Islamic-Finance.RU

Kazakhstan International Halal Expo’ 2017

Admin3 — Wed, 26 Jul 2017 11:57:16 GMT

During the previous years of work, the exhibition showed to be a fruitful business platform for the manufacturers, distributors and suppliers from Russia, Kazakhstan, Uzbekistan, Kyrgyzstan, Azerbaijan, Tajikistan, Ukraine, Belarus, Malaysia, Czech Republic, Egypt, Jordan, South Korea and U.A.E. as well as for the regional and foreign investors and other market participants. The aim of the exhibition is not merely promoting certain products and services and establishing direct contacts with potential customers and new business partners, but finding new markets and establishing new trading routes between and across the Eurasian Economic Union, Middle East and Southeast Asia countries. The event is held under the patronage of the Ministry of Agriculture of the Republic of Kazakhstan, Akimat (administration) of Astana city and “Nur Otan” party. The exclusive partner of the exhibition this year is the National Association of Halal Industry (NASIH) of Russia, which is planning to bring and gather Russian producers and exhibitors under one stand. The exhibition will be divided into thematic sectors. “The best product” contest for food products and beverages, “Buyer-seller” round table for direct talks and negotiations between the producers and the representatives of small business, wholesale and retail companies will be held within the framework of the exhibition. For further information please contact: +7 (843) 567-60-60 +7 (843) 567-60-89 info@nasih-russia.ru

GCC VAT a test for Islamic Finance- Fitch

Admin3 — Tue, 07 Feb 2017 07:38:09 GMT

According to media reports last week, Saudi Arabia and Bahrain approved the implementation of VAT in the GCC; however, local implementation laws must still be agreed in each country. This paves the way for the introduction of an expected 5% VAT rate as early as the beginning of 2018, in a region with little history of taxation. Without tax neutrality or equality rules, the introduction of VAT would put Islamic finance transactions at a disadvantage to conventional transactions. In principal, Islamic finance activities should have a real economic purpose, involving services and/or asset-based or asset-backed transactions. For example, a murabaha sukuk, a simple, commonly used contract, can be summarised as the sale of an agreed asset or commodity at cost plus an agreed profit margin, which may then be financed in instalments. Banks also use murabaha as a means of providing liquidity to their customers, by buying the assets and then selling them to the customer at a mark-up, whilst giving the customer a period of credit in which to pay the purchase price and mark-up. The transaction often involves an arrangement for the bank to sell the assets into the market as agent for the customer and to account to the customer for the proceeds of that on-sale. A VAT charge adds to the instalment payments in a murabaha, while a conventional transaction would not have VAT for the sale of the asset added to the interest payments. It is worth noting that murabaha is only one form of Islamic finance. The tax impact could be even bigger for more complex transactions. Numerous countries with VAT have provided for some form of tax neutrality or equality for Islamic finance transactions, including Malaysia, Indonesia, Turkey and Pakistan. In the UK, the authorities apply a non-discriminatory approach to help ensure a level playing field, with comparable tax treatment of Islamic finance and conventional finance transactions. Our expectation is that the GCC authorities will make Islamic finance tax equality a priority. Given the aim of an aligned GCC VAT framework, we believe these rules would be broadly comparable across the region. Islamic finance represents a substantial proportion of the banking market across the GCC, particularly in Saudi Arabia which has a mature and developed Islamic finance industry, representing about two-thirds of total bank financing at end-1H16, and in Kuwait where it accounts for almost 40% of banking assets. The exact date and details of the framework and local implementation of VAT laws are not yet known. The complexity of some Islamic finance transactions could mean it will take some time. Moreover, if the planned tax treatment for Islamic finance activities is not made clear well in advance of implementation, then the uncertainty could reduce Islamic finance activity and attractiveness in the short term. Source: https://www.zawya.com/mena/en/story/GCC_VAT_a_test_for_Islamic_Finance_Fitch-ZAWYA20170206130038/

Goldmoney adds Shariah-compliant methods to boost investment from Islamic markets

Admin3 — Mon, 30 Jan 2017 09:01:39 GMT

As more and more businesses look to tap demand from Islamic investors, Toronto-based Goldmoney Inc, a financial technology company that operates the world's largest 100 percent-reserved gold-based savings and payments network, said on Monday that its network accounts and wealth holdings have been endorsed as Shariah-compliant by the Shariah Supervisory Board of Amanie Advisors. The Shariah Supervisory Board had earlier issued a fatwa in accordance with the Shariah standard on gold set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and developed in cooperation with the World Gold Council. The move by Goldmoney now paves the way for Islamic investors to instantly purchase, save and transact in gold globally on its platform through the Shariah-compliant window. "Our platform democratizes access to 100% reserved and allocated gold-based savings, payments, and investment solutions, and provides citizens worldwide with the choice to save and transact in a global money that protects their purchasing power and safeguards their wealth," said Josh Crumb, chief strategy officer of Goldmoney. According to Goldmoney, it has more than 1.3 million users across 150 countries and the company administers approximately $1.7 billion in assets. "As a company with an increasingly global client base, our compliance with Shariah law is an important step in our growth, enabling us to expand our offerings to the Islamic market," Goldmoney CEO Roy Sebag said. Islamic finance does not allow gambling and outright speculation and also discourages paying interests, which is prohibited under Islam. Apart from a few GCC countries and Malaysia, India's Reserve Bank in November last year proposed to open an "Islamic window" in Indian banks to gradually include the Sharia-compliant interest-free banking in the country. The Indian government and the RBI are exploring the possibility for quite some time now aiming to include those – primarily Muslims – who for religious reasons have so far opted to stay out of the country's banking system. Source: http://www.ibtimes.co.in/goldmoney-adds-shariah-compliant-methods-boost-investment-islamic-markets-713394

Islamic banking will be most relevant to SME sector: Zafar Sareshwala

Admin3 — Wed, 22 Jun 2016 09:04:41 GMT

For the first time, the Jeddah-based Islamic Development Bank (IDB) has forayed into a non-member country by announcing setting up of a non-banking financial company (NBFC) in India through its 100% subsidiary Islamic Corporation for the Development of the private sector (ICD). Based on the Islamic principle of not charging interest on loans, ICD will operate through a registered office in Mumbai, with prominent businessman from Gujarat, Zafar Sareshwala, heading its India operations as director. In an interview with Vinay Umarji, Sareshwala talks about how the NBFC will play a catalyst for small businesses by sharing their profits and losses instead of charging interest on finance extended. Excerpts:

What kind of entity is Islamic Development Bank (IDB) setting up in India? How will it function?

IDB is a multi-lateral bank like World Bank which does development work in its member nations and has an authorised capital of $150 billion. IDB has not worked in a non-member state before this. During Prime Minister Narendra Modi's recent trip to Saudi Arabia, three developments took place. First, IDB announced donating medical mobile units worth Rs 380 crore. These are full fledged hospital which will be maintained by IDB for five years. These will be used in rural areas, beginning with 30 such units in Gujarat, followed by Bihar and Assam. Secondly, IDB has signed an agreement with Exim Bank for a $100 million line of credit which will result in IDB giving guarantee for Indian exporters in its member states such African or middle Asian Muslim nations.

Thirdly, IDB's 100% subsidiary ICD will set up a NBFC in India as per RBI regulations with a paid up capital of Rs 200 crore. And it is an NBFC that it will function where it will engage in regular financing activities to businesses.

How does the Islamic or participatory banking work?

Under the Islamic or participatory banking, the NBFC of ICD will not charge interest. Rather it will share in the profit and loss of a venture. It is based on Islam's fundamental principle of being part of risk and reward both. The profit or loss sharing is pre-determined before disbursing finance after a thorough due diligence on the prospects of the business. The NBFC will go with a minimum share of 15% but it will vary from industry to industry. We don't want to eat into the entrepreneur's profits. We want to come to him as his catalyst and boost his entrepreneurial spirit. It is a win-win situation for both. Entrepreneur doesn't have to worry about paying interest while the NBFC could end up earning ample profits if the business succeeds which could cover losses elsewhere.

How relevant is it to India?

I think there is a segment in the industry, particularly the SMEs where it will be very relevant. These would people who have skills like Banaras weavers or carpet and glass manufacturers where artisans are involved. They don't require huge funds. And this is the segment where lot of jobs are created. And they are not serviced (by banks) because these industries do not have access to the banks and our focus would be to service such industries. The credit also goes to Prime Minister Narendra Modi's leadership because this kind of money has not come in from IDB into any non-member nation before.

It is being said that your initial operations will be in Gujarat. Why?

Gujarat is densely involved in small and medium enterprises (SMEs). Plus, my affinity is with Gujarat. Hence, we will start operations from Gujarat.

What kind of businesses are most likely to make avail of the Islamic or participatory banking?

Our focus would be manufacturing and engineering exports. This is where a small support is required. We will go with the lowest ticket size. For big people, finance is easily available. We want to get into the small businesses. NPAs are least among small businesses.

What is the market for Islamic banking in the country and globally? How much share do you look to tap in this?

EY has estimated the global Islamic fund at $1 trillion. We believe there is huge potential for Islamic banking in India. People have a wrong notion that this is only for Muslims but it is not so. Gradually, we should see larger acceptance.

What kind of services will the NBFC offer?

For now, basic NBFC activities of extending finance will be conducted. However, one area which IDB is looking at in near future is the Waqf fund where Waqf properties worth crores of rupees are lying in dilapidated condition. The problem with the Waqf board and trust which own and run these properties is that they don't have money. You need someone from the outside who can redevelop them. It will create huge potential for such properties such as slum rehabilitation under Waqf. The Waqf fund is worth billions of dollars and we have identified few properties which can be redeveloped initially.

When and where will the next unit come up? What are your future expansion plans?

We will have a registered office in Mumbai and we will work across the country. But Gujarat would be one of the important target markets for us. We have not set any targets for future expansion.

RBI on Islamic banking

A panel on financial inclusion headed by RBI executive director Deepak Mohanty came up with recommendations on interest free banking in December 2015.

It had recommended that commercial banks in India may be enabled to open specialised interest-free windows with simple products like demand deposits, agency and participation securities on their liability side. The commercial banks may be allowed and to offer products based on cost-plus financing and deferred payment, deferred delivery contracts on the asset side.

In the event that interest-free banking is allowed in India, the regulatory guidelines for capital and liquidity applicable for commercial banking would have to be made applicable to those (interest-free banking) as well.

Sourse: Business Standard

Russia and Pakistan using Islamic finance to build stronger business ties

Admin3 — Thu, 09 Jun 2016 13:08:11 GMT

Russia and Pakistan intend to use Islamic finance to bring the two nations closer together economically amid a drive by Moscow and Islamabad to strengthen Russo-Pakistani relations through enhanced military cooperation.

An MoU, supported by the Trade Development Authority of Pakistan (TDAP), was signed between Kazan’s Islamic Business and Finance Development Fund (IBFD Fund) and TAWUN, a Pakistani Shariah consulting firm under which both parties will jointly support Russian and CIS financial institutions to launch Shariah compliant products and services, expand their clientele and penetrate new markets as well as secure additional funding and investments from OIC countries. SM Muneer, CEO of the TDAP, has hailed this partnership as an «important milestone» in the trade and business relations between the two countries and has pledged his full support in realizing the objectives outlined by the MoU.

While Pakistan has an established Islamic banking and finance market spanning decades, Russia, on the other hand, is relatively new to the industry. The Kremlin is, however, aggressively pushing to develop its Shariah finance market in a bid to lure Gulf wealth as its economy continues to suffer from sanctions imposed by the US and Europe, leaving Russia to turn to the Middle East and Islamic countries to shore up its faltering economy.

Russia is still without a proper regulatory infrastructure (and institutional capacity) to effectively support Shariah finance; however, the world’s largest nation is making steady progress – with the help of Islamic finance heavyweight Malaysia. A working group from the Central Bank of Russia is currently studying the feasibility of engineering a dedicated regulatory infrastructure for Shariah banking services while the country’s largest bank, Sberbank, is on track to execute several Islamic financial transactions in the final quarter of 2016.

Home to the largest Muslim population in the European continent (10% of its population according to Pew Research), Russia holds a compelling Islamic finance proposition, particularly in the Republic of Tatarstan – the strongest Russian Islamic finance advocate – where more than half of the population identify as Muslims, and foreign institutions including TAWUN recognize this. Mehmood Arshad, the founder of TAWUN and the chairman of the Federation of Pakistan Chambers of Commerce & Industry’s Standing Committee on Islamic Banking & Takaful, sees this collaboration with the IBFD as an important step to an active role in Russia especially in Tatarstan. «Pakistan’s Islamic banking and regulatory system is the best in the region and TAWUN has all the necessary experience and competence to share knowledge and experience with our Russian friends», he said.

Path Solutions joins CIBAFI, the world renown General Council for Islamic Banks and Financial Institutions

Admin3 — Thu, 31 Mar 2016 08:27:29 GMT

CIBAFI is an international organization established in 2001 and headquartered in the Kingdom of Bahrain. It is affiliated with the Organization of Islamic Cooperation (OIC).

CIBAFI represents the Islamic financial services industry globally, defending and promoting its role, consolidating cooperation among its members and with other institutions with similar interests and objectives.

With nearly 120 members over 30 jurisdictions, representing market players, international intergovernmental organizations, professional firms and industry associations, CIBAFI is recognized as a key player in the international Islamic finance marketplace.

Path Solutions’ membership with CIBAFI will serve as an excellent opportunity to collaborate with the renown institution to advance the development of the Islamic financial services industry and to benchmark and further ensure conformity of the company’s Islamic software solutions and services with the Sharia.

About Path Solutions

Path Solutions is a leading IT provider offering a broad, deep spectrum of Sharia-compliant integrated solutions and services to the Islamic financial marketplace.

Designed to meet the needs of modern Islamic banking, Path Solutions’ turnkey solutions are based on an open, flexible architecture and an established deployment methodology. They have been tested and implemented at some of the world’s most sophisticated Islamic banks, Islamic banking windows as well as conventional banks converting into Islamic banking operations.

Path Solutions’ flagship product – iMAL, provides a complete suite of Islamic banking applications with a rich sweep of functionality and features, addressing Sharia compliance, local and regulatory requirements.

The company has built a leadership position by continuously innovating in differentiated, mission-critical software solutions to stay at the forefront of the Islamic financial industry.

Path Solutions’ team of qualified professionals and complementary solution partners have an unparalleled ability to address regulatory and Sharia compliance requirements at both international and regional levels. Armed with deep industry expertise and field-tested best practices, the company’s team strives to provide the highest quality services to clients all over the world.

"Kazakhstan Islamic Finance 2016: a new frontier for Islamic finance" country report

Admin3 — Mon, 28 Mar 2016 09:01:18 GMT

Foreword

Executive Summary

Macroeconomic Outlook

Islamic Finance Overview

Banking Sector at a Glance

Islamic Banking Growth Prospects

Azerbaijan looks to new Islamic bank as sector rules progress

Admin3 — Fri, 19 Feb 2016 08:32:32 GMT

Azerbaijan could see the launch of its first standalone Islamic bank as early as next year as the government makes progress to introduce legislation to facilitate interest-free finance, an advisor to the new venture told Reuters.

The move could reverse the fortunes of Islamic finance in the former Soviet state after the International Bank of Azerbaijan (IBA), the country's largest lender, closed its Islamic banking department in October.

Azerbaijan, alongside Kazakhstan and Tajikistan, are among several central Asian countries creating a more welcoming framework for sharia-compliant banking with the help of the Jeddah-based Islamic Development Bank.

A working group of cabinet minsters and the IDB is making progress on the legislation, which would allow the proposed Islamic bank to launch next year, said Behnam Gurbanzada, chief executive of Islamic finance consultancy BEST Solutions.

«They are working on legislation together with the Islamic Developemnt Bank and they are keen to develop this process, this banking model», said Gurbanzada, a member of a regional Islamic banking advisory council.

«The bank's name will be announced in two months, it will be a new Islamic bank in the market».

Islamic finance transactions have been developed in the country, such as lease-based financing for SMEs, although specific rules could broaden the types of products while making them easier and cheaper to design.

The market downturn has also increased demand from corporate clients for alternative financing sources, Gurbanzada said on the sidelines of an industry conference in Dubai.

«Today the market needs long-term financing, it should be based on investments and partnerships rather than just loans and credit».

The new Islamic bank would use a branchless model, aiming to reach a wide client base in Azerbaijan, where an estimated 93 percent of the 9 million people are Muslim.

Linar Yakupov received an award for his contribution to the development of Islamic finance industry in Russia

Admin3 — Thu, 14 Jan 2016 22:52:24 GMT

The advisor to the Prime Minister of Tatarstan on dealing with Islamic financial institutions has received a diploma from the Advisory Board on Islamic economics and finance within National Rating Agency (NRA).

The awarding ceremony of the diploma “For the big personal contribution to the development of Islamic finance industry in Russia in 2015” took place in Gaidar Forum within the expert discussions “Islamic Finance: industry forming issues”. The Forum is an annual intellectual platform – one of the largest annual economics scientific events of the international level in Russia, uniting the theorists and practitioners, the leading international scientists and politicians, the representatives of financial sector and global business elite.

Linar Yakupov – the advisor to the Prime Minister of the Republic of Tatarstan and the president of Islamic Business and Finance development Fund (IBFD Fund) has participated in the Forum as one of the lead experts. He has talked about activities of the Fund and presented the feasibility study summary, which was conducted by the IBFD Fund within Malaysian –Russian consortium, as well as necessary amendments to the legislative framework to launch Islamic Banking and attract Islamic securities, such as sukuk.

For reference

Islamic Business and Finance Development Fund (IBFD Fund) is the center of competence in Islamic Business and Finance of Russia and is working actively towards strengthening economic and financial relations between Russia and the countries in the South East Asia region and the Middle East. The Fund cooperates with international, regional and national organizations, research and educational institutions, market players in the following areas: provision of expertise in Islamic business and finance development projects in Russia and the CIS countries; implementation of Islamic financial institutions policies; organization of the leading economic events of Russia and OIC countries, which are meant to review investment and trade opportunities, as well as Islamic financial market securities – “sukuk”; development of educational programs and conduction of courses meant to increase awareness about Islamic banking, Islamic insurance, Islamic financial markets and financial instruments.

National Rating Agency (NRA) – the agency uniting professional analysts and risk-managers. The mission of the agency is not just its self-development but to facilitate the development of rating services in Russia. The NRA company group include: LLC “National Rating Agency” – the organization that assigns the Independent Solvency Ratings to the banks, mortgage and leasing companies, firms, microfinancial organizations, as well as regions of Russia and guarantee funds; LLC “National Rating Agency – derivative rating” is the organization specialized on assigning the Independent Solvency Ratings to investment and managing companies, quality ratings, as well as other projects. The NRA group is working since 2002 and is one of the leading independent rating agencies of Russia. Currently more than 400 legal entities are the clients of NRA on the assigned scores. Over 1000 companies and banks are involved in other informational projects of NRA, whose materials are regularly published in media. The client list include banks, insurance, leasing and managing companies, nonbank credit organizations and the real economy sector companies.

The Gaidar Forum provides a unique intellectual platform and a meeting point for theorists and practitioners, the world leading scientists and politicians and influential representatives of global financial and business elites. Every year the leaders of economic thought, Nobel Prize laureates, top professors of leading global universities (such as Harvard, Stanford and the Massachusetts Institute of Technology) and representatives of Russian political establishment come to Moscow and gather at the Russian Presidential Academy of National Economy and Public Administration. The Forum hosts all those people who can determine the global world order with their advanced achievements in economic science and influence social and economic development of regions and states. In the Russian media the Gaidar Forum has built a solid reputation of "the Russian Davos Forum", as in terms of the status of its participants and experts it is one of the top world economic conferences. As for foreign guests, this Forum provides them with an important source of information on the key trends in Russia’s social and political development and on the state of its business environment and acts as an investment climate barometer. As for domestic experts, participation in this Forum helps them outline perspectives for Russia’s further economic growth and integration into global economy.

The 2nd International winter school of Islamic law and economics has started in Kazan

Admin3 — Mon, 14 Dec 2015 06:48:09 GMT

The winter school titled “Modern Islamic law and the economics of Russia” is focused on the legal aspects of forming an economic infrastructure as the basis for the further development of the Muslim community.

The faculty of law of the Kazan Federal University jointly with the Institute of International Relations, History and Oriental Studies, Russian Islamic institute and the Volga region Interregional Center for the Continuing Professional Development with the support of Spiritual Board of Muslims of the Republic of Tatarstan (DUM RT) have announced about the admission to the school.

The 2nd International winter school of Islamic law and economy will take place from December 14th to December 20th on several locations concurrently: Kazan Federal University, International coordination center Islamica and the Russian Islamic Institute.

The program and the main academic staff were introduced in the school’s ceremonial opening in the presence of the Dean of the Kazan Federal University’s Faculty of Law Liliya Bakulina, the associate professor of department of the civil and entrepreneurship law Ilsur Salikhov, the president of the Islamic Business and Finance Development (IBFD) Fund Linar Yakupov, the director of the Russian Center of Islamic Economics and Finance Rinat Gabbasov and the management of the DUM RT.

The syllabus is designed considering the unprecedented popularity growth of the Islamic economical-law models in the world, the significant interest of Russian entrepreneurs about ethical Islamic ways of conduction business, the requirement of training experts in the field of modern Islamic law and economy. The course is 34 academic hours long and offers following subjects: introduction to Islamic law; the formation of economic infrastructure of the Muslim community; the legal aspects and the international experience.

The leading Russian and foreign experts in Islamic law and economy from Tatarstan, Malaysia, Kazakhstan and Ukraine will conduct the classes. The attendees can participate in educational programs for specialist training in Islamic law and economics. The workshop on “Sharia economic and legal analysis of Russian companies: methodological and practical aspects.” will be held within the scope of the school for the first time.
The prominent Russian and international researchers, the Islamic businessmen, as well as law enforcement and court representatives were invited to participate in the workshop and the round table. There will be courses for religious scholars as well, aimed to continue their professional development in the field of Islamic law and economics.

Russian financial experts are exploring options to launch Islamic Banking

Admin3 — Wed, 09 Dec 2015 07:58:41 GMT

The discussion of the final version of the document, which is considered as a basis for launching an Islamic Banking project in the Russian Federation, took place in one of the Sbebank’s offices and with the Ministry of Economic Development of the Russian Federation, the Central Bank of Russia, Sberbank, Vneshekonombank, «Regnum» bank, «Zenit» bank, the representatives of the working groups doing a research on the partner banking established by the State Duma and the Council of the Federation, the science community, the Association of the Russian banks, the Association of the regional banks of Russia and the other key participants of the Russian financial market.

The Malaysian-Russia consortium, consisting of the leading Malaysian university Unirazak, the Islamic Business and Finance Institute of Malaysia (IBFIM) and the Russian Islamic Business and Finance Development (IBFD) Fund, has worked on the feasibility study for 9 months. The Republic of Tatarstan is considered as the pilot region for launching Islamic finance services as stipulated in the agreement signed on April 2015 by the consortium and the Government of the Republic of Tatarstan. The complete feasibility study was handed over to the Government on December 7, 2015.

While talking about the handover of the feasibility study to the Prime Minister of the Republic of Tatarstan Ildar Khalikov, Linar Yakupov mentioned that there is a vision in the Republic of Tatarstan on how to work with Islamic finance and that the region can become a pilot project for launching Islamic banking. And the interest of the regional market players in working in the Islamic financial system was supported by the presence of Sberbank, Ak Bars bank, the Ministry of Economy and financial companies representatives.

«The subject is not of a religious one, but rather an addition to the existing financial system to involve the most possible number of market participants in the economic activities», stated Yakupov. «To establish a fully-fledged Islamic bank without the support of the leading financial institutions such as Sberbank, Vnesheconombank, regional Ak Bars Bank, the Association and the Association of the regional banks of Russia would be difficult».

The discussion participants treat the feasibility study as a practical guide for launching of an Islamic banking system in Russia. Therefore, the discussion was mostly about the administration of the Islamic banking system, introduction of the particular products, commercial financing, risk management, taxing, proprietary rights and accounting. Bankers have expressed their interest and are actually considering project financing with the use of Islamic finances. The legislative aspects were also covered: the participants discussed the experience of other countries in making changes to the existing legislative framework.

The Malaysian representatives of the consortium were glad to share their experience, which covers banking systems of many other countries besides Malaysia. According to one of the speakers, the fact that Islamic finance industry is effectively functioning in the rigid financial systems of UK and USA characterizes it the best. Alternatively, the case of Hong Kong, where in 2013 the government has made amends to the tax law (the single tax framework for all market participants) which allowed issuing sukuk. The plan was that other Islamic financial instruments would follow the Islamic securities. The amendments were successful: other Islamic financial products including investment products entered the market.

The consortium had proposed to implement Islamic banking system on the basis of the existing banks, which can be a starting platforms for testing the Islamic financial instruments. It also proposes that the Islamic banking windows should be opened first to get the experience required for the operation of the fully-fledged Islamic bank.

«During the work on the feasibility study we considered both options», said Linar Yakupov. «We also studied the potential demand of these products and which amendments can be made to the tax and banking laws in order to employ Islamic finances. All the recommendations regarding these matters are stated in the feasibility study».

The purpose for conducting the feasibility study is to test the Islamic finance industry mechanisms on the basis of the existing legislative framework and banking system. The proposed project will allow the region and financial institutions within to assess the potential of the ethics based financial system.

The final version of the feasibility study on Islamic banking was presented to the Government of the Republic of Tatarstan

Admin3 — Mon, 07 Dec 2015 08:18:03 GMT

The document, which is considered as a basis for a pilot project on Islamic banking in the Russian Federation, was handed over to the Prime Minister of the Republic of Tatarstan Ildar Khalikov.

The ceremony brought together the President of Unirazak University (Malaysia), the professor Datuk Seri Dr. Mohammed Zabid Haji Abdul Rashid, the president of IBFD Fund Linar Yakupov, the assistant to the President of the Republic of Tatarstan Albert Nafigin, the Chief of the Department for Economy and State Property Renat Gaynutdinov, the Minister of Economy of the Republic of Tatarstan Artem Zdunov, the Minister of Justice of the Republic of Tatarstan and the First Deputy Minister of Finance Marat Faizrakhmanov.

The Deputy Director of the National Bank of the Republic of Tatarstan Sariya Sirazieva, the Chairman of «Spurt Bank» Evgeniya Dautova, the Deputy Director of «Bank Tatarstan» Dmitry Volostnov and the first Deputy Chairman of «Ak Bars» bank Radik Salyahutdinov presented the banking community of the Republic of Tatarstan.

The feasibility study included the key principles of Islamic economy, the Islamic banking and insurance implementation models in various countries, the research on community’s interest in Islamic banking products, as well as application of Islamic finance within the existing legal framework. The project on the feasibility study was completed in 9 months and was financed by the Government of Malaysia.

While welcoming the participants, Ildar Khalikov reminded that the Republic of Tatarstan had been chosen as a pilot region for launching an Islamic bank and for implementing Islamic financial instruments. According to the Prime Minister, Islamic finance is considered as a fundamentally new approach to attract investments into the region.

«We are very delighted to accept this huge gift, this support that you are providing», told the Prime Minister to the consortium. «Tatarstan is considered to be a pilot platform for launching an Islamic financial industry in the Russian Federation. The feasibility study will be the basis of Islamic banking development in the region», added Ildar Khalikov.

According to Professor Datuk Seri Dr. Mohammed Zabid Haji Abdul Rashid, the feasibility study handover must be followed by implementation of Islamiс Finance in Tatarstan and then in other Russian regions.

«Kazan should become a very important European hub for Islamic banking and finance. Tatarstan is an ideal starting point for launching Islamic financial services in Russia. And the market’s expectations only prove that!» - told the president of Unirazak.

The first Deputy Chairman of «AK Bars Bank” Radik Salyahutdinov confirmed his words, saying that the bank is very excited about the presented feasibility study and intending to use the reports of this study as inputs to its work.

In his turn, Dmitry Volostnov from Tatarstan branch of «Sberbank» shared that the working group on Islamic banking was set up and that it is already functioning.

«I am confident, that feasibility study, that was handed over to us, will facilitate the development, and more importantly, the launching of an Islamic banking window in the Republic of Tatarstan», - added Volostnov.

The president of IBFD Fund Linar Yakupov concluded that the tremendous amount of work was conducted in the last 9 months, and that the wishes of the market and participants were also taken into consideration.

«The feasibility study, presented to the Government of Tatarstan, is a tool for developing the mechanisms of the Islamic financial industry in the Russian Federation. We hope that the great deal of work conducted by us will be appreciated and that the practical actions will be taken to implement it», told Yakupov on the ceremony.

The final version of the feasibility study will be also presented in Moscow on the next day. The presentation will take place in one of the Sberbank’s branches within the scope of the round table with the participation of partnership banking working group, set up by the State Duma and the Council of Federation, as well as the Association of Russian banks, the Association of regional Banks of Russia and Russian financial market’s key participants.

For reference
On February 2015, the president of the Republic of Tatarstan Rustam Minnikhanov had a meeting with the Malaysian-Russian consortium, composed of the leading Malaysian university Unirazak, the Malaysian institute of Islamic Banking and Finance (IBFIM) and the Russian Islamic Business and Finance development Fund. As a result of the meeting it was agreed to prepare a feasibility study for opening an Islamic bank or Islamic banking window in the Republic of Tatarstan, as a pilot region for launching of Islamic financing in the Russian Federation.

On April 2015, during the Kazan Sukuk Conference 2015, the Government of the Republic of Tatarstan and the Malaysian-Russian consortium signed an agreement to prepare a feasibility study on opening an Islamic bank or Islamic banking window in the Republic. The special working group, consisting of government, consortium and banking community representatives, was set up within the framework of this agreement for the development of the feasibility study. In accordance with the agreement, the Republic of Tatarstan is considered as a pilot platform for launching Islamic banking in the Russian Federation.

The agreement was signed by the First Deputy Prime Minister of the Republic of Tatarstan Alexei Pesoshin, the president of IBFD Fund Linar Yakupov and the president of Unirazak Dr. Mohammed Zabid Bin Haji Abdul Rashid.

On October 2015, preliminary results of the feasibility study were presented during expert hearings in Moscow and Kazan, which where oriented for three key groups: banks, academic community and the government. In Kazan, the hearings took place from 2nd to 5th of October in the regional office of Sberbank, the Russian Islamic institute and the Ministry of Economy of the Republic of Tatarstan, where the working group session was held.

The hearings in the Central Bank were the last ones, and the representatives of working groups established by the State Duma and the Council of Federation, examining partnership banking have shared their suggestions, comments, opinions and corrections. The Association of Russian Banks, the Association of regional banks and the key market participants had also attended the hearings.

Sergey Gorkov is a member of the Advisory Board of IFN CIS & Russia Forum

Admin3 — Fri, 04 Dec 2015 07:43:53 GMT

Among the other Advisory Board Experts are The State Duma Deputy and the Deputy Chairman of the State Duma Committee for financial markets Dmitry Saveliev, the president of Vneshprombank Vladislav Sitnikov, the executive Vice President of the Association of the Russian banks Elman Mehtiev, the Chairman of Regnum Bank Ayrat Khasanov.

The largest international Islamic Finance forum – IFN CIS & Russia Forum – will take place on 15th of March 2016. For the very first time the event will take place in Russia, among other 22 countries. The event is considered as the platform, where the main vectors of Islamic finance and capital markets development are formed.

The Islamic Business and Finance Development Fund, which is the center of competence in Islamic business and finance of Russia, and the leading international Islamic Finance event organizer REDmoney events, are the organizers of the Forum.

The largest Islamic banks and sovereign funds, as well as state authorities, financial regulators, audit, consulting and law firms from the global key Islamic financial markets will participate in this event.

The informational-analytical publication about the development of Islamic Business and Finance in Russia – Islamic-Finance.Ru, the business-journal BIGRUSSIA (Business Investment Guide to Russia), the website about business in Uzbekistan, the only Russian expert-informational portal about Arab business – ArafNews, the National Banking Journal (NBJ), the business journal “Bankovskoye obozreniye”, international publication Business New Europe, leading financial Russia weekly “Finansovaya gazeta”, Capitol Intelligence Group, PLUS Alliance Group are the media partners of the event.

Russia drafts a bill on Islamic leasing

Admin3 — Fri, 27 Nov 2015 12:53:04 GMT

The Duma Committee Deputy Chairman on Financial Markets Dmitry Savelyev (LDPR faction) is the author of the initiative, reports «Izvestia». The changes are to be made to the law «On Financial Rent (Leasing)».

The main contradiction of the current financial leasing model (long-term lease of the property with a possibility of the ownership)to the Sharia is in a lease consisting of two transactions at the same time – lease and sale. The Islamic finance does not permit to combine two transactions in one.

The bill allows separating the two transactions in time. So in order to do that, it is suggested to amend the current law and add that the transfer of ownership will be covered in the lease agreement, like in the current model, or in the separate purchase and sale agreement, which then will be Shariah compliant.

Dmitry Savelyev commented that the under the current legislationit is not prohibited toconclude two agreements – lease and sale. However, the current law does not recognize these transactions as a leasing therefore the accelerated depreciation (provided by the Tax Code) will not be applicable to such products. Its application allows reducing the leased property and the income taxes.

The drafted bill also provides the possibility, by an agreement of the parties, to avoid penalties for past due payments.

Currently, the Shariah compliant lease agreements are already being concluded in Russia. «Euroasia Leasing Company» and «Amal Financial House» particularly offer such product, but the privileges mentioned above do not extend to them.

Kazakhstan set for debut sovereign sukuk in early 2016

Admin3 — Wed, 25 Nov 2015 12:31:38 GMT

The amendments, which still require the president's signature, would also allow for the conversion of conventional banks into Islamic ones, said Yerlan Baidaulet, an adviser to the Investments and Development Ministry.

«We expect the sovereign sukuk in early spring of next year. Probably in March, it depends on the decision of the Ministry of Finance as it has its own budgetary process», Baidaulet said on the sidelines of an industry conference in Kuwait.

The legal amendments to the banking services and securities laws are the latest steps by the majority Muslim state to help develop Islamic finance. A dedicated Islamic banking law is also currently in preparation, Baidaulet said.

Lawmakers have also passed a law to establish an offshore centre in the capital Astana, which is partly aimed at attracting Islamic finance business, he added.

The government announced plans for a sovereign sukuk, or loan, at the end of last year, which would follow a 240 million Malaysian ringgit ($73 million) sukuk issued in 2012 by the state-owned Development Bank of Kazakhstan.

The National Bank of Kazakhstan plans to sell an inaugural $1 billion sukuk next year as part of a $3 billion programme, a central bank official told the Interfax news agency last week.

The government sold $2.5 billion worth of conventional eurobonds in October of last year.

Kazakhstan, which gets over half its budget revenues from oil sales, has been hit hard by a collapse in world oil prices and the weakening of the currencies of Russia and China, its major trading partners.

Source: Reuters

Islamic Develop Bank calls for new Islamic microfinance structures

Admin3 — Wed, 25 Nov 2015 07:54:53 GMT

Ali says the industry needs to leverage existing technologies and business approaches, such as mobile banking, to start developing microfinance initiatives that would support small and medium enterprises (SMEs). Ali said those actions would help local economies and cement the Islamic finance industry’s place as a leader in the global economy.

Ali’s remarks came at a conference in Kuwait entitled "Islamic Finance: Meeting Global Aspirations." There, Ali told the assembled financial professionals that Islamic microfinance would facilitate the inclusion of more people from various income brackets into the financial industry and provide greater access to financing, grow small local businesses and contribute to financial stability.

There is, however, some risk with lending money to inexperienced business owners. That means that on top of providing Islamic microfinancing, the banking industry needs to help educate and guide SMEs.

«Providing microfinance to individuals lacking entrepreneurial skills may lead to less than the desired outcomes», Ali said. «What is needed is an integrated finance-plus approach, i.e. the provision of financial services along with provision of related technical skills, regulatory support, assistance for product development and marketing, and increasing market access to SMEs' products».

Source: Gulf News Journal

Russian financiers focus on ethical finance

Admin3 — Tue, 24 Nov 2015 11:16:31 GMT

The financiers of the largest Russian companies such as Vnesheconombank, Rosselkhozbank, Rosevrobank, SIBUR holding, the RUSSIAN INVESTMENT SOCIETY, VTB Capital Investment Management, Svyaztransneft, Inteco, Promsvyazkapital, Far East energy Management Company, INTERAVIAGAZ and others have confirmed their participation in the conventional meeting.

The key topic of the seminar – «Crisis – it is time to make an important decisions. TODAY IS TOO EARLY, TOMORROW WILL BE TOO LATE». The discussions will also touch on the issues of economic situation and risks assessment, forecasts, collaboration with banks, financing import from the West Europe with the assistance of the export and credit agency. The first Vice-President of the Russian finance directors’ club Tamara Kasyanova, who is in the top 100 of the Russian economy and finance experts, will hold the seminar.

Linar Yakupov – the president of Islamic Business and Finance Development Fund and the leading expert, who is in the top500 global rating of Islamic finance specialists, will speak on Islamic financial model, ethical finance and interaction with the leading capital markets.

The key Russian financial and State structures such as Bank of Russia, VTB group and Sberbank, the Council of the Federation, the State Duma, the Association of Regional Banks of Russia and the financial market players are all interested in developing the Islamic finance industry in the Russian Federation.

National Bank of Kazakhstan signed a memo of cooperation with British financial structures

Admin3 — Mon, 23 Nov 2015 14:05:34 GMT

The memorandum has been signed in the presence of the President of the Republic of Kazakhstan Nursultan Nazarbayev and the Prime minister of Great Britain David Cameron during the second meeting of the Kazakhstan-British intergovernmental commission on trade and economic, scientific and technical as well as cultural cooperation.

The cooperation with such authoritative financial structures will take place within the International Financial Centre Astana. One of the priority issues discussed during the ceremony was the promotion of the IFC Astana among financial and business circles of Great Britain as a financial hub, as foreign investment attracting center for the entire Central Asian region: assistance in development and exchange of experience, knowledge in the field of Islamic banking, capital markets, financial services regulation, arbitration, court systems based on common law.

A formation of the working groups is among the short-term plans of the parties.

For reference

TheCityUK is the UK-based financial and related professional services industry. Its activity is related to successful and long-term experience of financial center London City.

The EBRD was founded in 1991 right after the Cold War ended in order to build a new era in Central and East Europe. It is the international financial institution established to support the projects of different countries including Kazakhstan in financial sector, SMEs, infrastructure development.

Linar Yakupov is on the list of the most influential figures in Islamic finance

Admin3 — Mon, 23 Nov 2015 13:50:51 GMT

In ISLAMICA 500, data on leading experts in area of Islamic economy and the "halal" industry from around the world are published. The peculiar guide contains curriculum vitae about each of experts, whose efforts and achievements formed the basis of development of the Islamic economy on a global scale.

The encyclopedia contains information on pioneers of the Islamic finance world, Muslims and non-Muslims, men and women who represents a range economy sectors: finance, science, business, politics, the international relations, the law, mass media and the capital markets – all the areas that exert influence on Islamic economy.

The president of Islamic Business and Finance Development Fund (IBFD Fund) Linar Yakupov became one of the first Russian experts who joined such a significant Islamic finance project. Linar Yakupov has graduated from the faculty of economy and management of the International Islamic university of Malaysia. He is the founder of the annual International economic summit of Russia and the countries of OIC (KazanSummit) which is carried out in the Russian Federation since 2009. Since 2010, he is the head of the Islamic Business and Finance Development Fund, the center of competence in Islamic business and finance of Russia.

Linar Yakupov has been working effectively to promote Islamic Finance in Russia since 2001. In 2013, he has been awarded the prestigious Global Islamic Finance Awards (GIFA) in «Islamic Finance Advocacy Award 2013» category for his effectiveness in promoting Islamic banking and finance in Russian Federation. Linar Yakupov is an expert in global finance and investments promotion on both Russian and international level, and is doing a substantive work to attract direct foreign investments and to develop Islamic Finance in Russia and CIS countries. He is a frequent participant and speaker at large-scale events on Russian and international level.

For reference

ISLAMICA 500 is fully independent source of information, which cooperates with such media giant as Forbes and publishes the views of chairmen, experts and businessmen worldwide who take active part in development of Islamic economy and the “halal" industry.

Path Solutions and IBFD sign strategic MoU

Admin3 — Fri, 20 Nov 2015 13:26:11 GMT

Path Solutions’ iMAL is a packaged Sharia-compliant core banking suite that provides Islamic financial institutions with unparalleled richness in functionality on an integrated, SOA architecture with support from front-to-back office. iMAL includes pre-configured, industry best practices, enabling Islamic financial institutions to optimize their operations and processes while remaining agile, scalable and responsive to business change. Its highly automated implementation approach guarantees rapid deployment to accelerate their return on investment.

Rohana Abdul Munim, Sales Director and Head of Islamic Finance Strategic Initiatives at Path Solutions commented: «The MoU covers an array of cooperation areas in the field of Islamic financial technologies, and opens a window of opportunities by offering Path Solutions increased exposure in Russia and CIS countries while fueling our ambitions for business growth».

IBFD is an organization that provides assistance in the development of economic and business bilateral relations between Russia and the Organization of Islamic Cooperation 57 member states. The principal activity of IBFD is to assist in the advancement of Islamic financial services in the Russian banking, capital and insurance markets by providing business solutions and educational programs and trainings on Islamic finance.

«This MoU with Path Solutions recognizes the important role of Sharia-compliant next-generation technologies to meet heightened demand in Russia and CIS countries for Islamic banking products”, said Linar Yakupov, CEO and President of IBFD. «We will help address the region’s Islamic finance challenges through this partnership which will be soon evidenced by a new formal agreement to be signed by our both organizations, for we are committed to developing and promoting the industry for the benefit of an underserved population».

The Islamic Development Bank and the National Bank of Kyrgyzstan are planning to launch a joint Islamic bank in the republic

Admin3 — Fri, 20 Nov 2015 08:46:00 GMT

Additionally, they had talked about the other relevant things such as the perspectives of Kyrgyz Republic economy development, the establishment of a joint Shariyah compliant commercial bank and the possibility of opening an IDB representative office in Kyrgyzstan.

The discussion took place during the International Financial conference “Islamic Finance: Meeting Global Aspirations” in Kuwait, on November 11, 2015.

Tolkunbek Abdygulov also had a meeting with Christine Lagarde, the Managing director of the International Monetary Fund, in which they discussed further course of cooperation between Kyrgyzstan and the IMF and drew a plan on joint actions during the financial crisis. Ms Lagarde also noted the concerted actions of Kyrgyztan’s National Bank and the government on monetary and fiscal policies.

The 11th World Islamic economic forum was held in Malaysia

Admin3 — Wed, 11 Nov 2015 12:52:03 GMT

The Prime Minister of Malaysia Najib Tun Abdul Razak, the Chairman of Bosnia and Herzegovina, the Vice-President of Azerbaijan Yakub Eyubov, the President of Islamic Development Bank (IDB) Dr. Ahmad Mohamed Ali Al-Madani and the number of market’s key player were among many honored guests that attended the event. The president of Islamic Business and Finance Development Fund Linar Yakupov represented Russia in the Forum.

The participants of this large-scale global event focused on the issues of supporting the SME’s - the foundation of the Muslim world economies, under the conditions of the current world economic recession, and on the development of measures and decisions to form an enabling environment for entrepreneurship development.

Topics such as the women’s part in economy, the “halal” industry, education, finance, Muslim fashion, art, technology and innovations were also discussed in the Forum. The topic of “green” entrepreneurship, where the financial component is connected with an eco-friendly business, was also an important subject in discussions.

It was noted on the Forum that Malaysia, which is rightfully recognized as one of the leading countries in advancement of the Islamic financial system, is planning to be involved in a wider range of activities: from Islamic Finance introduction to a various sectors to business conduction, consulting organizations, which operate in this area, and investments. Malaysia intends to provide a wide range of services per se, considering how actively Islamic finance is developing, and how qualitative and demanded it is.

The mentoring institute was founded for the women, whose part in the economy is indisputably recognized today, which assists them to take up the key positions and to build their businesses independently.

Linar Yakupov, who represented the Russian site, spoke about the work of IBFD Fund and feasibility study for launching an Islamic bank or Islamic banking window in Russia, on which IBFD Fund has been working within Malaysian-Russian Consortium. The final version of the feasibility study will be presented on IFN CIS&Russia Forum in March 2016, which for the very first time will be held in Russia.

The World Islamic Economic Forum has yet again proved itself as a business event; as a platform, whose main tagline is «Building bridges through business».

The Ministry of Finance of the Russian Federation has confirmed its participation in IFN CIS & Russia Forum

Admin3 — Wed, 11 Nov 2015 07:46:40 GMT

The representatives of the largest banks and sovereign wealth funds, public authorities, financial regulators, audit, consulting and law firms from the key Islamic finance markets from all around the world, as well as from Russia and CIS countries will take part in the Forum.

The Ministry of Finance of the Russian Federation has already confirmed its participation in the Forum. The Deputy Director of the Financial Policies Department Sergey Platonov and the Head of Banking in the Financial Policies Department Ekaterina Trubnikova will represent the Ministry.

The event will take place on March 15, 2016 in Moscow.

For more information about the Forum, the speakers and attendees please refer to the Forum’s official website – www.ifncisrussiforum.com.

Path Solutions and IBFD sign strategic MoU

Admin3 — Thu, 05 Nov 2015 13:26:23 GMT

The interreligious commission on partner finance was formed in Russia

Admin3 — Thu, 05 Nov 2015 11:21:19 GMT

The purpose of setting up the commission is to form a representative body that embodies a broad request for forming the financial principles and institutes in Russia, which are founded on traditional values of the main religions.

Within the framework of traditional finance promotion, the commission will actively interact with the legislative authorities, the core ministries and the Bank of Russia.

Oman had issued first sovereign sukuk

Admin3 — Thu, 05 Nov 2015 07:39:27 GMT

Oman's first issue of sovereign Islamic bonds has piqued a strong interest from potential investors.

The 200 million rial ($520 million), five-year sukuk issue with an ijara format drew 22 orders totaling 336 million rials during the subscription period showing demand higher than supply. Bank Muscat and Standard Chartered were the issuers.

The second sukuk issue in sultanate is planned on 2016.

The first issue is a big step towards developing Oman's Islamic finance industry and gives the government new opportunities to raise money. The issue will give the country's Islamic banks, insurance firms and funds an aiding tool to manage their money more efficiently.

Oman launched Islamic finance, which follows religious rules such as a ban on interest payments, later than other Gulf Arab countries, granting licenses to two sharia-compliant banks, Al Izz Islamic and Bank Nizwa, in 2013. Today, Islamic bank and Islamic banking windows has a 5% share of total banking assets.

Gulf Islamic banks’ cumulative profits exceeded $12 billion

Admin3 — Thu, 05 Nov 2015 07:25:00 GMT

The Ernst & Young presented the analytical study entitled as «World Islamic Banking Competitiveness Report 2015-16» in a conference in Bahrain’s capital Manama.

The key findings can be crucial for the future of the Islamic banks. Technological innovations and digital transformation will play an important role in building relationships with customers by assisting banks to meet the customer requirements.

According to the report, nine major markets are currently engines of growth for the global Islamic financial industry. Forty systemically important banks from these markets are presented in the report. The capitalization of more than 50% of these financial institutions exceeds 1 billion US dollars.

The Gulf Islamic banking sector growth, particularly in Saudi Arabia can be related to the increased budget expenditures from the oil income. It is revealed at the same time, that governments intend to withdraw resources from the banking sector in order to reduce the budget deficit caused by the fall of the global oil prices.

It is also stated in the report that the Islamic banking sector in the UAE gained momentum due to the growing development and innovation achieved in the digital world. This is what puts it on par with Malaysia in terms of global market share.

The full version of the report is planned to be presented on December 2015.

Vnesheconombank is consulting with Bahraini banks on Islamic finance employment

Admin3 — Thu, 22 Oct 2015 12:47:35 GMT

The mechanism of the Islamic financial system was the key topic of a joint meeting of the Russian and Bahraini business councils, which took place on October 21, 2015 in Sochi.

The event was dated for the 25th anniversary of diplomatic relationsbetween the governments.More than 30 top-managers, bank and companies’ representatives, including high-tech Russian and Bahraini industries, had attended the event.

-The Russian Federation considers Bahrain as an important partner in the Middle East and as an influential member of the Gulf Cooperation Council (GCC), - said the Head of Vnesheconombank Vladimir Dmitriev in his welcoming speech. The connections of businessmen has deepened and delegation exchange has also become more frequent. It had allowed to business communities of two countries to identify real requirements and resources of each other.

It was noted in the meeting that VEB is currently exploring channels to collaborate with Bahraini financial institutes and funds in the area of project and debt finance; and is consulting with Bahraini banks to employ Islamic finance principles in the bank.

Vnesheconombank has first expressed its interest in ethical financial instrument on December 2014, when Vladimir Dmitriev has visited the Kingdom of Bahrain with the Russian delegation. The Head of VEB told that in order to enter the Shariyah compliant financial market, the bank will first study the principles of Islamic financing in the GCC countries. At the time, he also shared the plans of sending a team of Vnesheconombank specialists to the region to research on ethical financial instruments.

For reference

There are 30 organizations and companies in the Russia-Bahrain Business Council from the following areas: IT, innovations, energy sector, shipbuilding, construction, logistics, food and medical industry, agriculture,small and medium sized enterprises (SMEs), petrochemistry, and finance. The Russian companies had presented their commercial offers during the meeting.

VEB leads the Russia-Bahrain Business Council (RBBC) since 2007. During its existence the structure has qualitatively changed, some largest companies and financial institutions entered the council. VEB’s main objectives are to support Russian industrial export, to aid the Russian companies in a joint project implementation as well as to attract investments to the Russian economy. The Russian and Bahraini financial development institutes signed the first agreement on December 2008, the purpose of which was to boost the turnover between the two countries with the involvement of SMEs.

Bahrain suggests to Russia to open an Islamic bank

Admin3 — Tue, 20 Oct 2015 13:23:09 GMT

“In order to develop our banking cooperation, it is necessary to establish an Islamic bank, jointly Russian with some other Arab countries or Bahrain, this is becoming a very relevant task nowadays,” Saati told Rossiya-24 television channel in an interview.

«As for investment, our state, refers to State investment holding Bahrain, participates with a share of 20% in one of the major investment projects in the Russian Federation,» said al-Saati.

«As for Bahrain, we call on, of course, and Russians to work in the Kingdom of Bahrain, because we have the most favorable climate for foreign investment: no taxes for foreign investments and foreign partners have the right to own property right at all without the participation of the so-called local agent,» he continued.

I think that Russian business, if you come to Bahrain, Bahrain could serve as a very good starting base for the entry of Russian business in neighboring countries — the Arab Gulf States», — concluded the Ambassador of Bahrain to the Russian Federation.

IBFD Fund has received the international Global Banking & Finance Review award

Admin3 — Mon, 19 Oct 2015 13:28:10 GMT

The official website of British financial internet portal – “Global Banking & Finance Review”, has published all nominees distinguished with the award. The portal is among the most visited specialized websites, and is visited by the president of banks and other financial institutions; by Central Banks and by individuals from over 200 countries worldwide. The portal has over 9 million unique visitors annually.

The purpose of the annual review conducted by the internet portal since 2011 is to form an objective opinion on the banking and finance news and events. The award highlights the highest achievements and advances in the financial world and marks the high-level financial organizations of different levels worldwide, which demonstrate special achievements, innovative solutions, strategies, progressive and prospective changes in their industry. The winners are determined based on unbiased and objective evaluation.

“It is gratifying to know that the work done by IBFD Fund is commended on the global financial markets and marked in the annual global rating of Global Banking & Finance Review, one of the leading international information analytical agency”, commented Linar Yakupov, the president of IBFD Fund. “We are glad to be acknowledged as the best Islamic finance advisory in Russia.

Islamic Business and Finance Development Fund is the center of competence in Islamic business and finance of Russia. It was founded on February 2, 2010. The decision to found the noncommercial organization was made in 2009 upon success of the first International economic summit of Russia and OIC countries (KazanSummit) to assist the development of economic and business relations between Russia and the OIC country-members by employing the mechanisms of Islamic business system. The goals of IBFD Fund are the following: to support the strategic projects in forming Islamic economic model, the development and the improvement of Islamic business and finance, as well as the Islamic business and financial infrastructure in Russian Federation and CIS countries.

International economic summit of Russia and OIC countries (KazanSummit) is the highest profile event organized from 2011 to 2015 by IBFD Fund. In 2011 and 2015, IBFD Fund organized KazanSukuk Conference – the main platform for entering the Islamic finance markets and the workshop for discussing Islamic sukuk securities market matters.

IBFD Fund works closely with international, regional and national organizations, educational and research institutes, as well as the market participants. The Fund had signed a number of cooperation agreements with the leading international financial companies on various Islamic finance development and promotion projects. IBFD Fund is the exclusive representative of Shariyah Review Bureau (SRB) in Russian Federation, which is one of the key players in Shariyah law, with the exclusive right to promote Shariyah expertise services to Russian and International companies, as well as to individuals within and outside Russia. The agreement between SRB and IBFD Fund was signed on August 2015.

IBFD Fund, within the Malaysian-Russian consortium, is currently preparing a feasibility study on launching an Islamic bank or banking window in Russia. The feasibility study results will be presented on December 9, 2015 in the major international Islamic finance event – IFN CIS & Russia Forum, which is organized by IBFD Fund and the leading international events organizer in the field of Islamic Finance, REDmoney Events. The representatives of the largest banks and sovereign wealth funds, public authorities, financial regulators, audit, consulting and law firms from the key Islamic finance markets from all around the world, as well as from Russia and CIS countries will take part in the Forum. The IFN CIS & Russia Forum is annually held in 22 different countries and is considered a platform, where the primary vectors of Islamic finance development and money markets are formed.

Expert discussions on Islamic banking windows were held in Moscow

Admin3 — Sat, 10 Oct 2015 12:03:46 GMT

During last six months the Government of the Republic of Tatarstan and Malaysian-Russian consortium comprising UNIRAZAK, IBFIM and IBFD Fund has been working up on the possibility of preparing the Feasibility study on launching Islamic bank or Islamic banking window on the territory of the Republic of Tatarstan as a pilot region for the introduction of Islamic banking and finance in Russian Federation.

Consortium members believe that the Republic of Tatarstan may become a plot region for Islamic banking introduction in Russia and serve as a background for necessary amendments in current banking legislation.

The Feasibility study includes main principles and philosophies of Islamic finance, strategies and approaches of Islamic banking and takaful implementation, market study on the potential Islamic finance consumers, considerations and prerequisite of successful implementation.

Tatarstan, i.e. its capital city Kazan – has first accommodated expert discussions of the Feasibility study among bankers, academicians and regulators of the region. Discussions were held from 2 to 5 October in the regional office of Sberbank, Russian Islamic Institute and the Ministry of economy of the Republic of Tatarstan.

Expert discussions held on 7th of October in the Central Bank of Russia have given the final comments and amendments from the working groups within the Central bank and Federation Council, Associations of Russian banks and regional banks, key financial market players of Russia.

Dato Dzulkfle Bin Mahmud, CEO of Matrade, Linar Yakupov, the President of IBFD Fund, Professor Barjoyai Bardai, Director of the feasibility study project, Dato Ahmad Tajudin, senior director of Sri-Lanka bank, previously Managing director of Bank Islam Malaysia Berhad, Dato Wan Ismail Wan Yusoh, advisor to the managing director of Bank Islam Malaysia Berhad, Wan Zamri Wan Ismail, CEO of Asean Retakaful International Ltd., Wan Abdul Rahim Kamil, consultant to the Securities Commission of Malaysia, were among the main participants of discussions.

Linar Yakupov, one the representatives of the Malaysia-Russian consortium: “Today it’s clearly what we are going to get in the final feasibility study, that is why we ask you to get actively involved in the discussions and give your assessment to the work, so that the feasibility study would become a serious platform for the development of Islamic finance industry in Russia”.

Dato Dzulkfle has also given a very constructive comment and asked participants to keep in mind four key aspects of Islamic banking and finance: the first – Islamic banking is a system that promotes the economy growth and well-being of its citizens. Islamic banking system may exist side by side with traditional banking system. Besides, Islamic economy is more clear and predictable, based on principles of fair relations, trade promotion and social protection.

Malaysian consortium has presented a deep analyses of how Islamic finance may work in Russia, including detailed road map in financial instruments introduction.

Comments of the participants were very useful and substantial and covered issues related to taxation, regulation, experience and global practices, amendments to current legislation, awareness of the population, pilot project launching. Participants have concluded that the market is ready for changes and is interested in new effective financial instruments.

The final feasibility study is planned to be presented during IFN CIS & Russia Forum on 9th of December, 2015 in Moscow, organized by REDmoney Events in collaboration with IBFD Fund. The event has a full support of russian state authorities, as well as supported traditionally by global Islamic financial market players, including ICD as a multilateral strategic partner.

Dubai Silicon Oasis Authority and Thomson Reuters Reveal Key Findings of Digital Islamic Economy Report 2015

Admin3 — Mon, 14 Sep 2015 12:32:59 GMT

Launched at a press briefing hosted at the Dubai Technology Entrepreneurship Centre (DTEC), DSOA 's wholly-owned entrepreneurship centre and the largest of its kind in the region, the report serves as a precursor to the second edition of the Global Islamic Economy Summit (GIES) that will be held under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, from October 5-6 at Madinat Jumeirah, Dubai, UAE.

Among its key findings, the report estimates that the overall value contributed by Muslim consumers worldwide to the global digital economy in 2014 stood at US$107 billion, representing 5.8% of the total global digital economy. Moreover, the growth in total value of Muslim consumers' contribution to the global digital economy (at a CAGR of 17% by 2020) is expected to outweigh the growth of the total global digital economy (at a CAGR of 15% by 2020).

The report focuses on a new and a more specialized area of Digital Islamic Consumer Services. Currently, more than 2,000 Islamic lifestyle services are being provided across websites and mobile platforms worldwide. The most popular categories include 'News and Insights' (used by 21% of users), followed by 'Retail Sales' and 'Media and Entertainment'. Five segments within Digital Islamic Consumer Services have emerged as the most promising Islamic segments, namely Sharing Economy; Social Commerce; Retail e-Commerce; Food Transportation and Logistics, and Islamic Finance Investment Products.

E-commerce within the modest fashion sector has been identified as the most successful Islamic business model. Modanisa and SefaMerve, the top fashion online retailers, are among the top five leading Islamic consumer websites. The others include Muslima.com, Qiran.com and IslamicOnlineUniversity.com.

Interestingly, the findings indicate that social media services customized for Muslims have proven less successful as business models, especially services pertaining to 'News & Insights', which typically rely on revenue support from online advertising. In terms of popularity and usage, the Islamic web and mobile application 'Muslim Pro' ranks highest in terms of downloads. Productivity and education apps, as well as apps for Halal food ratings and modest fashion also feature prominently on the Digital Islamic Consumer Services leader board.

Commenting on the significance of the report, Dr Mohammed Alzarooni, Vice Chairman and CEO, Dubai Silicon Oasis Authority , said: «As a leading government entity and key player in the technology industry, the contribution of Dubai Silicon Oasis Authority to this emerging Islamic economy sector will further position Dubai as a hub for the development of electronic information, programs, applications, projects, as well as a platform for e-commerce and Islamic media. Our mandate to support 'Islamic digital' and 'Arabic content' initiatives is already making considerable headway, given DSOA 's commitment to supporting start-ups engaged in these domains through DTEC. We are confident this report will benefit individuals and businesses targeting the Islamic economy industry by providing data and insights that can serve as a guideline for them to make more informed decisions».

Nadim Najjar, Managing Director of Thomson Reuters , Middle East and North Africa, said: «The report further reaffirms that Islamic digital economy has indeed become an integral part of everyday life, and indicates significant opportunity for growth in terms of business and innovation. We are confident the insights presented by the report will help entrepreneurs and established businesses better navigate this space».

Abdulla Mohammed Al Awar, CEO of Dubai Islamic Economy Development Centre, said: «The promise and potential of the Islamic digital economy at the global level is well captured in the report, which offers viable solutions well beyond the typical sectors of banking and finance. We look forward to building our initiatives from this solid research for an enriched business environment to strengthen Dubai's positioning as the capital of the global Islamic economy».

The 2015 Global Islamic Economy Summit (GIES), organized by the Dubai Chamber, the Dubai Islamic Economy Development Centre, and Thomson Reuters, is set to gather over 2,000 policymakers, thinkers and business leaders seeking to build a roadmap capitalizing on the opportunities within the growing global Islamic economy.

About Thomson Reuters

Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organization. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com.

About DSOA

Dubai Silicon Oasis Authority ( DSOA ), a 100% owned entity by the Government of Dubai is a free zone, strategically placed on Sheikh Mohammed Bin Zayed road. DSOA 's urban master-planned community spans 7.2 square kilometers of state of the art office towers, R&D and industrial zones, educational institutions, luxury apartments, villas, hotels, healthcare and a full range of lifestyle facilities which translate into a dynamic commercial and social environment. Businesses can flourish under the unrivalled package of incentives, including 100% ownership, and high end IT infrastructure that allows companies to begin operating immediately. DSOA is a technology park that provides both a living and working integrated community.www.dsoa.ae.

Source: Zawya

IBFD Fund jointly with REDmoney Events organize and host the biggest international Islamic finance event in Russia and CIS

Admin3 — Mon, 14 Sep 2015 09:02:05 GMT

In the last 5 years CIS markets have started an active integration process towards the formation of the Eurasian Economic Union. The treaty on the EEU came into effect on 1 January 2015 and aims to create a powerful, attractive center of economic development. Islamic finance may become one of the strongest driving forces toward effective development of a big regional market that unites more than 170 million people.

Kazakhstan, Kyrgystan and Azerbaijan have developed Islamic banking since 2005 resulting in the creation of number of Islamic financial institutions. On its part, Tajikistan has recently started preparing a draft law on Islamic banking and finance.

Russia as the largest country in CIS is also involved in Islamic finance development process. Among the most important initiatives are KazanSummit held annually since 2009, the foundation of Tatarstan International Investment Company and Eurasian leasing company operating on Shariah principles, first in CIS Murabaha syndicated financing transactions by AK BARS Bank in 2011 and 2014, first takaful product launched by Allianz Life Insurance company in 2015. Latest initiatives are shown also by the largest Russian banks – Vnesheconombank and Sberbank.

The current geopolitical situation provides a further catalyst for Russia to develop its Islamic banking and finance capabilities. The increased interest has now reached high level regulators as evidenced by the recent meeting between Elvira Nabiullina, governor of the Central Bank of Russia and Dr Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank.

REDmoney Events, widely recognized as a leader in the organization of Islamic finance forums globally is pleased to partner with the IBFD Fund to organize the IFN CIS & Russia Forum 2015, with the full support of federal and regional government entities.

Linar Yakupov, President of IBFD Fund: «Islamic banking stands a good chance in Russia, since Islamic business is slowly but surely developing here. Large number of initiatives and events are organized in different parts of Russia to move further toward ethical financing instruments, alternative funds and effective and stable economy. Now the CIS market is mature enough to host the biggest international Islamic finance event and join 22 regions in IFN events geography».

Russian based IBFD Fund signs strategic partnership with Shariyah Review Bureau to promote Islamic finance transactions

Admin3 — Mon, 10 Aug 2015 09:36:29 GMT

Under the agreement, IBFD Fund’s partnership will leverage SRB’s extensive Shari’a consultation footprint and scholarly network to promote, upgrade and administer Russian financial establishments to set up Sharia compliant funds and transactions.

Commenting on the signing, Linar Yakupov CEO at IBFD Fund said: «Our partnership with SRB is a professional arrangement that supports our active commitment to collaborate with specialized bodies from around the world and nurture the growth of Islamic finance across the Russian financial industry. The strategic partnership with SRB is a long term strategy to help promote Islamic financial products in Russia by supporting local business through consultation and fund structuring. Our selection of SRB was made due to their global track-record in Sharia Advisory Market. Under the agreement, SRB will offer consultation to Russian banks and asset managers seeking to set-up Sharia compliant funds through IBFD Агтв. This partnership will be particularly beneficial to Russian establishments with international requirements».

Alongside the Sharia Advisory activities, the engagement will see SRB focus on developing and building its scholarly capabilities in the Russian language while IBFD Fund will add promotional service locations to its existing network as well as increasing their overall capabilities. The partnership will also strengthen credibility between CIS and GCC countries in the domain of Islamic finance.

Yasser S. Dahlawi, CEO, at SRB said: «We are witnessing tremendous growth in Islamic financial products between GCC and Asia with Europe picking up momentum over the last few years; and we certainly see a lot of growth potential in CIS hubs such as Kazakhstan, Azerbaijan, Uzbekistan financial hubs. We also expect Russia’s own economic development to benefit from the growth of Islamic finance infrastructural links». Commenting on the new arrangement, he added, «By partnering with IBFD Fund, we hope to provide Russian institutions expanded Shari’a product structuring services in the region. The partnership will not only accelerate our pace towards achieving Sharia Advisory goal in the region but will also help us serve multinational corporations with international needs in these markets».

«I am very pleased to have reached this strategic partnership with a company like IBFD Fund because the result will be very beneficial for both parties», said Mansoor M. Ahmed, Assistant General Manager, at SRB’s headquarter. «We expect SRB to enjoy greater visibility in Russian financial sector via the broadcasting platform of IBFD Fund while they will benefit from our Sharia Advisory and consultation service that spans well over a decade and covers US, Europe and the GCC». He added «We are extremely proud to be working with them and we look forward to building a long, mutually beneficial and prosperous business partnership».

President of the Islamic Development Bank was awarded the title of Honorary Professor of the Russian Islamic University

Admin3 — Wed, 24 Jun 2015 07:47:32 GMT

The rector of the Russian Islamic Institute (RII) Raffick Mukhametshin awarded the degree of honorary professor, a gown and a diploma to the President of the main financial organization of the Islamic world. The ceremony of awarding the honorary degree of professor symbolizes the special attitude of the Islamic Development Bank (IDB) to the Russian Islamic University, as to the main university of the Russian Federation, which trains specialists in the field of Islamic law, Islamic theology, and Islamic economics. RII teachers are regularly trained in the IDB and its structures.

Ahmad Mohamed Ali Al Madani arrived to Kazan to participate in the VII International Economic Summit Of Russia and OIC countries and became a guest of Honor of the annual KazanSummit. Head of the Islamic Bank delivered a speech at the Strategic Forum of the summit, met the President of the Republic of Tatarstan Rustam Minnikhanov and took part in the Business breakfast of KazanSummit 2015.

The delegation of the Islamic Development Bank headed by Mr. Al Madani, which came to the VII International economic summit of Russia and the OIC, included about 50 representatives of institutions that are part of the IDB. Particularly, Director Investment Department of IDB Mohamed Hedi Mejai, Advisor to the CEO in ICIEC Hussein Khalif Jama, executive director of THIQAH Ghassan Al-Baba, senior economist of the IDB Muhammed Zulkhibri and others.

The Islamic Development Bank has been an international partner of the annual KazanSummit. The Islamic Development Bank Group Business Forum (THIQAH), established by IDB, also has been supporting the event on the international level.

Elvira Nabiullina met the President of the Islamic Development bank in the Central Bank of Russia

Admin3 — Sat, 20 Jun 2015 08:05:47 GMT

Ahmed Mohammed Ali Al-Madani came for the visit with the head of Russian Central bank Elvira Nabiullina, being accompanied by the President of the Republic of Tatarstan Rustam Minnikhanov.

Elvira Nabiullina expressed special gratitude to Rustam Minnikhanov for having brought to the Central Bank such an important person as the president of the IDB, the press office of the President of the Republic of Tatarstan reports. Today, Russia is very interested in the principles of the work of Islamic banking, admitted Elvira Nabiullina, and one of the tasks – to understand how these principles can be adapted to the Russian financial system.

During the meeting, Ahmed Mohammed Ali Al-Madani told about the history of the IDB and the principles of its operation. He noted that today Islamic banking is represented even in countries, where there is no Islam, for instance, in China. According to the President of the IDB, Islamic banking appeared to be more resistant to crises that resulted in fewer losses during the economic crisis compared to other banking systems.

Maxim Tafintsev: ‘Muslims to bring from shadow mega funds’

Admin3 — Fri, 12 Jun 2015 12:03:06 GMT

This year, special working groups of the Council of Federation, technically, at the Central bank, finally got down to serious discussions of this matter. Was set up a special technical team, which is working out particular elements that must be introduced into the Russian legislation, rather than simply discusses ‘what is necessary or unnecessary’.

You mean that certain interested parties at last have found access to the Council of Federation and the Central bank?

- Actually, there are quite many Muslims in the Council of Federation and these people are not the last businesspersons in Russia and represent largest regions of the county. However, there is more to it than that. For the past five years a certain practice has formed in the framework of the existing legislation, the practice, which allows using and employing certain products. Installment selling and leasing are allowed now, insurance products began to work as well. Specifically we need to modify our banking laws to conduct credit and deposit policies. Particular changes in the tax legislation are required to help Islamic financial products be less costly.

What is the double taxation in this context?

- A Russian bank issues you an interest loan so you can buy something, while in the instance of Islamic banks, they first buy some property to resell it to you in installments. The value added tax doubles: first on purchase and later on selling. These transactions should be allowed to be treated as financial operations and not as a trade business, to put them in the same position as commercial banks. They should be taxed only on the way out - just on the last transaction when a bank sells some property item to a borrower.

They do this to avoid such thing as ‘riba’: you don’t give money at interest, but engages in a real transaction. Because the basis of the Islamic money – is the subject of the transaction. There must be something that one have purchased and resold. How would you structure the transaction further is the secondary issue. Just the same, the state gets its tax, although not two-fold, but it gets it. Virtually, according to documents, a bank holds property for a hot a minute insomuch as it takes part in a transaction and it would be unreasonable if it were taxed to the full in such case.

What about microfinance organizations that issue payday loans to migrant workers in construction – are they Islamic banks?

- Indeed no, such are not Islamic banks at all; interest rates there are 200-300%. This is a grey market. And we are advocating for dissolution of grey markets, so that 20 million Muslims residing in Russia could be involved in legal financial market and be in agreement with their religious creed. As of today, they have to make their financial business under the counter.

Here we are already dealing with a partnership, murabaha. When there is a financial partner, a community, and that, who invests his labor. In this context, we can speak about the Islamic banking as an old practice, which simply has not been formatted in such a manner that the state may regulate it. The problem is to make money of Muslim population transparent, understandable and visible. So that the finances operate within our economy properly and are not salted away or used in shady transactions.

Offering the Muslim community an opportunity of its financial structures’ unimpaired operation, we open an effective way for foreign investors. Many of them say, ‘we are ready to come but cannot due to the lack of necessary regulations’. They don’t wish to come here and change laws for us. This is our task, and if we accomplish it, then they will come.

Am I right supposing that when money of the West became inaccessible to us, a necessity arose to get it elsewhere? And at this point, premises of the Islamic banking have ripened just in time.

- This problem has long been addressed. We have been doing Kazan-based ‘Russia—OIC’ summit for several years now. The OIC member countries include 50 states of the Muslim world. Fundamentally, this represents Southeast Asia, Middle East, Northern Africa and Central Asia - the countries, on which we have re-focused today as we say that we have turned to the East. Apart from China and Korea, there are also these countries. Besides traditional financial instruments, working with these countries requires also instruments, which they are increasingly transferring to in their economies. They are accumulating mega funds today, trillions of dollars.

We want Russia, the same as London or Hong Kong, or Luxembourg, to become fully engaged in these processes and to attract finances. London, although not a Muslin country, is representing an Islamic financial center with banks and investment funds. What have they done? They have simply completed their legislation with regulations that incorporate Islamic banking principles.

To put in other words, they have excluded the double taxation?

- Yes, they have. Beyond that, our banking legislation, for instance, reads that interest must be accrued at both lending and attracting funds. This has been directly prescribed. You cannot set fixed income in Islamic banks. Investing money in separate accounts with an Islamic bank or in investments, or in savings or in partner accounts, a customer actually does not exactly know how much he would get on his money. However, there are bank records for several years that let forecast next periods of time.

Virtually, these are investment instruments. One of the moments that many are trying to employ is that Islamic financial institutions are thought to have been terrorist money. We would like all Islamic financial structures to come under the Central bank’s regulations, and the grey market to become normal and transparent, so that finances in it can be retraced.

What is this potential market’s capacity?

- We judge by the number of Muslim population in Russia, which is 20 million. Even if only 2 million of them are engaged in active financial activity, and we know that the Muslims distinguish by their business acumen, their engagement in legal financial turnover may bring from shadow avalanchine sums of money. Additionally, our country is attracting new investors: the Malaysians, the Indonesians who take active interest in Russian market. Few people know that the biggest investment fund of Abu Dhabi through Russia’s Sberbank allocated about 1.5 billion US dollars on the Sochi 2014 Olympics. This is a winning project, Islamic money virtually helped Russia hold the Olympics.

There is a number of other attractive projects, for instance concerning Russian Railways ‘RZD’, including the highway to Kazan, logistic projects. Energy projects. As soon as the government realized how interesting this is, it has quite efficiently introduced changes concerning double taxation between the Emirates and Russia. State corporations now may enter corresponding agreements, attract Islamic banks’ funds without being taxed. On Russia’s part these are Sberbank, Gazprom and Rosneft, and on the part of the Emirates – leading investment funds, large state Islamic banks. They very actively dialogue with Russia. Leading state banks very aggressively lobby Russia's interests and negotiate many investment projects. Consider Sberbank, for example. The Islamic world excepts this bank as a responsible partner. Meantime, government authorities’ assistance and revision of the legislation will considerably mend the matter.

Would it be interesting for private banks, if the legislation will be correspondingly complemented?

- Certainly. In our southern regions –Chechnya, Dagestan, Ingushetia, Transcaucasus – private banks partially operate in the shadows. While the above said will reduce their risk operations. All this will be regulated, taxes will be paid wherein they are not paid at all.

Is this the case only of Muslim regions or capital city banks as well?

Banks in the capital cities also. Watch the news and you will see that the downtown of Moscow and Petersburg completely halt during Ramadan. Let half be visitants, but Russia for them presents their second home. We have Arab expat communities wherein a lot of businesspersons. We are actively working with Iran and its community expands along. Our team’s practice with the countries and their legislations that operate under shariah laws and conform to Quran standards shows that in the framework of a new word they produce a positive result and do not obstruct each other. Everything is being regulated and they get taxes on the turnover.

Our neighbor countries, such as Kazakhstan, demonstrate very successful practices. Kazakhstan is a vast county with oil resources and primary resources. This is the primary source of their principal income. They took the line of active introduction of Islamic financial institutions over 5 years ago and achieved good results. Today Islamic banks’ investment in financial sector of Kazakhstan accounts for several billions of dollars. Largest Islamic, Arab investors go to Kazakhstan, and, unfortunately, do not come to Russia for the present.

KazanSummit 2015 – 746 participants from 45 countries

Admin3 — Fri, 12 Jun 2015 11:38:20 GMT

For participation in the VII International economic summit of Russia and OIC countries have registered 746 people from 45 countries: Russia, Saudi Arabia, Turkmenistan, Egypt, Turkey, Pakistan, UAE, Somalia, Kazakhstan, Iran, Malaysia, UK, Luxembourg, Italy, Morocco, Palestine, Tajikistan, Mauritius, Qatar, the Netherlands, Latvia, Azerbaijan, Nigeria, Brunei-Darussalam, Algeria, Indonesia, Korea, Zambia, Iraq, China, South Africa, Uzbekistan, Kyrgyzstan, India, Georgia, Yemen, the Philippines, Jordan, Afghanistan, Bangladesh, Lebanon, Switzerland, Macedonia, Hungary, Bahrain.

In KazanSummit 2015, there will be 133 participants from the regions of Russia and 267 participants from the Republic of Tatarstan. 113 representatives of foreign countries will come to the summit. 139 participants represent youth wing of the OIC countries. 94 representatives of mass media from Russia, Switzerland, Lebanon, Jordan, and the UK will cover the work of the VII International economic summit of Russia and OIC countries.

VII International economic summit of Russia and OIC countries – KazanSummit 2015 will be held in June 15-16th in Korston Kazan hotel trade and entertainment complex. The main organizer of an annual KazanSummit is the Islamic Business and Finance Development Fund (IBFD Fund) – center for Islamic business and finance competence. The golden partner of KazanSummit 2015 is TATNEFT, one of the largest Russian oil companies, being an internationally recognized vertically integrated holding. The leading Russian bank – Vneshprombank is the silver partner of the summit. The International partner of KazanSummit 2015 is the Islamic Development Bank (IDB). The Islamic Development Bank Group Business Forum (THIQAH), established by IDB, Islamic World Entrepreneurs Network (ISWEN), the Organization of Islamic cooperation (OIC) are partners of KazanSummit 2015 on the international level. Insurance partner of KazanSummit 2015 – one of the leading integrated suppliers of insurance and financial services in the world – Allianz.

The International economic summit of Russia and OIC countries is being organized by IBFD Fund and supported by the Federation Council of the Russian Federation, Tatarstan government, and the Association of the regional investment agencies of Russia. ISLAMIC FINANCE FOR CONSTRUCTIVE GLOBAL TRADE AND INVESTMENT is the main theme of the event.

Within seven years, the summit has passed the way from a conference on Islamic Finance to a large-scaled international economic summit, which contributes to the strengthening of international relations of Russia. KazanSummit is attended by the key market players, both Russian and foreign financial institutions, international regulators in the field of Islamic Finance, heads of state corporations and large businesses.

Islamic banking in Russia may ease effect of sanctions – head of Sberbank

Admin3 — Wed, 03 Jun 2015 07:44:23 GMT

"We will actively promote the development of such a tool as Islamic banking, as it opens up a good opportunity to work with international partners amid sanctions," said Gref on Friday at a shareholders meeting.

"In circumstances where we have problems with raising funds on the international markets, it is a very important thing," he said, adding that he had recently held a series of meetings in the Republic of Tatarstan with Arab investors.

Tatarstan is a key Russian region where the idea of Islamic banking is being actively developed. Investors from the Gulf States are ready to inject huge funds in the development of such an alternative financial system in Russia, given a significant demand from the Muslim population.

The rapid growth of the Muslim population in Russia contributes to a sharp increase in demand for Islamic banking tools expected in the coming years, said Samir Tagiyev, manager for business development in the CIS and Europe, the Islamic Corporation for the Development of the Private Sector (ICD), quoted by Vesti Finance.

The Islamic financial system has the same tools as the conventional one, but the percentage basis is replaced with the provision of shares in the company, and, hence, income. This means the bank shares all the risks with its borrower. Therefore, lending under Islamic banking is purpose-oriented.

Usury or any other activity that involves receiving interest income is unacceptable in Islam. Financial transactions should be based on a real trade or business and should not be connected with activities prohibited by Sharia law, such as gambling or alcohol.

The Russian government has to elaborate a legal framework that will integrate Islamic banking into Russia's financial system. If this is done, the volume of Islamic financial assets not only in Russia, but also the countries of Central Asia, could reach $24 billion as early as 2018, according to Vesti Finance.

KazanSummit 2015 will be held on June 15-16th

Admin3 — Thu, 30 Apr 2015 10:10:01 GMT

KazanSummit annually organized by IBFD Fund and supported by the Federation Council of the Russian Federation, Tatarstan government and the Association of the regional investment agencies of Russia is not just a unique but the major strategic event. Global significant issues that determine the direction to the development of the economic relations between Russia and countries of the Islamic world are in the agenda of this large-scale international event. Among the major issues actively discussed during the previous summits were international trade, smart cities construction, foreign investments and food security.

ISLAMIC FINANCE FOR CONSTRUCTIVE GLOBAL TRADE AND INVESTMENT is the main theme of the VII International economic summit of Russia and members countries of the Organisation of Islamic Cooperation (OIC) – KazanSummit 2015, which will be held on June 15-16th in the third capital city of Russia – Kazan. Islamic finance industry showing a high growth rate of the global financial sector acts as an economic tool for the development of trade, attraction of investment and effective collaboration between Russia and countries of the Islamic world.

The special observer status of OIC that the Russian Federation received in 2005 provides a fundamental base for the improving interrelations between Russia and OIC member countries. That step has created a political foundation for further cooperation development so proactive efforts are put together in order to economically fulfill the established relations. Hence KazanSummit, an effective and successful business mechanism, is the main platform for developing relations between Russian regions and OIC member countries that takes an economic cooperation to the international scene.

Over 7 successful years KazanSummit has got a worldwide recognition as a practical and important event. It results in signing numerous business agreements, great number of new business networking and effective implementation of investment projects.

Linar Yakupov: «Welcome to the main economic interaction platform of Russia and OIC countries – KazanSummit 2015»

Admin3 — Thu, 30 Apr 2015 10:05:57 GMT

Global significant issues that determine the direction to the development of the economic relations between Russia and countries of the Islamic world are in the agenda of this large-scale international event. Among the major issues actively discussed during the previous summits were international trade, smart cities construction, foreign investments and food security.

ISLAMIC FINANCE FOR CONSTRUCTIVE GLOBAL TRADE AND INVESTMENT is the main theme of the VII International economic summit of Russia and members countries of the Organisation of Islamic Cooperation (OIC) – KazanSummit 2015, which will be held on June 15-16th in the third capital city of Russia – Kazan. Islamic finance industry showing a high growth rate of the global financial sector acts as an economic tool for the development of trade, attraction of investment and effective collaboration between Russia and countries of the Islamic world.

The special observer status of OIC that the Russian Federation received in 2005 provides a fundamental base for the improving interrelations between Russia and OIC member countries. That step has created a political foundation for further cooperation development so proactive efforts are put together in order to economically fulfill the established relations. Hence KazanSummit, an effective and successful business mechanism, is the main platform for developing relations between Russian regions and OIC member countries that takes an economic cooperation to the international scene.

Over 7 successful years KazanSummit has got a worldwide recognition as a practical and important event. It results in signing numerous business agreements, great number of new business networking and effective implementation of investment projects.

Core Principles for Islamic Finance: integrating with the Global Regulatory Framework

Admin3 — Thu, 26 Mar 2015 07:08:20 GMT

The proposed Core Principles for Islamic Finance Regulation represent an advanced approach to the assessment of supervisory and stability regimes, one that is benchmarked against the new global regulatory architecture. The need for Core Principles arises in the context of the sustained growth of Islamic finance, and its increasing integration into the global economic system. These developments present a set of opportunities and challenges to its further prospects requiring a consistent, cross-national framework for its stability and resilience. While there are significant benefits to Islamic finance from the process of growth and international integration that is underway, there are corresponding challenges in building up the regulatory, supervisory and surveillance capabilities to contain vulnerability to cross-border volatility and contagion.

Currently, many regulatory authorities that are new to the regulation and supervision of the Islamic financial services industry face challenges in identifying the applicable principles and benchmarks for assessing the gaps in their existing structures as well as the appropriate policies in their jurisdictions in a manner that addresses the specificities of Islamic finance. The issuance of upcoming IFSB Core Principles for Islamic Finance Regulation will fill this gap and provide a framework for assessment of supervisory system for Islamic banking sectors, to be followed by similar principles for other sectors. The Core Principles are also aimed at protecting consumers and other stakeholders by ensuring that the rights of the various parties are recognised and respected. Moreover, the Core Principles serve to strengthen the linkages between the financial sector and the real economic sector, which underpins Islamic finance, and in ensuring that institutions offering Islamic financial services act in accordance with their fiduciary responsibilities in all their operations, especially in regard to fund providers.

The 12th IFSB Summit will focus on this major development in the supervision and monitoring approach to the Islamic financial services industry. In particular, various sessions in the Summit will address the role of the Core Principles in enhancing the regulatory consistency and resilience of the Islamic financial services industry as well as enabling the necessary frameworks and pre-conditions for the assessment of regulatory and supervisory regimes.

The Summit will also entail a sharing of experiences related to the challenges faced by both regulatory authorities and financial institutions in the adoption of the new Basel capital and regulatory frameworks, along with the progress towards the adoption of the IFSB's recent standards on stress testing, liquidity management and the revisions to the capital adequacy standard.

The important changes taking place in the global regulatory architecture provides the setting for Islamic finance to play a stronger role in real sector development and in facilitating cross border integration. With regional and international hubs for Islamic finance being discussed and planned across advanced jurisdictions and emerging markets alike, the Summit will provide an environment that supports greater dialogue amongst key players on this important set of issues.

Russia looks to lift first barrier to Islamic finance as crisis grows

Admin3 — Wed, 25 Mar 2015 06:37:16 GMT

The draft law, sent to parliament’s lower house, the State Duma, this week, proposes allowing banks to engage in trade activities, a concept central to many of the structures used in sharia-compliant financial products.

While many other obstacles remain, the bill is seen a first step to spur development of a sector which has posted double-digit growth in several Gulf and Southeast Asian countries, but which has struggled to get off the ground in Russia.

Instead of interest, which is prohibited on religious grounds, Islamic finance relies on banks charging service fees and depositors sharing in bank profits. Turkey is another country that is looking to expand in the sector.

«During a period of a practically total economic blockade from Europe and the U.S., our banks must find new ways to attract investment», said Dmitry Savelyev, who sits on the Duma’s financial markets committee.

Western-imposed sanctions on Russian officials and large firms over the country’s role in the Ukraine crisis have dried up access to international capital markets. A collapse in oil prices has further contributed to a slowdown in the economy, which is expected to contract by at least 3 percent this year.

The draft law must pass three readings in the Duma before it moves to the upper house and then to President Vladimir Putin’s desk to be signed into law.

Lawmakers would have to pass further amendments in areas such as taxation before the sector can fully develop. The changes could take at least a year to be passed, experts say.

State development bank Vnesheconombank and VTB Bank, both hit by sanctions, have sought to build their Islamic finance know-how in a bid to develop new funding sources.

One impulse for the recent efforts is that Russia is looking to diversify its economic ties away from Western markets, said Linar Yakupov, the head of the Association of Regional Investment Agencies of the Russian Federation.

«This is where recent sanctions became a kind of catalyst, an extra push, to further look at the economic perspective in the relationship between Russia and OIC (Organisation of Islamic Cooperation) countries», he said in an interview in Bahrain.

Islamic finance could attract foreign investment and also mobilise funds from Russia’s 20 million Muslims, Yakupov added.

Political will

Legislation is crucial to facilitating Islamic finance transactions which can attract double or triple tax duties as they require multiple transfers of underlying assets, moves which countries like Britain and Luxembourg have addressed.

«It is theoretically and technically possible for the government to prepare a law on Islamic banking, but it all depends on political will», said Murad Aliskerov, chief executive of LaRiba Finance, an Islamic financial company based in Russia’s Dagestan republic.

«Islamic banks could have a huge social impact and act as an alternative to traditional banks».

A feasibility study is now under way between a consortium of Russian and Malaysian investors to create a standalone Islamic bank or an Islamic unit within a Russian lender, Yakupov said.

The study would be ready by September, allowing the sides to draw up concrete details for creating such an entity and assess which laws would have to be changed, he said.

Companies are also keen to explore Islamic bonds (sukuk) as alternative financing tools, with Russia’s Tatarstan republic hosting an industry summit next month focused primarily on such instruments.

The impact could extend to former Soviet republics in central Asia. A proposal is being pushed to create a regional working group to coordinate Islamic finance efforts with countries such as Kazakhstan, Tajikistan and Kyrgyzstan.

A draft law on Islamic Banking was submitted in the State Duma

Admin3 — Thu, 19 Mar 2015 05:41:15 GMT

If the document is accepted, the appropriate amendments will be made in the federal law on «Banks and banking activity». Author of the draft law is Dmitry Savelyev – the Deputy Chairman of the Duma Committee on Financial markets.

The explanatory note to the draft law mentions that attracting Islamic investments is an extremely effective tool in conditions of difficult economic situation. It is stated that within economic development strategy of Russia giving a chance to Islamic finance means to attract a large number of additional investment, in conditions of crisis economy to help Russia develop a new economy based not on raw materials’ money.

Last year in August the Association of Russian Banks has described in the letter to the Central Bank the need for amendments in the legislation to give an opportunity for Islamic Banks in Russia. In the beginning of March 2015 it was announced that the State Duma is preparing the amendments.

The 12th IFSB Summit will be held in Rixos Almaty, Kazakhstan

Admin3 — Fri, 06 Mar 2015 08:04:17 GMT

The Annual IFSB Summits aim to bring together industry leaders and professionals from across the globe. In particular, participants of the previous Summits have included key players of the Islamic Financial Services Industry, especially members of the IFSB from among regulatory and supervisory authorities, international, inter-governmental organisations and market players.

The proposed Core Principles for Islamic Finance Regulation represent an advanced approach to the assessment of supervisory and stability regimes, one that is benchmarked against the new global regulatory architecture. The need for Core Principles arises in the context of the sustained growth of Islamic finance, and its increasing integration into the global economic system. These developments present a set of opportunities and challenges to its further prospects requiring a consistent, cross-national framework for its stability and resilience. While there are significant benefits to Islamic finance from the process of growth and international integration that is underway, there are corresponding challenges in building up the regulatory, supervisory and surveillance capabilities to contain vulnerability to cross-border volatility and contagion.

Currently, many regulatory authorities that are new to the regulation and supervision of the Islamic financial services industry face challenges in identifying the applicable principles and benchmarks for assessing the gaps in their existing structures as well as the appropriate policies in their jurisdictions in a manner that addresses the specificities of Islamic finance. The issuance of upcoming IFSB Core Principles for Islamic Finance Regulation will fill this gap and provide a framework for assessment of supervisory system for Islamic banking sectors, to be followed by similar principles for other sectors. The Core Principles are also aimed at protecting consumers and other stakeholders by ensuring that the rights of the various parties are recognised and respected. Moreover, the Core Principles serve to strengthen the linkages between the financial sector and the real economic sector, which underpins Islamic finance, and in ensuring that institutions offering Islamic financial services act in accordance with their fiduciary responsibilities in all their operations, especially in regard to fund providers.

The 12th IFSB Summit will focus on this major development in the supervision and monitoring approach to the Islamic financial services industry. In particular, various sessions in the Summit will address the role of the Core Principles in enhancing the regulatory consistency and resilience of the Islamic financial services industry as well as enabling the necessary frameworks and pre-conditions for the assessment of regulatory and supervisory regimes.

The Summit will also entail a sharing of experiences related to the challenges faced by both regulatory authorities and financial institutions in the adoption of the new Basel capital and regulatory frameworks, along with the progress towards the adoption of the IFSB's recent standards on stress testing, liquidity management and the revisions to the capital adequacy standard.

The important changes taking place in the global regulatory architecture provides the setting for Islamic finance to play a stronger role in real sector development and in facilitating cross border integration. With regional and international hubs for Islamic finance being discussed and planned across advanced jurisdictions and emerging markets alike, the Summit will provide an environment that supports greater dialogue amongst key players on this important set of issues.

About IFSB

The Islamic Financial Services Board (IFSB) is an international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors.

As at December 2014, the 184 members of the IFSB comprise 59 regulatory and supervisory authorities, eight international inter-governmental organisations, 112 financial institutions and professional firms as well as five self-regulatory organisations (Industry Associations and Stock Exchanges) operating in 44 jurisdictions.

Towards this end, the IFSB works closely with relevant international, regional and national organisations, research/educational institutions and market players.

Welcome to KAZAN SUKUK CONFERENCE 2015

Admin3 — Fri, 20 Feb 2015 09:27:20 GMT

The first conference was held in 2011 and has given a background for first sukuk initiatives of the government and business entities of Russia in the related field. At the moment state authorities, financial institutions and large russian corporations are looking for alternative funding sources and actively studying sukuk market. IBFD Fund as the main driving force behind the promotion of sukuk instrument on federal, regional and corporate levels is holding the 2nd KAZAN SUKUK CONFERENCE to meet the needs of russian public and private entities.

The Conference is the premier Islamic securities event in Russia and brings together over 100 high-level representatives of the russian government, regulators, business entities and top international sukuk market players to discuss sukuk structures and their application, jurisdictions and platforms for sukuk issuances, investment projects and underlying asset pools, regulation and Sharia issues to give an opportunity for russian companies to enter global sukuk market.

To get more information about the event please visit: www.kazansukuk.ru. For any enquiries please do not hesitate to contact us on +7 843 567 60 60 or via kazansukuk@ibfd-fund.com.

Mohammad Bin Rashid honours winners of the Islamic Economy Award

Admin3 — Tue, 20 Jan 2015 11:33:19 GMT

Initiated by the Dubai Islamic Economy Development Centre (DIEDC) and organised by Dubai Chamber of Commerce and Industry and Thomson Reuters, the award closing ceremony was attended by Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai.

The awards were presented to a cross-section of global and local business establishments for their innovative world-class business initiatives and ideas that are Sharia-compliant and contribute to the social and economic welfare of the Muslim population.

Shaikh Mohammad presented Dr. Ziti Akhtar Aziz, Governor, Malaysian Central Bank, with the Lifetime Achievement Award.

The Money and Finance category award was received by the Islamic Corporation for the Development of the Private Sector (ICD) from Saudi Arabia; award in the Food and Health category went to Salma an entity of Awqaf & Minor Affairs from the UAE; and Media category to The 99, an initiative of Teshkeel Media Group from Kuwait.

Awards in other categories including Hospitality and Tourism were presented to Halal Minds from Indonesia; Waqf and Endowments category went to National Awqaf Foundation of South Africa; SME Development category to LaunchGood from USA; Islamic Economy Knowledge Infrastructure category to KFH Research from Kuwait; Islamic Arts category to Yusuf Islam, Singer, Songwriter & Author’ from the UK.

Hajj Saeed Bin Ahmad Al Lootah, founder of the world’s first Islamic Bank, received a special recognition from Shaikh Mohammad for his contribution to the Islamic Economy.

Mohammad Abdulla Al Gergawi, Chairmain of DIEDC said: “We, in the UAE, are keen to support innovation and creativity in various sectors. Through the Islamic economy award, we aim to inspire the business community to provide innovative Islamic services and solutions. In addition, we offer a platform to showcase and recognise the distinguished efforts of companies engaging in the Islamic economy, in line with the vision of Shaikh Mohammad in making Dubai the global capital of Islamic economy”.

During his welcome address, Hussain Qemzi, Member of the DIEDC Board and Chairman of Awqaf and Minors Affairs Foundation, said: “The Islamic economy award in its second edition comes after one successful year that gave the UAE in general and Dubai in particular credibility in driving the growth of the Islamic economy in banking and finance, knowledge and researches, family — friendly tourism and halal industry”. In one year only, the award attracted 248 submissions compared to 148 in 2013 and from 48 countries compared to 31 in 2013.

“The importance of the Islamic Economy Award has its roots in the integrated Islamic Economy system which cuts across many economic sectors including infrastructure, tourism, health, food, art and banking services”, said Majid Al Shamsi, 1st Vice-Chairman, Dubai Chamber. “Interestingly, this comprehensive model is being adopted by many countries of the world in light of the global Islamic Economy’s potential GDP value of more than $8 trillion which clearly shows a growing trend in global consumer habits towards Islamic services and products”.

The independent jury panel, which was headed by Qemzi, included Khalid Al Aboudi, Andreas Schotter, Dr Mohammad Azmi Omar, Tayeb Abdulrahman Al Rais, Fatih Mehmet Gul, Shelina Janmohamed, Tariqullah Khan, and Fareed Lutfi.

Nadim Najjar, general manager of Thomson Reuters for the Mena region, said: “We congratulate the winners and wish them all success in their initiatives and activities that drive the growth of the Islamic economy sector — both regionally and internationally. The development of the Islamic economy landscape relies largely on the ethical practices that define the framework of businesses. This makes it imperative to recognise successful initiatives and encourage companies and individuals to endorse best practices across the various Islamic economy sectors».

Source: Zawya

CIBAFI, IDB meeting on global Islamic finance

Admin3 — Tue, 20 Jan 2015 08:35:43 GMT

The roundtable meeting of the directors of Operations and Investment of Islamic banks, themed «Internationalization Strategies of Islamic Financial Institutions» will be held on February 23 and 24 in Manama, Bahrain.

The roundtable meeting is part of the Strategic Objective 3 – Awareness and Information Sharing of CIBAFI Strategic Plan 2015 – 2018. It is also in line with the IDB’s objectives in promoting development and supporting the Islamic financial services industry (IFSI).

It aims at creating a platform for sharing the best practices amongst the CIBAFI members and discussing issues and challenges of internationalization of the IFSI.

The internationalization of Islamic financial institutions presently is considered as one of the topical themes to boost global linkages in the IFSI. Recent initiatives have been taken by IFIs, supported by local regulators, to establish themselves at the global level through expanding their operations and investments across borders.

Hence, this Roundtable Meeting (RM) on “Internationalization Strategies of Islamic Financial Institutions” aims to explore recent opportunities and challenges in the area of internationalization of IFIs in several key fronts, and to provide a common platform for sharing best practices amongst industry experts and leaders in international operations. The specific focus of the RM includes global operations and expansions, cross-border syndicated financing, and trade financing.

The roundtable meeting will be convened in two days consisting of five sessions:

• Heterogeneity in Islamic finance development, Shariah and regulatory frameworks across different jurisdictions;

• Key requirements for internationalization, modes of entry, and strategies to achieve competitive positioning of foreign Islamic financial institutions;

• Rebranding as an expansion strategy for Islamic Financial Institutions;

• Cross-border Islamic syndicated financing; and

• Trade financing for IFSI to boost global real-sector linkages to go mainstream.

Participation in the Roundtable Meeting is by invitation only, targeted group of participants are heads of global markets, chief financial officers, heads of global trade finance, heads of syndicated financing, and heads of other relevant functions in Islamic financial institutions.

Source: TradeArabia

Dar reiterates govt’s resolve to switch over to Islamic banking

Admin3 — Mon, 12 Jan 2015 09:39:07 GMT

«The Shariah compliant assets currently stand at 10 per cent of the total banking products in Pakistan», Dar said this while addressing a seminar here. The Seminar titled «Promoting excellence in Islamic Finance» was organised by State Bank of Pakistan (SBP) in collaboration with UK aid, Department of International Development with an aim highlight the importance of Islamic banking. Dar said that Pakistan has been the early promotor of shariah compliant as government has taken several steps to promote Islamic banking and finance in Pakistan.

The government has issued sukuk bonds in international market which received overwhelming response and Pakistan was entered in the Sukuk market after nine years, he said. He said that government has also formed a steering committee headed by SBP deputy governor which was actively working on the development of reliable database and human resource needed by the Islamic banking. Dar said at present, the Islamic finance industry of Pakistan consists of 19 Islamic banks with a network of 1,200 branches spread across 80 districts, 27 Mudaraba companies, 15 mutual funds and 5 Takaful companies.

The industry now constitutes over 10 per cent of Pakistan’s financial system and maintains strong growth momentum, adding that Islamic finance industry in Pakistan needs trained human resource in order to realise the true market potential and emerge as a strong player in the global financial arena, he said. He said that various local institutions are offering educational programs related to Islamic banking and finance, however, these are relatively few while the demand and supply gap is huge. He said that 10 per cent share of Islamic banking against the total banking sector was much below than the existing potential and needed to further enhanced as globally shariah compliant assets are expected to grow by 15-20 per cent per annum over next few years. He informed that Islamic financial assets are likely to hit $5 trillion mark by 2020 and there were opportunity to find Islamic finance solutions to find achieve the millennium development goals.

He stressed the need for introducing different short and long term courses for preparing the skilled Islamic financial experts as skill human resource play vital role in development. Replaying to a question, he said that 80-85 per cent concerns regarding constitution of Judicial Commission were addressed and negotiation on three clauses was in progress. Speaking on the occasion, SBP Governor Ashraf Mahmood Wathra said that the event was aiming to promote excellence in Islamic banking, adding that about 2 billion people across the globe have no access to finance.

SBP, he said has taken several steps for marginalised segments of the society and started financial inclusion programme adding that over 10 billion earmarked for the programme. Globally the size of Islamic finance industry had reached to $1.8 trillion in 2013 and according to some estimates it is likely to reach $5 trillion by 2020, he remarked. He said that the total assets of Islamic banking in Pakistan reached over one trillion by end of December 2013 from adding that the total Islamic Banking deposits reached Rs. 868 billion in December 2013 which accounts 10.4 per cent of the total deposits of the banking sector. SBP governor said that the bank has fixed a target to enhance the share of Islamic banking up to 20 per cent which currently stood at 10.4 per cent by increasing banking network up to 2,000 branches from existing 1,400 branches.

Source: Daily Times

Dubai Islamic Bank Picks Arrangers For Potential Tier 1 Sukuk

Admin3 — Thu, 08 Jan 2015 11:11:50 GMT

Dubai Islamic Bank said on Tuesday it picked eight banks to arrange fixed income investor meetings from Thursday for a potential benchmark size dollar-denominated capital-boosting sukuk issue.

DIB, the largest Islamic bank in the United Arab Emirates, has mandated HSBC and Standard Chartered as the joint structuring banks.

Those two banks, as well as Al Hilal Bank, Emirates NBD , National Bank of Abu Dhabi, Noor Bank, Sharjah Islamic Bank and its own investment banking team will arrange the roadshows, it said in a statement.

The investor meetings will be held in Asia, the Middle East, and Europe and a sukuk transaction which enhances its Tier 1, or core, capital may follow subject to market conditions, it said.

Source: Gulf Business