentivized alongside conventional finance activities under our other existing schemes,” said Mr Ng………………………………………..Full Article: Source

The new set of fund regulations approved in August 2012 by the UAE Securities and Commodities Authority (SCA) is expected to dramatically change the country’s investment landscape.
The decision has been regarded as a step in the right direction for all types of funds as the new rules not only address issues of foreign ownership, liquidity and risk management, but also prescribe guidelines on reporting for both conventional and Shariah-compliant funds………………………………………..Full Article: Source

Oman’s central bank has granted Islamic banks a one-year relaxation of rules on the amount of foreign assets which they can hold, to give time for Islamic financial instruments to be developed domestically.
Oman’s first full-fledged Islamic banks, Bank Nizwa and Al Izz International Bank, were established late last year and are now starting to operate as the country introduces Islamic finance………………………………………..Full Article: Source

The Islamic banking framework is expected to become operational before the end of the year, the Bank of Zambia (BoZ) has said. BoZ governor, Michael Gondwe said the central bank has held several consultations since 2008 both internally and externally and has also subjected the Islamic banking framework to expert review by internationally-renowned Islamic banking experts.
Dr Gondwe, however, noted that the rapid growth of Islamic finance raises a series of important questions, such as whether Islamic finance should be regulated differently from conventional finance………………………………………..Full Article: Source

Egypt’s Islamist President Mohamed Morsi Sunday referred a controversial draft law on Islamic bonds – sukuk – to Al-Azhar’s Senior Scholars Authority. The Salafi Nour Party has lobbied to refer the draft law to the Al-Azhar in application of the provisions of the Constitution.
A delegation from the Salafi Nour Party, the second largest party in the Shura Council, visited Grand Imam of Al-Azhar University, Ahmed El-Tayyeb, earlier in March to inform him of the party’s position. Last week, Al-Azhar criticized the draft law, saying it gives the prime minister the power to form the authority that issues the bonds………………………………………..Full Article: Source

Although the Islamic Financial Services Act (IFSA) is expected to see some takaful players, especially those with a composite licence, split their life and general operations, it has not deterred their gameplan to strengthen and grow their takaful business amid the growing and competitive Islamic insurance landscape.
The Financial Services Act (FSA) and the IFSA are likely to come into effect by mid this year and would, among others, require conventional and takaful insurers to relinquish their composite licences, and conduct their life and general insurance businesses under separate units or subsidiaries………………………………………..Full Article: Source

An expanded meeting for al Hilal Islamic Banking Sharia Supervisory Board was held recently at ahlibank’s head office in Wattiyah. The meeting was chaired by Dr. Ali Mohyeddin al Qurah Daghi, and included Dr. Farid Mohammed Hadi, Dr. AbdulAziz al Qasar and Sheikh Aflah bin Ahmed bin Hamad al Khalili and Azhar Hamid.
During the meeting of Al Hilal’s Sharia Supervisory Board a number of approvals were attained which included approvals on products and their features, as well as the approval of the prospectus of the upcoming Sharia complaint Al Hilal Mena Fund which will be launched in the near future and approval of this year’s Shaira Audit and training plan………………………………………..Full Article: Source

Islamic banking is sitting on the horns of a double dilemma. Islamic financial institutions have to compete with conventional banks if they have to stay in contention and yet be compliant with Sharia principles while carrying on business.
On the other hand, due to their relatively smaller size and operations, Islamic banking products tend to become more costly, further limiting the scope. In fact, according to the latest numbers out in the market, the average return on equity of Sharia compliant financial institutions has fallen in comparison to the situation one year ago………………………………………..Full Article: Source