How Islamic Finance Model can Benefit Modern Business

Source: Business Daily

  • Today, as the global economy is experiencing its first green shoots, one cannot forget the trauma of the economic winter precipitated by the global financial crisis of 2007-2008, one of the worst in living memory. Following the crisis, many economists revisited the perennial question as to whether ‘the seeds of these recurrent crises lie in the systemic flaws in the financial system?’ A number of studies have shown that Islamic banks did indeed weather the financial storm better than their...

Islamic Banks Eye Green Finance but Adoption Limited

Source: Reuters

  • Islamic banks are keen to develop sustainable practices into their businesses, but a lack of clarity on implementation means adoption of green finance remains limited, according to a report released on Friday. The findings by the Responsible Finance & Investment (RFI) Foundation, a non-profit industry body, highlight an important challenge for Islamic finance as it looks to widen its appeal beyond its core markets in the Gulf and Southeast Asia....

The Role of Islamic Finance

Source: UNDP Org

  • With the global commitment to the SDGs, we have set the course of all our development efforts towards promoting prosperity, preserving and protecting our planet and improving the livelihoods of all people. At the same time, we acknowledge that the implementation of this ambitious agenda requires significantly more financial resources. The gap in financing for SDGs is currently estimated at US$ 2.5 trillion....

Trust in Islamic Banking Rising Fast

Source: Pak Observer

  • Customers’ trust in Islamic banking will increase exponentially once the sector’s assets reach $3.3 trillion by 2021 as predicted, Sultan bin Saeed Al Mansouri, UAE Minister of Economy and Chairman of Dubai Islamic Economy Development Centre (DIEDC). “This will nominally increase sukuk issuance in the coming years and lead to the implementation of major development plans on both regional and global scales,” the minister said....

Afghanistan Approves First Full-Fledged Islamic Bank

Source: Reuters

  • Afghanistan’s central bank has granted a license to the Islamic Bank of Afghanistan (IBA), the first lender in the country to apply the interest-free principles of Islamic finance in all its operations, a senior bank official told Reuters. The IBA was previously known as Bakhtar Bank and operated under a conventional banking license since it was acquired by Azizi Bank in 2009. The central bank, Da Afghanistan Bank, granted the....

Tenets of Islamic Banking that Make it Stand Out

Source: Business Daily

  • As the global economy experiences its first green shoots, one cannot forget the economic trauma precipitated by the global financial crisis of 2007-2008, one of the worst in living memory. Following the crisis, many economists revisited the question of whether the seeds of the recurrent crises lie in systemic flaws in the financial system. A number of studies have shown that Islamic banks did indeed weather the financial storm better than their conventional counterparts, exhibiting lower hazard rates...

How do Islamic Finance Products Work?

Source: Fin24

  • Understanding how conventional finance products work can be difficult enough. The increasing popularity of sharia finance means there’s another set of products available for the public to consume, which work differently to how we’ve come to know banking and investments. Islamic finance is by no means a new concept. According to one report, the first modern-day Islamic bank was founded in 1963, in the town of Mit Gham....

As Islamic Finance Grows, Risk Factors Need More Attention

Source: Gulf Times

  • The increasingly important role Islamic finance plays in the global financial industry and its unabated expansion raises questions about the sector’s growing impact on financial stability. What we learned from the financial crisis ten years ago was that large conventional financial institutions were unable to cope with the financial meltdown because they had built up excessive and leveraged risk concentrations.....

Islamic Scholars Debate Validity of Cryptocurrencies

Source: Banking and Finance

  • The world's top Islamic finance scholars are scrutinizing the validity of cryptocurrencies, as debate grows in the industry as to whether such fast emerging financial tools can be deemed sharia compliant. The issue of religious permissibility could help determine whether Islamic financial firms can invest in cryptocurrencies, widening their appeal in the industry's main centres in the Gulf and Southeast Asia. The discussions are part of the annual sharia...

World Bank, IDB Urge Islamic Finance to Play the Long Game

Source: Reuters

  • The World Bank and the Saudi-based Islamic Development Bank want to increase the use of long-term investments in Islamic finance, tasking the industry with reducing its reliance on Islamic banks in favor of a wider array of institutions. The two multilateral bodies set out a series of policy recommendations in a joint report released this week, aiming to capitalize on the risk-sharing and asset-backed features of Islamic finance....

Islamic Finance Pole Position

Source: Strait Times

  • Franklin Templeton Investments remains confident that Malaysia will continue to play a major role in islamic financing and the outlook looks encouraging. Franklin Templeton southeast Asia regional head Adam Quaife, in a statement, said Shariah-compliant strategies continues to be attractive to investors. “Globally, total investment in Franklin Templeton Shariah-compliant strategies grew 32 per cent last year to reach nearly US$2.4 billion at the end of 2017,” he said....

Islamic Finance and the US$900 Million Resource

Source: Sta Broek News

  • Initially it was announced that Guyana will borrow US$900 million credit from the Islamic Development Bank (IsDB). However, the Minister of Finance clarified that the US$900 million is not automatically available. He noted that the government has to come up with projects consistent with the lending mandate of IsDB. Therefore, they used the term resource envelope, which means the line of financing is available...

Matheson Advises on Landmark Islamic Finance Transaction

Source: Irish Legal News

  • Matheson has advised on the first issuance and listing of a Sukuk bond that complies with the Sharia financing provisions of Irish tax law. The Sukuk bond, issued by an Irish special purpose company, marks the first Islamic finance issuance under the Irish Taxes Consolidation Act 1997 and raised over $150 million. In 2010, Irish tax legislation was amended to introduce the concept of ‘specified financial transactions’ into Irish law. The amendments, set out...

Which Islamic Bank in the Region has Biggest Market Share?

Source: AME Info

  • For the first time ever, Bloomberg has included rankings on Islamic capital markets, looking at sukuk and Islamic financing, domestic sukuk, GCC sukuk, Malaysian Ringgit sukuk and others. The GCC sukuk table states that financials have 46% of the market, followed by governments at 42%. It also looks at the market share of banks including Standard Chartered, Dubai Islamic Bank, HSBC, First Abu Dhabi Bank, Kuwait Finance House and Gulf International Bank....

Islamic Finance at a Crossroads

Source: Zawya

  • Islamic finance stands at a crossroads. After several decades of exponential growth since the introduction of modern Islamic finance in the 1970s, the industry faced headwinds following the oil price crash of 2014 as the oil-rich states of the GUlf Cooperation Council remain the industry’s biggest players. The industry began to recover in 2016 and by the end of that year its global assets had picked up to $2.2 trillion from $2.1 trillion the year before, according....

Financial Inclusion Strategy

Source: Tech Zim

  • (RBZ) introduced the Financial Inclusion Strategy with the obvious aim of drawing a marginalized number of people who are unbanked into the financial system. The Strategy is highlighted by an ambitious plan to increase the banking population from 30% at the time it was implemented to at least 90% by 2020. The affirmative action targets groups such as Micro, Small and Medium-sized Enterprises (MSMEs), women, youth....

Dubai and Nasdaq Declare Islamic Finance Ambitions

Source: Funds Global

  • The Dubai Islamic Economy Development Centre (DIEDC) is collaborating with Nasdaq Dubai on a scheme to cement Dubai’s status as a domicile for sukuk issuance. The DIEDC was established in 2013 as part of Dubai's “capital of Islamic economy” initiative. In April 2017, Dubai’s sukuk issuance reached $53.1 billion, the highest in the world. The plans were announced at a session attended by Dubai dignitaries including the crown prince and chairman of the Dubai Executive...

UAE Bankers see “huge demand” for Islamic Trade Finance

Source: GT Review

  • The Islamic finance sector will continue to show strong growth in 2018, according to a new Moody’s report, with trade finance bankers pointing to their sector as an area with huge growth potential. In its recent in-depth sector report, the credit rating agency predicts that Islamic financing assets will grow at 7% this year, thus continuing to outpace conventional counterparts. This will leave....

Islamic Finance — Focus on Capital Market Development

Source: Malaysian Reserve

  • Just as a computer’s hardware and software have to work well together for optimal computing performance, so too the two sectors of the macro economy. Where one sector is stunted or lags, economic growth would be handicapped. The composition of the financial sector matters, too. A nation’s financial sector has two broad components, the banking system and capital markets. Whereas the banking system is typically monolithic...

The Rise of Muslim Millennials and What it Means for Islamic Finance

Source: Gulf Times

  • As time goes by, a new breed of young consumers has entered the stage, a generation with attitudes, behaviours, preferences and spending habits that differ significantly from their predecessors. It’s now the age of the Millennials, and the Muslim world is not exempt. Millennials are the generational demographic bracket following Generation X, which was a more consumerist, independent-minded age cohort with entrepreneurial tendencies. Millennials, in turn, born between....

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