Islamic finance set to expand in Arab countries

The new agreement signed by the Jeddah-based Islamic Research & Training Institute (IRTI) and the Alexandria-based Arab Academy for Science and Technology will contribute to expanding Islamic banking and finance in the Arab world, said IRTI Director General Mohd Azmi Omar.
Speaking to Arab News, he emphasized the significance of the deal, saying it involves translation of books in Islamic banking and finance into Arabic. "Most books in the industry are now in English," the director general said.

Omar said the popularity of Islamic banking, which is value-based and production-oriented, is growing rapidly especially after the global financial crisis. "Islamic banks finance productive projects that can boost real economy and do not engage in speculative and unethical business activities," he said.

Asked why many countries are still reluctant to adopt the Islamic system, Omar said there is a lack of knowledge about the system, its benefits and how it functions. The IDB and IRTI have been spearheading a campaign to promote the system by organizing international conferences and seminars, conducting research and publishing books.

According to World Islamic Banking Competitiveness Report 2013 of Ernst & Young's, the global Islamic banking assets jumped from $1.3 trillion in 2011 to $1.8 trillion. The Islamic banking industry continues to record robust growth, with the top 20 Islamic banks registering a growth of 16 percent in the last three years, the report said.

Ismail Abdul Ghaffar Faraj, president of the academy, and IRTI chief Omar signed the agreement in the presence of Ahmed Mohamed Ali, president of Islamic Development Bank Group. It was in line with a memorandum of understanding signed by the IDB and the academy in July 2012.

The two sides will organize joint training courses in Islamic economics, Islamic finance and Islamic banking, Omar said, adding that IRTI would select the trainers for each course in coordination with the academy.

In a statement on the occasion, Faraj said the agreement would strengthen the partnership between his organization and the IDB. "I am happy over the good relations between the two institutions," the academy president said.

The IDB chief said the agreement would help the bank promote Islamic banking and finance in the member countries of Arab League, which are also members of the IDB. An affiliate of the Arab League, the academy is specialized in maritime transport. It was established in 1972.

© Arab News 2014

http://www.zawya.com/story/Islamic_finance_set_to_expand_in_Arab_countries-ZAWYA20140408031905/

Emaar Misr considering sukuk, other finance options-senior source

Emaar Misr for Development is looking at financing options to develop projects in Egypt, including Islamic bonds (sukuk) and an initial public offering, a senior company official told Zawya.

"We have considered sukuk and we would like to consider sukuk further ... We have tried several times to go into agreements about how to use sukuk, however we have not reached an agreement because of the difficulty of the subject in Egypt as a whole," the official said.

Development of Islamic bonds in Egypt has been hampered by the absence of legislation. The Egyptian government said in March it had drafted a bill to introduce sukuk as a debt tool to the market, which would allow private, listed and state-owned entities to issue the Islamic bonds.

Emaar Misr, which is owned by Emaar Properties of the UAE, received a USD 352 million financing package from Commercial International Bank and HSBC Egypt in 2011. The company needs to secure between EGP 3 billion-4 billion every year to fund expansion. It had sales of EGP 1.1 billion during the first quarter of 2014, according to reports.

"Commercial banks are cooperating with us. However there is a limitation at the end of the day to commercial banks and the quota that they have for real estate," the official said.

LIMITED FINANCE OPTIONS

Emaar Misr is working on three major developments across the Egypt, including one in Cairo. The company has invested EGP 39 billion (USD 5.6 billion) since it was set up and hopes to increase that to EGP 53.5 billion (USD 7.6 billion) this year.

Last month the firm said it would spend up to EGP 6 billion on a residential and commercial project in Cairo.

Limited finance options have forced the company to offer customers loans of between five to seven years to buy units.

"The problem is that we are becoming financers of our units. It is not only slowing my progress, it is also bringing me into the business of others. I am not in the business of finance. I am in the business of development," the official said, adding that there should be a government-based solution.

He said the Central Bank of Egypt is trying to find ways to facilitate the mortgage and real estate finance by introducing new laws and regulations.

IPO

Emaar Misr has announced it intended to launch an IPO and potentially a private placement. The process could take place during this year or in 2015.

"This (IPO) is very serious. We are working with several investment banks," the official told Zawya.

But he declined to provide further details or comment on the size of the stake to be offloaded or how much the company hoped to raise from the offering.

© Zawya 2014

http://www.zawya.com/story/EXCLUSIVE__Emaar_Misr_weighs_finance_options-ZAWYA20140409062026/#utm_source=zawya&utm_medium=web&utm_content=latest-news&utm_campaign=free-homepage

SriLankan Airlines raises US$150mn Islamic credit: Standard Chartered

Standard Chartered said it was the sole structuring bank and lead arranger for the multi-currency senior secured Islamic structured term financing facility.

Sandard Chartered Bank said it had structured a 150 million US dollar equivalent Islamic finance facility for state-run Sri Lankan Airlines which was partly secured by a government guarantee and receivables.

"The proceeds of the facility will be used towards the refinancing of an existing facility and provide additional capital to support the airlines re-fleeting exercise," Colin Pawley, Head of Client Coverage at Standard Chartered commenting said in a statement.

Standard Chartered said it was the sole structuring bank and lead arranger for the multi-currency senior secured Islamic structured term financing facility.

Other participating banks included Abu Dhabi Islamic Bank, Al Hilal Bank, Noor Bank and United Bank Limited.

"We are particularly encouraged by the fact that international banks have come forward to finance the airline by taking into consideration the growth prospects not only of the airline but that of the country," Yasantha Dissanayake, Head of Finance at SriLankan Airlines said.

In 2012 SriLankan raised a 175 million US dollar equivalent facility from Gulf banks.

http://lbr.lk/fullstory.php?nid=201404011501222140

SBP issues sharia governance framework

ISLAMABAD: State Bank of Pakistan (SBP) has published detailed rules on sharia governance, giving scholars greater independence from their banks' managements, ARY News has learnt.

The new governance rules describe the roles and responsibilities of Islamic banks' managements and their sharia scholars, who rule on whether activities and products at the banks follow religious principles.

To serve on a bank's sharia board, scholars must meet elegibility criteria set by the central bank and serve three-year terms which are renewable. They can work at a maximum of three Islamic banks in Pakistan at any one time.

Sharia board decisions are binding on the managements of Islamic banks, while any disputes are to be referred to the central bank's own sharia board for resolution.

Each Islamic bank must have a resident sharia board member to provide day-to-day advice, and this board member can only work with a single Islamic bank in Pakistan.

An external sharia audit of bank activities is required annually, together with a report which must follow a format defined in consultation with the Institute of Chartered Accountants of Pakistan (ICAP).

http://www.arynews.tv/sbp-issues-sharia-governance-framework/

Huge potential for Mideast investors in Indonesian Islamic finance market

Indonesia is the most populous Muslim country in the world, but still has an Islamic finance sector seen by many experts as by far underdeveloped. While Malaysia over the past decades has emerged as the largest Islamic finance market in the region and the world's leading sukuk, or Islamic bonds issuer, Indonesia does not even figure with its current 4.9% asset share of Shariah-compliant banking in the domestic industry compared to Malaysia's 21% and Saudi Arabia's 23%. But the sector is moving into gear now. Islamic banking assets in Indonesia grew by 24.2% to around $21.4bn in 2013, data from Indonesia's financial service authority or Otoritas Jasa Keuangan (OJK) showed.
These assets are handled by the country's 11 Islamic banks and the Islamic windows of 23 conventional financial institutions. And there is reason to believe that the sector will further strengthen. The country's government has embarked on a massive infrastructure drive that would cost around $200bn over the coming years, and not many other financing vehicles such as sukuk are so well-suited to raise enough funds for this mammoth task - a path Malaysia has taken for a long time. However, there are still some obstacles on the way to build up a buoyant Islamic finance market in Indonesia which have very much to do with the regulatory environment the banks are acting in. While the central bank has already set up a framework for Shariah-compliant finance, there are still legal changes required for sukuk to become a viable project financing tool. 

And although the country's banks are well-capitalised, they are reluctant to enter long-tenor financing such as sukuk because it puts pressure on their balance sheets. The other issue is that there is few public and/or political awareness or knowledge about the advantages of Islamic finance in both wholesale and retail banking and a lack of innovative products and tax incentives that would entice bank clients to use Islamic finance instrument to fund real estate or other investments. Despite there are currently more than 160 rural Islamic finance companies such as microlenders and co-operatives and a number of charitable organisations with a demand for asset structuring, there is a lack of financial services that go beyond simple transactions. 

This is astonishing as about 210mn of Indonesia's 240mn population are Muslims, which means a large pool of natural demand for Islamic finance products should be prevalent. "While Islamic finance is only one part of an Islamic economy, it has great potential here," says Imam T Saptono, member of the Indonesian Islamic Banking Association. "This time it could become the driver that creates a more advanced Islamic economy." The Middle East is not only more than willing to tap into an upcoming broader Indonesian sukuk programme, it also finds a large Islamic finance sector to develop in Indonesia through business initiatives, mergers and acquisitions and other ventures, provided the Indonesian government eases certain regulations concerning foreign participation in the banking sector. 

It would only be good for the entire fiscal ecosystem in Indonesia, because apart from infrastructure financing, a larger domestic sukuk market would also help Indonesian corporates reduce their dependency on foreign borrowing which - in turn - could benefit the country's ailing currency. And in the retail finance market, including insurance, there are a lot of opportunities for value creation that yet have to be unlocked.

© Gulf Times 2014

http://www.zawya.com/story/Huge_potential_for_Mideast_investors_in_Indonesian_Islamic_finance_market-ZAWYA20140404042659/

Volume of global Halal products trade estimated at USD2trn

The Islamic Chamber of Commerce and Industry plans to launch a number of initiatives including the "Halal" project and the International Center for Operation and Development to assist in the creation of new jobs, as part of its 2014-2017 strategy.
The chamber is also looking into adopting regulations pertaining to the fund supporting members of the chamber.

The decisions came on the sidelines of the 19th meeting of the Board of Directors of the Islamic Chamber of Commerce and Industry, the 52nd session of the Finance Committee of the Islamic Chamber, and the 30th session of the General Assembly of the Chamber, which concluded recently in Tunisia.

Fahad Al-Rabiah, deputy chairman of the Council of Saudi Chambers, stressed the need for the chamber to issue certificates for Halal products and put in place certain fees to strengthen the role of the chamber.

He estimated the trade volume of halal products worldwide to be worth about two trillion dollars, of which 700 billion dollars is in the Islamic markets.

The vice-president of the Council of Saudi Chambers, who took part in the meeting as head of the Saudi delegation noted to the formation of a sub-committee to discuss the revitalization of the membership and the development of the financial resources of the chamber.

He acknowledged that the economic challenges facing the Arab and Islamic region require the interaction of all countries in the Islamic Chamber to push for Islamic economic cooperation efforts, overcome economic challenges, and address issues of community development in an active manner.

Al-Rabiah also pointed to the importance of the development of the financial resources of the Islamic Chamber to enable it to play its role toward these issues.

He called for the strengthening of economic cooperation between Islamic countries and doubling the volume of trade exchange between them via the spread of greater trade and investment opportunities available in Islamic countries.

For his part, Omar Bahalioh, secretary general of the International Trade Commission, stressed the need to collect dues from member states.

Regular payments or contributions would help meet the expenses of the activities and programs of the chamber in order to help it achieve its objectives in the region.

© Arab News 2014

---

http://www.zawya.com/story/Volume_of_global_Halal_products_trade_estimated_at_USD2trn-ZAWYA20140405033751/ 

Islamic finance set to expand in Arab countries

The new agreement signed by the Jeddah-based Islamic Research & Training Institute (IRTI) and the Alexandria-based Arab Academy for Science and Technology will contribute to expanding Islamic banking and finance in the Arab world, said IRTI Director General Mohd Azmi Omar.
Speaking to Arab News, he emphasized the significance of the deal, saying it involves translation of books in Islamic banking and finance into Arabic. "Most books in the industry are now in English," the director general said.

Omar said the popularity of Islamic banking, which is value-based and production-oriented, is growing rapidly especially after the global financial crisis. "Islamic banks finance productive projects that can boost real economy and do not engage in speculative and unethical business activities," he said.

Asked why many countries are still reluctant to adopt the Islamic system, Omar said there is a lack of knowledge about the system, its benefits and how it functions. The IDB and IRTI have been spearheading a campaign to promote the system by organizing international conferences and seminars, conducting research and publishing books.

According to World Islamic Banking Competitiveness Report 2013 of Ernst & Young's, the global Islamic banking assets jumped from $1.3 trillion in 2011 to $1.8 trillion. The Islamic banking industry continues to record robust growth, with the top 20 Islamic banks registering a growth of 16 percent in the last three years, the report said.

Ismail Abdul Ghaffar Faraj, president of the academy, and IRTI chief Omar signed the agreement in the presence of Ahmed Mohamed Ali, president of Islamic Development Bank Group. It was in line with a memorandum of understanding signed by the IDB and the academy in July 2012.

The two sides will organize joint training courses in Islamic economics, Islamic finance and Islamic banking, Omar said, adding that IRTI would select the trainers for each course in coordination with the academy.

In a statement on the occasion, Faraj said the agreement would strengthen the partnership between his organization and the IDB. "I am happy over the good relations between the two institutions," the academy president said.

The IDB chief said the agreement would help the bank promote Islamic banking and finance in the member countries of Arab League, which are also members of the IDB. An affiliate of the Arab League, the academy is specialized in maritime transport. It was established in 1972.

© Arab News 2014

http://www.zawya.com/story/Islamic_finance_set_to_expand_in_Arab_countries-ZAWYA20140408031905/

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KSA willing to invest in Italy halal market

Saudi Arabia is willing to invest in Italy, which it wants to see become the hub of the halal market in the Mediterranean, according to Fahad Alared, a Saudi member of the Committee for Islamization of Banks.

“We have signed a protocol agreement with the government agency of Malaysia for the development of the halal market (and) for the birth of the ‘Italy Halal Club’,” Alared was quoted by Gazette del Sud as saying this week.

Alared was the Kingdom’s representative to the 57-member Organization of Islamic Conference (OIC) attending the World Halal Food Council meeting in Rome on March 31. The meeting was organized by the Italian section of the Halal International Authority (HIA).

He added that “In this way, Malaysia, the largest halal market in the world, will make its experience available to Italy, which will become the leading halal hub in Europe, serving countries of the Mediterranean, Southeast Asia, the Balkans and the European countries.”

The OIC representatives said that marketing of certified products that follow halal food standards, prepared according to Islamic tradition, could become a significant factor in the Italian economy and make the country a “halal hub.” Islamic finance and capital are ready to pull Europe and Italy in particular out of crisis, the participants in the meeting said.

The global halal market is worth 13 trillion euros, growing at an annual rate of 15 percent, the event organizers said.

The stipulation for Italy is that food standards must follow halal, or “conformance” standards in production, logistics and commercialization that are consistent with the precepts of Shariah. Development would be based on “Islamic financing, which prohibits the application of interest, investment through equity partnerships and the acquisition of company shares” with direct action “in failing companies also.” “Interested sectors range from food to clothing to tourism to medicine, cosmetics, and body treatments.

Among the 270 Italian companies that are already halal-certified many have seen production ‘grow to the point of not being able to keep up with orders coming from Southeast Asia,” Alared said.

(ARAB NEWS)

http://www.amilin.tv/news/ksa-willing-to-invest-in-italy-halal-market/

Bank Nizwa: Islamic banking needs time to grow in Oman

By Khalid Al-Bohairy

Islamic banking in Oman is growing at a slower pace than expected and requires new legislation and stronger public awareness of the industry to flourish, Bank Nizwa CEO Jamil El Jaroudi told Zawya.

"The expectations were for a faster launch and bigger scale, but expectations do not always reflect the reality of challenges and possibilities. But this does not mean that the market in the Sultanate is not ripe for growth, it will just take time," Jaroudi said.

"We are working hard to help in tackling deterrents to growth such as lack of understanding about the principles and applications of Islamic banking among the public, although many want to carry out transactions in line with shariah law, and there is also a skills shortage in the Omani market," he added.

Jaroudi said the legal and regulatory framework in Oman supported the launch of the Islamic banking industry but that further development of legislature was needed for the sector to mature.

Bank Nizwa, Oman's first independent Islamic bank, started operations in January 2013 and has a paid-up capital of OMR 150 million (USD 390 million). The bank raised OMR 60 million in an initial public offering of 40% of its shares in May 2013.

Jaroudi said the bank had no plans to issue new sukuk, or Islamic bonds.

"We were the first to offer sukuk in Oman in the second half of 2013, despite being new in the market... Instruments should only be released when needed and when the money can be employed as quickly as required to provide revenues and returns for investors."

He said the bank planned to launch Internet banking services and other shariah-compliant products.

© Zawya 2014

http://www.zawya.com/story/Slow_start_for_Omani_Islamic_banking-ZAWYA20140331104018/

Volume of global Halal products trade estimated at USD2trn

The Islamic Chamber of Commerce and Industry plans to launch a number of initiatives including the "Halal" project and the International Center for Operation and Development to assist in the creation of new jobs, as part of its 2014-2017 strategy.
The chamber is also looking into adopting regulations pertaining to the fund supporting members of the chamber.

The decisions came on the sidelines of the 19th meeting of the Board of Directors of the Islamic Chamber of Commerce and Industry, the 52nd session of the Finance Committee of the Islamic Chamber, and the 30th session of the General Assembly of the Chamber, which concluded recently in Tunisia.

Fahad Al-Rabiah, deputy chairman of the Council of Saudi Chambers, stressed the need for the chamber to issue certificates for Halal products and put in place certain fees to strengthen the role of the chamber.

He estimated the trade volume of halal products worldwide to be worth about two trillion dollars, of which 700 billion dollars is in the Islamic markets.

The vice-president of the Council of Saudi Chambers, who took part in the meeting as head of the Saudi delegation noted to the formation of a sub-committee to discuss the revitalization of the membership and the development of the financial resources of the chamber.

He acknowledged that the economic challenges facing the Arab and Islamic region require the interaction of all countries in the Islamic Chamber to push for Islamic economic cooperation efforts, overcome economic challenges, and address issues of community development in an active manner.

Al-Rabiah also pointed to the importance of the development of the financial resources of the Islamic Chamber to enable it to play its role toward these issues.

He called for the strengthening of economic cooperation between Islamic countries and doubling the volume of trade exchange between them via the spread of greater trade and investment opportunities available in Islamic countries.

For his part, Omar Bahalioh, secretary general of the International Trade Commission, stressed the need to collect dues from member states.

Regular payments or contributions would help meet the expenses of the activities and programs of the chamber in order to help it achieve its objectives in the region.

http://www.zawya.com/story/Volume_of_global_Halal_products_trade_estimated_at_USD2trn-ZAWYA20140405033751/

KSA set to host sukuk forum amid infrastructure upswing

Sukuk could unlock financing for the region's $1 trillion worth of infrastructure projects, as the Kingdom of Saudi Arabia drives innovation in Islamic finance to support its development needs, according to senior experts set to gather for one of the region's most important finance events.
The Euromoney Saudi Arabia Conference will provide a platform for key players in Islamic finance and infrastructure - including NCB, the Saudi Kuwait Finance House, ACWA Power, HSBC Saudi Arabia and Bechtel - to discuss the Saudi Arabian government's priorities and strategic direction, and the roles of international investors, contractors, and public-private partnerships in funding infrastructure investment. 

Co-hosted with the Saudi Ministry of Finance, the 9th Euromoney Saudi Arabic Conference will be held under the theme of "Innovation, Competition, and the Changing Dynamics of Globalization," and will run on May 6-7, 2014.

The region is facing rapid population growth and urbanization, with the United Nations projecting that the GCC's urban population will increase by 36 percent from 36.4 million in 2010 to 49.4 million in 2025. In response, countries in the GCC and other MENA countries like Iraq are investing $1 trillion in 117 major infrastructure projects across construction, utilities, transportation and logistics sectors, which are set to be completed by 2030 according to a report from EC Harris.

The Kingdom of Saudi Arabia, with the GCC's largest population and economy, has $375 billion worth of infrastructure projects in the pipeline. To finance these massive projects, the Kingdom is increasingly turning to Shariah-compliant Islamic finance, such as sukuk, in part due to the lower levels of risk and more predictable rates of return.

Richard Banks, Regional Director, Euromoney Conferences, said: "The MENA region will need to raise significant funds to meet its infrastructure needs in the coming years, and Islamic finance will play a key role in enabling governments to do this. As both a major issuer of sukuk, and also a nation that is committed to infrastructure investment, the Kingdom of Saudi Arabia is an ideal host for serious discussions on the role of Islamic finance in this area." 

"We are bringing global experts together with senior executives with practical experience within the Kingdom to discuss the issues surrounding sukuk and examine the road ahead for projects and Islamic finance," he added. 

Total global sukuk issued is set to grow from $130 billion in 2014 to $237 billion in 2018. Leading MENA, the Kingdom of Saudi Arabia issued $8.69 billion worth of sukuk in the first nine months of 2013.

One key point of discussion will be the public-private partnership funding model for the Riyadh Public Transport Project, one of the world's largest public transport systems under development. The Riyadh Public Transport Project is slated to cost $22.5 billion, including 176.5 km of rail and 85 stations, according to the Ar-Riyadh Development Authority.

Bechtel, the United States-based engineering, construction, and project management firm, led a consortium that won a $9.4 billion contract to design and build two of the Riyadh Public Transport Project's lines, totaling 63.3 km. Executives from the company will take part in panels during the conference, outlining how public-private partnerships are playing a key role in infrastructure investment and sharing their experiences on the project to date. 

The 9th Euromoney Saudi Arabia Conference is the longest-running, largest and most influential financial conference in the Kingdom. It will take place at the Al Faisaliah Hotel in Riyadh, and is expected to attract more than 1,200 delegates from all over the region and the world.

© The Saudi Gazette 2014
http://www.zawya.com/story/KSA_set_to_host_sukuk_forum_amid_infrastructure_upswing-ZAWYA20140406041126/

Commercial Bank of Kuwait to convert to Islamic banking

Commercial Bank of Kuwait, the Gulf state's fifth largest lender by assets, said a majority of shareholders had approved a plan to convert the bank into a full-fledged Islamic lender, state news agency KUNA reported.

The bank's chairman Ali Mousa Al Mousa was quoted as saying on Wednesday that 85 percent of shareholders had approved the move, adding that the measure would still require further approvals.

"The decision does not take immediate effect - it is just a first step in a legal process involving several studies and approvals."

The bank also said it had received approval to raise 120 million dinars ($426 million) through the sale of subordinated bonds to help in its expansion plans.

The bank's assets rose 7.1 percent last year, reaching 3.9 billion dinars for the 2013 financial year.

($1 = 0.2817 Kuwaiti dinars) (Reporting by Bernardo Vizcaino; Editing by Andrew Torchia)

http://in.reuters.com/article/2014/04/03/islamic-finance-kuwait-idINL5N0MV0XN20140403

Call for dialogue to enhance reach of Islamic finance

Those with limited knowledge but some awareness of the subject of Islamic finance would have learned much from a conference held recently in Lahore, a global forum organised jointly by COMSATS institute of information technology and its partner university in Lancaster, UK.

Certainly, my own modest understanding, based on a mixture of exposures in banking, then subsequently media and research, was aided by the insights of delegates from academia, practising institutions and advisory bodies.

At the same time, it was clear that key issues persist for participants seeking to spread recognition of the sector, its foundations, and its scope to offer a worthy and viable alternative to conventional banking, whose operational and ethical weaknesses became notoriously exposed in the global financial crisis.

In particular, several noted the industry’s potential for supporting the unbanked, poorer groups in society, and SMEs. Microfinance has become an increasingly established theme in this regard. Equally, certain panellists spoke of the need to clarify confusions still as to how the Islamic economy should operate and develop its appeal.

Collaboration

The event, the second in an annual series, benefited not only from the extensive range of representatives and their variety of experience and offered topics, but from one further and critical factor — namely the exchange and confluence of ideas from different segments of the sector, whether researchers, or regulators, or from the world of business.

Any opportunity for dialogue between such parties, with the chance of complementary perspectives, surely has to be welcomed, with their interaction helping to resolve the inhibitions still curbing Islamic finance’s adoption in broader markets. Indeed, collaboration was a keyword filtered into the assembly, not least because of the sheer scale of the opportunities among a range of audiences and customers around the globe.

While a Gulf readership would be well aware of the various centres within and beyond this region — seeking either to claim a niche in the Islamic finance industry or, in the case of Dubai, to offer an all-encompassing platform for both financial and non-financial endeavours — some may not be so aware of Pakistan’s story in this field, as a country with the world’s second largest Muslim population.

Having previously made only modest ground in establishing Islamic finance in the 1990s, Pakistan has since emerged as one of the nations looking to embrace the tenets of Sharia-compliant banking and finance, not only for its nurturing at home, but to be among the community that may coalesce to give it critical mass internationally as well.

Testimonies

Given the relatively delayed efforts locally to promote the Islamic finance sector — now embraced in tandem by government and the central bank — a number of those attending this global forum gave learned and often heartfelt testimonies on how the industry has to put itself forward to gain due attention, advertising underlying principles to distinguish the merits of risk-sharing by contrast with the speculative excesses witnessed in conventional banking.

Indeed, while some of the ideas shared were viewing the issues conceptually, most were concerned with the strategic steps the industry has to take to gain a stronger foothold on the world stage.

For instance, one speaker referred to “co-operation and generosity” on the one hand, as founding precepts to follow, as against the “competition and greed” that seems to have characterised traditional banking in the West. In response, another argued from the podium that, in terms of aligning with customer-centric service, it is not competition per se that is the trouble, but the necessities of transparency and fairness.

In making that case, Khalid Al Fakih, CEO of Bahrain-based AAIOFI, further emphasised the importance of trust and confidence in any system, of securing the basis for financial stability, of underlining the linkages between Islamic economic sectors, and of the abiding protection of consumers.

Relatedly, as regards regulation, the argument was put during discussion that Islamic finance needs to function on a level playing-field with its conventional counterpart, and potential users of its products and services be educated as to the availability of choice.

Better branding

That observation brought one prominent theme to the fore; in the words of one experienced banker that Islamic finance “has to market and brand itself better”. That might be a twofold project, insofar as it requires Sharia-compliant bankers to capture the attention of potential customers in the market, but also that the responsible authorities provide the enabling legal, infrastructural environment.

That being so, a Malaysian official observed that governments have to lead the way, and, in so doing, would best serve the sector’s aspirations by putting national pride aside.

With the relevance of globalised trade and standards taken as read, that call to coordination was not only impassioned at this particular gathering, but has become a recurrent and resonant note among interested parties from one event to the next. The forum itself was a cross-border exercise. Thus is awareness enhanced and its coherence encouraged and amplified.

The author is a freelance writer and visiting fellow of Lancaster University, UK.

By Andrew Shouler Financial Correspondent

Gulf News 2014. All rights reserved.

http://www.zawya.com/story/Call_for_dialogue_to_enhance_reach_of_Islamic_finance-GN_29032014_300321/#utm_source=zawya&utm_medium=web&utm_content=latest-news&utm_campaign=free-homepage

KFH stresses importance of Islamic banking

Acting Chief Executive Officer at Kuwait Finance House ( KFH ), Anwar Bader Al Ghaith, stressed the importance of Islamic banking locally and globally as it is one of the significant choices for future economic development. He added that many conventional banks be it regional or global are seeking financial alternatives abide by sharia principles, moreover, several of them have transformed to operate as per sharia or acquired sharia compliant banks. He emphasized KFH 's role in leading the Islamic banking worldwide where KFH has become a model example being taught in the most prestigious universities in terms of its expansions, volume of products and services it provides, not to mention the subsidiaries and the pioneering position among banks that operate as per sharia.

Al-Ghaith added, in his meeting with a delegation of the European Parliament held at KFH 's headquarters in the presence of Strategy and Corporate Affairs General Manager Fahad Al-Mukhaizeem that KFH managed to prove its continuous success as the leading Islamic bank. Furthermore, it proved that Islamic banking is considered as more feasible and sustainable in future. He went on to say that Islamic banks' goals are not only to invest and post profits, but also to achieve the comprehensive development and boost the economy by assuming the social responsibility.

He shared that Islamic banking can solidly face challenges and obstacles as it is resilient and can adapt easily to the market developments. He highlighted the role of the Group banks in achieving positive results in spite of the unfavorable circumstances in some region. The good results are due to the plotted strategies, policies and sharia principles. He said that KFH is always keen to innovating new products and services in addition to seizing overseas investment opportunities to maintain the leading status of the bank. Al-Ghaith affirmed that KFH is committed to assuming the social responsibility as it is part of sharia provisions that the bank operates according to. He explained thatKFH is the first Islamic bank that released a CSR report which enhances the role the bank plays in all social fields; environment, health, sports and education.

http://www.zawya.com/story/KFH_stresses_importance_of_Islamic_banking-ZAWYA20140330045249/#utm_source=zawya&utm_medium=web&utm_content=latest-news&utm_campaign=free-homepage