ADIB partners with UAE Ministry of Social Affairs to promote financial education

| Monday, December 29, 2014
ADIB will support the "Tejuri" initiative, which is being implemented by the ministry’s Department of Family Development, by taking its message of saving and responsible financial management to schools and colleges. The banks will also offer cash prizes to encourage children to open long-term savings accounts.
The agreement was signed by H.E. Naji Al Hai Mubarak, Acting Undersecretary of the Ministry of Social Affairs, and Nawal Al Bayari, Business Head at ADIB's Retail Segment.
H.E. Naji Al Hai Mubarak, Acting Undersecretary of the Ministry of Social Affairs, said: “We strongly believe in the importance of strengthening the cooperation between the governmental and the private sector, enabling us to provide the best services to our nation. We are pleased to sign this agreement with ADIB, which will help younger members of society to improve their financial awareness. The Ministry of Social Affairs and ADIB are completely aligned in our aim to educate and instil the habits of saving and responsible spending.”
Nawal Al Bayari, Business Head at ADIB's Retail Segment, added: “As a leading bank, ADIB has an obligation to help communities improve their financial awareness and implement best financial practices. We believe that providing children with financial literacy will play a key role in their future financial decisions and will build a sense of responsibility. Our partnership with the Ministry of Social Affairs emphasizes our commitment to help citizens enjoy a balanced financial life, which will contribute to a strong national economy.”
Under the agreement, ADIB will offer participants of the “Tejuri” initiative the opportunity to save through the "Banoun" children’s savings account for under 18s, and the "Shabab" account, aimed at young adults of 15 to 25 years.
The partnership is part of ADIB’s broad programme to increase financial literacy in the UAE. ADIB has launched a ‘Smartmoney’ campaign, which includes a booklet, a Website and an app that provide advice and practical tools for budgeting, saving, managing debt and investments, aunderstanding risks and creating personal wealth.
ADIB’s “banoun” children’s account is a Shari’ah compliant savings account that enables parents to save for their children and provides them with a host of unique features and privileges. To appeal to the imagination of children and involve them in this initiative, ADIB has created Darhoom, a mascot in the shape of a UAE Dirham. Children are expected to interact with Darhoom initially through a booklet of tips and stories that explains financials in a simplified manner.

http://www.cpifinancial.net/news/post/29490/adib-partners-with-uae-ministry-of-social-affairs-to-promote-financial-education

MEETHAQ SHARI’A BOARD REVIEWS GROWTH STRATEGY

|

Muscat - 
The Meethaq Shari’a Supervisory Board conducted its final meeting of 2014 under the chairmanship of Sheikh Ali Qaradaghi, attended by Sheikh Essam Muhammad Ishaq, Sheikh Majid al Kindi, Abdulqader Thomas and Saeed al Muharrami. 
The board reviewed Meethaq activities during the year and discussed the strategy for the coming period, especially Meethaq products in the pipeline as well as contracts and agreements relating to these products.
Sulaiman al Harthy, group general manager – Meethaq Islamic Banking, said: “The Meethaq Shari’a Supervisory Board discussed many important topics such as new product contracts and Meethaq workflow. Meethaq is proud to have on board some of the brightest minds on Islamic finance to chart the way forward. The Shari’a Board has made valuable contributions in establishing Meethaq as the leading Islamic banking services provider in Oman.”
Meethaq offers a full suite of Islamic banking products. The Shari’a compliant products and services include savings account, current account, home finance, auto finance, credit card, mobile banking etc.
Presently, Meethaq has 11 branches across the sultanate and plans to expand the branch network as well as launch new products and services to complement the unique Islamic banking experience.



AAOIFI Issues New Accounting Standard on Investment Accounts

|
Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has issued a new accounting standard on investment accounts - Financial Accounting Standard No. 27 (FAS 27) Investment Accounts.The new FAS 27 updates and replaces two of AAOIFI 's previous accounting standards relating to investment accounts - FAS 5 Disclosure of Bases for Profit Allocation between Owners' Equity and Investment Account Holders as well as FAS 6 Equity of Investment Account Holders and Their Equivalent.
This standard applies to investment accounts based on Mudaraba contracts which represent "equity of investment accountholders and on Mudaraba contracts that are placed on "short term basis" (overnight, seven days, one month basis) by other financial institutions as "interbank-bank deposits" for the purpose of liquidity management. However, it is not applicable to own equity instruments, wakala contracts, reverse murabaha, musharaka or sukuk.
Dr Hamed Hassan Merah, Secretary General of AAOIFI said that the new standard was developed through extensive consultation with the international Islamic finance industry. The standards development process (the due process) was carried out through up to thirteen stages, commencing with the commissioning of consultants who prepared the exposure drafts and concluding with the official inssuance and publication. One of the essential stages is the public hearing which is designed to gather and gauge the opinions and views of experts and practitioners from the broader Islamic finance industry. He added, " AAOIFI is currently working on revision of a number of existing standards and developing new ones in order to give better support to the industry".
The new standard will be included in the next publication of AAOIFI standards scheduled for early 2015.
About AAOIFIAAOIFI , established in 1991 and based in Bahrain, is the leading international not-for-profit organisation primarily responsible for development and issuance of standards for the global Islamic finance industry. It has issued a total of 88 standards in the areas of Shari'a, accounting, auditing, ethics and governance for international Islamic finance. It is supported by over 200 institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from over 45 countries. Its standards are currently followed by all the leading Islamic financial institutions across the world and have introduced a progressive degree of harmonisation of international Islamic finance practices.
For more information, please contact:
Mr. Khairul Nizam, 
Deputy Secretary General, AAOIFI 
Office: +973 - 1724 4496; 
Mobile: +973 - 3974 5528; 
e-mail: aaoifi@batelco.com.bh

https://www.zawya.com/story/AAOIFI_Issues_New_Accounting_Standard_on_Investment_Accounts-ZAWYA20141229060301/

Islamic banking in Canada increases dramatically amid N. American financial crisis

|
After emerging largely unscathed from the financial crisis that hammered North American and European financial institutions, Islamic banking has momentum.
Worth $1 trillion in assets, Islamic banking is being lauded by British Prime Minister David Cameron and supported by Canada’s Conservative government, major banks and credit unions, leading business schools and influential Muslims across the country.
Islamic banking — which bans interest payments, pure monetary speculation and investing in such things as alcohol, gambling, pornographic media and pork — is being sold as the next big thing in financing for Canada, which is home to just over a million Muslims.
“Awareness in Canada of Islamic banking has increased dramatically in the last few years,” says Walid Hejazi, an associate professor at the University of Toronto’s Rotman School of Management, where he teaches on the subject.
“With the federal government’s efforts in this respect, Canada’s attractiveness to Islamic finance will grow,” Hejazi says. He cited how Prime Minister Stephen Harper’s government helped sponsor a World Islamic Banking Conference last year in the oil-rich Persian Gulf.
Many Canadian Muslims are seeking “Shariah-compliant banking solutions to their personal finances,” says Hejazi, a Lebanese-Canadian. They want home mortgages that are not based on conventional Western interest payments, but which operate more like a partnership.
The International Monetary Fund, Hejazi says, recently attributed the expansion of Islamic finance to demand from the increasing number of Muslims living in the West, growing oil wealth in Muslim countries and people seeking “ethical” and lower-risk financial products.
Even though Islamic banking has some harsh critics among Canadian Muslims who consider it unwieldy — with many still suffering from the 2011 bankruptcy of Toronto-based UM Financial, which offered Shariah-compliant mortgages — the movement is gaining energy.
In addition to Canadian banks, such as CIBC, making explicit gestures to offer Islamic banking, Hejazi says the Canada Mortgage and Housing Corporation recently reported there are no regulatory hurdles to stop Shariah-compliant banking expanding in Canada.
To continue to grow, some of the world’s largest Islamic banks — most of which are in the Middle East, Indonesia and Pakistan — are looking at rebranding to appear less religious and more open to Western investors drawn to the kind of no-interest cooperative banking that is also offered in countries such as Sweden.
For instance, the Abu Dhabi Islamic Bank, the largest Shariah-compliant lender in the emirate, is considering removing the word “Islamic” from its name and calling itself Abu Dhabi International to emphasize its service quality. Many financial institutions in Muslim-majority countries already simply call themselves “participation banks.”
“I think many Muslims in Metro Vancouver are excited about the idea of Islamic banking. In general, I think it’s a good idea,” says Luay Kawasme, director of the Vancouver Muslim Community Centre.
“The appeal of it for Muslims is they don’t have to get involved in financing that involves interest. Instead, the risk occurs between the financial institution and the borrower. You basically go into business together as partners.”
The Islamic ban on usury grew out of the seventh-century era of Mohammed. The founder of Islam, Luay says, opposed the way “the wealthy would get outrageous returns on their loans; charging interest rates of 20, 30 and 40 per cent.”
Bans on usury are also embedded in Hebrew and Christian scriptures, Luay recognizes.
http://www.abna.ir/english/service/america/archive/2014/12/29/661333/story.html

Russian Banks Warm to Shariah as Crisis Looms: Islamic Finance

|
Russian lenders are stepping up efforts to tap Islamic finance as international sanctions and a slump in oil prices push the world’s biggest energy exporter to the brink of a recession.
Vnesheconombank, Russia’s state development bank, is seeking advice from lenders in the Middle East on how to sell its first Islamic bonds, the RIA Novosti state-news service reported Dec. 16. Banks and companies are seeking Shariah financing after the nation’s currency weakened to an all-time low almost two weeks ago, according to the Russian Business Council in Dubai.
The increased efforts underscore how the highest overnight lending rate since at least 2006 and U.S.-led sanctions linked to the conflict in Ukraine are putting a squeeze on banks including Gazprombank and VTB Bank OJSC. Lawmakers rushed through legislation on Dec. 23 allowing the Deposit Insurance Agency to buy stakes in banks before they face bankruptcy proceedings to keep the system stable.
Banks and corporates “want to know how it works and how they can get into this market,” council Chairman Igor Egorov said in an interview at his Dubai office on Dec. 23. “They see an urgent need within one-to-two years, when the hunger for finance will be very acute because at the moment we still don’t see the full effect of sanctions.”
Attitude Shift
Sensitive Issue
Cash Pool
Adopting Islamic finance would mark sea change for the predominantly Russian Orthodox nation. Alexei Ulyukayev, who was first deputy chairman of the central bank until last year and is currently economy minister, said in 2011 the industry isn’t of “primary, secondary or even tertiary importance,” Gazeta.ru reported.
The central bank is now considering legislature for Islamic finance following requests from lenders, Governor Elvira Nabiullina said on Nov. 26.
Russia’s economy will probably contract next year and won’t see growth for four consecutive quarters, according to a Bloomberg survey of economists. The ruble declined almost 40 percent in 2014 as Brent crude headed for its biggest drop in six years. It’s the worst performance of about 170 currencies tracked by Bloomberg after Ukraine’s hryvnia. Brent rose 0.9 percent to $60.01 a barrel at 12:11 p.m. in Moscow.
The Bank of Russia increased the interest rate 6.5 percentage points to 17 percent on Dec. 16, which means Islamic banks can offer better deals than their conventional counterparts, according to the Association of Russian Banks.
“There’s a strategic opportunity for Islamic finance to develop in Russia because given the 17 percent rate, clients won’t go to regular banks,” Sergey Grigoryan, head of analysis division at the association, said by phone from Moscow on Dec. 23. “The market is forcing the central bank to take a closer look at the current situation.”
While Muslims make up as much as 15 percent of the nation’s 142 million people, U.S. government data show, a limited understanding of Shariah finance’s principles may delay its development inRussia.
“It’s quite a sensitive area because many people don’t really understand it, or they may see it as a threat, something unknown,” Egorov said. “They don’t understand how business is related to religion.”
That hasn’t stopped businessmen from exploring the industry. The heads of Russian banks and companies, including Vnesheconombank and Uralvagonzavod, discussed Islamic finance as part of a two-day meeting in Bahrain with their counterparts from the six-nation Gulf Cooperation Council this month, state-run news agency BNA reported Dec. 14.
“It’s now on the agenda,” Egorov said of Shariah-compliant banking. “There’s no reason why Russia should limit itself and not get funds through Islamic finance.”
http://www.bloomberg.com/news/2014-12-29/russian-banks-warm-to-shariah-as-crisis-looms-islamic-finance.html