ifp - july and august 2013

7/27/2019 IFP - July and August 2013

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Islamic FinancePakistanIslamic Finance IndustryNewsletter

Volume 4, Issue 6, July and August 2013


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EditorialIslamic finance industry has grown rapidly within the last few years and it

seems that growth rate will further increase in the coming years. In the

past few years, overall market growth has been estimated at between 15-20 % annually.

Islamic finance is also on the rise in emerging markets such as Lebanon,

Syria, Turkey and Canada. Within a short span, it has been recognized in as

an alternate to conventional banking, although there are issues in Islamic

banking which are being dealt by the regulators. For instance, in UK, due to

its tax laws Sukuk badly suffered, but when changes were made in tax

laws, U.K. Sukuk issuance looked like a valid financing option to be

explored by businesses which seek Shariah compliant solution.

According to Global Islamic Finance Report 2012, the size of the Islamicbanking industry has grown to $1.35 trillion with the annual growth rate of

more than 20 %. Globally the Islamic financial industry now comprises 430

Islamic banks and financial institutions and around 191 conventional banks

with Islamic banking windows operating in more than 75 countries. The

share of Islamic banking in Pakistan has reached 8.2 % in assets and 8.9 %

in deposits of the total banking industry.

However, everything is not as perfect as it appears. A recent fraud scam

has shook the confidence of masses in the Islamic finance market when an

unregistered Modaraba company defrauded many investors who trusted

the company due to their religious sentiments.

The need of the time is to create awareness among the masses to develop

their understanding with respect to Islamic finance so that they be able to

determine appropriate and credible avenues to invest their hard earned

money into Shariah compliant avenues.

Regulators for all relevant financial institutions should step in and take

rigorous actions against all who are involved in defrauding people in the

name of Islamic finance and hence protect the market from any defame.

Happy Reading !

Advisory Board

Mufti Irshad Ahmed Aijaz

Mufti Najeeb Khan

Anwar Ahmed Meenai

Mohammad Aslam

Mujeeb Baig

Faizan Memon

Syed Abdul Rafay Ather

Associate Editors

Shakil Khan

Muhammad Shahzad Hussain

Arshad Hussain Zubairi

Rima Farooq

Editor-in-Chief

Nusrat Ullah Khan

Ayat of Month:

Wealth and children are theembellishment of the worldly life, and the

everlasting virtues are better with your

Lord, both in rewards and in creating good

hopes. [Alkahf: 46]

Hadith of Month:Narrated by Abu Huraira the Prophet

(sallahu alaihe wasallam) said, "Whoever

takes the money of the people with the

intention of repaying it, Allah will repay it

on his behalf and whoever takes it in order

to spoil it, then Allah will spoil him."

[Sahih al-Bukhari, Volume 3, Book 41, No

572]

IFP is an initiative of IFP Forum and Hidaya Islamic Business Support Services Pvt. Limited (IBSS)


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News Story

Mr. Saleem Ullah, Head of State Bank of Pakistan Islamic Banking

Division (SBP-IBD) announced, in the Second Islamic Expo and Conference

2013 held at Marriott Hotel in June 2013, that SBP has taken initiative in

collaboration with the existing Islamic banks in the market to promote

Islamic banking on the electronic media.

This marketing strategy will help in achieving the targeted 15% market

share of Islamic finance in overall banking industry in Pakistan and todouble the number of branches network from 1,000 to 2,000 across the

country.

Mr. Saleem Ullah urged for the joint national level effort for the

promotion of Islamic banking in Pakistan. In this regard he said Islamic

banking should be a part of national agenda to promote Shariah based

financial system in the economy having potential to develop the economy

and for the prosperity of the people.

The initiative will not only create awareness about Islamic banking but it

will also educate the general public about basic terms and principles of

Islamic finance because when spreading awareness of Islamic finance, it is

important to educate the customers. They will be more willing to emerge

themselves into Islamic finance if they have the knowledge.

However, it is highly important that appropriate methods are used for

marketing Islamic finance products so that the marketing tools do not

damage the Shariah image of the products.

The players in the industry need to be very careful in selecting the

marketing strategy as it is one of the most important areas that needs to

be carefully examined by the policy makers of Islamic banks. The

terminology used should be easy enough to be comprehended by the

general public.

Care should also be taken when selecting marketing statements, symbols

and images.

A sound marketing strategy becomes imperative as Islamic banks not only

operate in an environment where service quality and financial returns are

perceived as the essential criteria from customers viewpoint, but they

must also compete with conventional banks which are known to have

better experience and expertise in the banking business.

Islamic banking

should be a part of

national agenda to

promote Shariah-based

financial system in the

economy having

potential to develop

the economy and

prosperity of the

people

Mr. Saleem Ullah -

Head of SBP-IBD

IFP is an initiative of IFP Forum and Hidaya Islamic Business Support Services Pvt. Limited (IBSS)

The Need for Advertisement of Islamic Banking on

Electronic Media


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Islamic Finance Expo and Conference 2013

(Contd)

The primary objective of the event

was to create awareness about Islamic

Finance industry and to clarify the

doubts people have in relation to

Shariah based financial institutions.

The event showcased all the major

industry players with their products

and services to learn more about the

offerings for the masses of Pakistan.

The event included an Expo and a

Conference on different aspects of

Islamic Finance such as discussion on

current issues in Islamic bankingindustry. On the first day, various

Islamic banks, Takaful companies

and even different universities

arranged their stalls and their

representatives guided about their

various products to the visitors who

were interested in Islamic Finance

expo and conference. They

enlightened participants about the

potential of Islamic banking and its

benefits over conventional banking.

Moreover, they also underlined the

need for awareness of Islamic

banking and Takaful services acrossPakistan.

Experts present on Meet with the experts session on 20 June 2013

Inaugural session began with recitation of Holy Quran by Mufti Zeeshan Abdullah and Guest of honor speech by Mr.

Majeed Aziz (former president KCCI) and Qazi Abdul Samad (Shariah Advisor The Bank of Khyber).

Inauguration of Islamic finance expo

and conference by Organizers and

Karachi Chamber of Commerce andIndustrys (KCCIs) representatives.

Session 1

Vision 2020

Session 2

Islamic Banking -is it really

Islamic?

Session 3

Introduction toTakaful and

Family Takaful

Session 4

Islamic bankingintroduction and

criticism

Session 5

Role ofMudaraba in

Islamic finance

Session 6

Open housediscussion

Mr. Muhammad

Naeem, Chief

Executive

Publicity Channel.

Mr. Mehmood

Tareen, Director

IFEC.

Mr. Ateeq ur

Rehman, Advisor

to KCCI,

Qazi Abdul

Samad, Shariah

Advisor BOK.

Mufti Zeeshan

Abdullah.

Mr. Majeed Aziz,

President KCCI.

Qasar Waheed,

Chairman PPMLA.

Moderator:

Mr. Faizan

Memon, HBL

Panelists:

Mr. Irfan,

Mufti Sabir,

Mufti Ehsan

Waqar.

Panelists:

Mr. Azeem

Pirani,

Mufti Ibrahim

Essa.

Moderator:

Shakil Khan,

Hidaya IBSS.

Panelists:

Mufti Yahya

Asim, Shariah

Advisor HabibBank Limited,

Mufti Zahid Siraj,

Head of Shariah

Department Burj

Bank Limited and

Mufti Ibrahim

Essa.

Panelists:

Mufti Satar

Laghari, Shariah

Advisor NBP,

Mr. Zulfiqar, Bank

Islamic Pakistan

Limited and

Mr. Mujeeb Baig,

Head of product

development

MCB.

Moderator:

Mr. Asif

Amanullah.

Panelist:

Mr. Abdul Jabber

Karimi, Head of

productdevelopment

HMB,

Mufti Abdullah

Najeeb, Shariah

Advisor Al-Baraka

Bank and

Mufti Mubeen

HMB.


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Islamic Finance Expo and Conference 2013

(Contd)

Experts present on Meet with the experts session on 21 June 2013

Inaugural session began with recitation of Holy Quran by Mufti Zeeshan Abdullah and Guest of honor speech by Mr.Ebrahim Sidat (Country Managing Partner Ernst & Young Pakistan) and Mr. Nusratullah Khan (Head of Islamic banking

UBL)

Session 1

Experience of a

decade

Session 2

Speech by HIBD

of State Bank of

Pakistan

Session 3

Presentation -

Growth and

future outlook of

Takaful industry

in Pakistan

Session 4

Presentation -

Growth of

Islamic Mutual

Funds and future

outlook

Session 5

Critical eye on

Islamic finance

Session 6

Islamic banking

and finance

outlook in

current

economic

situation

Session

chairman:

Mr. Saleem Ullah,

HIBD SBP.

Moderator:

Mr. Abdur Rab

Khan, Head of

Hidaya IBSS.

Panelists:

Mr. Muhammad

Zubair Haider

Shaikh, Group

Chief IBD NBP,

Mr. Rizwan Atta,

Head of IBD, UBL

Ameen,

Mr. MuhammadRaza, Head Retail

and Marketing,

Meezan Bank

Limited,

Qazi Abdul

Samad, Shariah

Advisor, BOK and

Mr.Fawad

Farooq, HIBD

Faysal Bank.

Speech given by

Mr. Saleem Ullah,

HIBD SBP.

Presentation

given by Mr.

Saleem Qureshi,

General Manager

Pak Qatar Family

Takaful

Company.

Presentation

given by Mr.

Faraz, Chief

Executive of

Fortune Islamic

Services.

Moderator:

Laeeq ur

Rehman, Unit

Head of Takaful

Bank Islami.

Panelist:

Mr. Mujeeb Beig,

Head productdevelopment,

MCB IBD,

Mufti Najeeb,

Shariah Advisor

Summit Bank

Limited,

Mufti Ibrahim

Essa,

Mr. Aziz Adil, CFO

Summit Bank

Limited,

Mr. Ahmed Ali

Siddiqui, Head of

product and

compliance,

Meezan Bank and

Mufti Khalil

Aazmi, Bank

Alfalah.

Panelists:

Mr. Shamim

Ferpo, Senior

Vice President

KCCI,

Mr. Mehmood

Tareen, Project

Director IFEC,

Mr. Ateeq ur

Rehman, Advisor

to KCCI for

banking, CSR,

insurance and

investments,

Mr. Anees

Asghar, Director

of Capital

Management,Dubai,

Mr. Abdur Rab

Khan, Head of

Hidaya IBSS and

Mr. Naeem

Qureshi, Chief

Executive of

Publicity

Channel.


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JPMorgan recommend clients to

purchase Nakheel Islamic bonds

QIB profit reached QR 630 Million

during first half of 2013Qatar Islamic Bank (QIB), Qatar's

leading Islamic financial institution,

has announced the second quarter

2013 results.

Total assets of the Bank now stand

at QAR 74 billion having increased

by 17.2% compared to second

quarter 2012. Financing activities

have strongly rebounded in the

second quarter to reach QAR 41.4billion having grown 9% compared

to March 2013 and 15.6% growth

compared to June 2012.

Indonesias BMT microfinance

system should be introduced

globally

Baittul Maal wa Tamwil (BMT)

microfinance system which is being

working in Indonesia should be

introduced all-around the globe as a

best system to eliminate poverty

which will boost-up Islamic

microfinance industry worldwide.

These thoughts were expressed by

Chief Executive Officer of Al-Huda

Center of Islamic Banking and

Economics Mr. Muhammad Zubair

Mughal.

Islamic finance in 2013: beyond

the growth

The Islamic finance industry posts

stellar growth figures. With its

estimated 15% to 20% annual

growth rate considerably out

weighting the growth seen in the

conventional banking industry.

Global Islamic assets held by

commercial banks stood at $1.3bn

in 2011, but the industrys forecast

growth of around 40% over two

years will see this figure rise to

$1.8bn in 2013, according toresearch by Ernst & Young.

Money market gets a boost as

rules allow global Shariah

compliant deals

Global standards for agency

contracts will help the fragmented

$1.6 trillion Islamic finance industry

develop international money

markets, according to Asian Finance

Bank Bhd. and CIMB Group

Holdings Bhd.

The International Islamic Financial

Market, a Bahrain-based standards

setting body, issued the guidelinesto broaden the range of tools for

Shariah lenders to manage excess

funds, Chief Executive Officer Ijlal

Ahmed Alvi told the conference.

The rules govern Wakala contracts,

where the bank acts as an agent for

a client looking to invest funds and

profits are shared to comply with

t h e S h a r i a h c o m p l i a n t

requirements.

Harmonization of standards will

avoid different schools of thought

blocking the expansion of banks

across jur isdict ions, said

Muhammad Akram Laldin, a

Shariah scholar with Malaysias

central bank.

Disclaimer:The news included here is on the basis of information obtained from local and international print and

electronic media sources. IFP and Hidaya IBSS team does not accept any responsibility about their bona-fide.

JPMorgan Chase & Co. is advising

clients to buy Nakheel PJSCs

Islamic bonds after last months

record slump as new projects boost

the Dubai developers earnings,

while government backing makes a

default improbable.

State-run Nakheels 4.27 billion

dirhams ($1.2 billion) of Sukuk

yielded 9.88 percent in Dubai,down seven basis points during

July, after surging 179 basis points

in June.

GlobalNews

Global standards urge to boost Islamic finance

Islamic finance experts have flagged the urgent need for harmonious international industry standards and cross-

border co-ordination and collaboration. According to CIMB Islamic Bank Berhads Chief Executive, Badlisyah Abdul

Ghani, in this phase of growing international transactions, Islamic finance needs to be dynamic and innovative.
http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2973http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2973http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2973http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2968http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2968http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2968http://topics.bloomberg.com/islamic-finance/http://topics.bloomberg.com/islamic-finance/http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2968http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2968http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2968http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2973http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2973


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Australia seeks tax changes on

Sukuk

HSBC sees 2013 Sukuk sales

doubling to $3 Billion: Turkey

Credit

Islamic bond sales in Turkey may

double to $3 billion this year as

companies join the government in

accessing Shariah-compliant

investors, according to HSBC

Holdings PLC, the worlds biggest

underwriter of Sukuk.

Economic growth may help propel

Islamic bond sales beyond the

government and banks this year,Martin Spurling, Chief Executive

officer of HSBCs Turkey unit, said

at a conference in Istanbul.

Pilgrim funds give Indonesian

banks Booster Shot

Indonesias plan to shift 11 trillion

Rupiah ($1.1 billion) of pilgrims

savings into Shariah compliant

lenders is a booster-shot that will

help narrow the gap with

neighboring Malaysia.

Shariah banking assets in Indonesia

jumped 35 percent in the year

through February and the

government wants to lift its marketshare from 4.6 percent to 10

percent by 2015.

London Mayor sees plenty of

opportunities for Islamic finance

London Mayor Boris Johnson calledfor a greater U.K. role in the Islamic

finance market as a Malaysian

delegation visited the capital city.

The London Stock Exchange listed

$24 billion of Sukuk in the past two

years, Johnson said in his office at a

meeting with Malaysian Prime

Minister Najib Razak. The capital

should be at the heart of the Islamic

finance market, which is set to grow

to $1.6 trillion by 2015, he said.

Oman's Bank Nizwa obtains

investment banking license

Bank Nizwa, Oman's first fullfledged Islamic bank, has received

an investment banking license that

will allow it to manage funds and

issue instruments such as Islamic

bonds, the lender said in a bourse

filing.

The bank launched operations in

January and is gradually rolling out

a range of Shariah compliant

products, aiming to grab a 5

percent share of the country'soverall banking market in five years.

Islamic finance industry enters

2013 with new strength

The volume of Sukuk (Islamicbonds) issued by end of the first

quarter of 2013 reached $34.2

billion, increasing on a quarterly

based rate at 21.5 percent, after an

abundant year that witnessed a 54

percent increase in issuance,

Kuwait Finance House (KFH).



Australia plans to change laws to

ensure Islamic finance products are

taxed fairly as the government

seeks to attract investors from the

Middle East and Asia, paving the

way for Sukuk sales.

The national taxation board will

hold talks in Sydney, Canberra and

Melbourne on how to best ensure

that Islamic finance transactionsare treated the same as equivalent

non-Islamic deals.

GlobalNews

Islamic Finance is as British as Fish and Chips and the FA Cup Final says Lord Mayor of London

Beyond the talk of proliferating market size, volume of issuances outstanding and innovative new structures and

underlying assets, the global Sukuk market is poised to take that great leap forward to a new higher level. Emerging

Sukuk models, such as that of the International Islamic Liquidity Management Corporation, for instance, serve not

only to enhance financial stability by facilitating liquidity management for international Islamic financial services,

but also to cater for economic development and debt management.
http://topics.bloomberg.com/turkey/http://www.bloomberg.com/quote/HSBA:LNhttp://www.bloomberg.com/quote/HSBA:LNhttp://www.bloomberg.com/quote/HSBA:LNhttp://topics.bloomberg.com/indonesia/http://topics.bloomberg.com/malaysia/http://topics.bloomberg.com/boris-johnson/http://topics.bloomberg.com/islamic-finance/http://topics.bloomberg.com/islamic-finance/http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2966http://www.globalislamicfinancemagazine.com/?com=news_list&nid=2966http://topics.bloomberg.com/islamic-finance/http://topics.bloomberg.com/islamic-finance/http://topics.bloomberg.com/boris-johnson/http://topics.bloomberg.com/malaysia/http://topics.bloomberg.com/indonesia/http://www.bloomberg.com/quote/HSBA:LNhttp://www.bloomberg.com/quote/HSBA:LNhttp://topics.bloomberg.com/turkey/


11/17

11

Dubai to launch global Islamic

economy summit

Dubai Financial Group sells its

stake in Bank Islam to BIMB

Holdings

Dubai Group, a diversified financial

services company, announced that

its subsidiary Dubai Financial Group

LLC, has signed an agreement with

BIMB Holdings, concerning the sale

of DFGs 30.5 per cent stake in Bank

Islam.

The sale transaction, which

concluded on July 31, was valued at

$550 million.

Cagamas issues 3 year variable

rate Sukuk in Malaysia

T h e N a t i o n a l M o r t g a g e

Corporation, announced the

successful RM 230 million issuance

of its award winning variable rate

Sukuk Commodity Murabaha along

with RM 180 million floating rate

Conventional Medium Term Notes.

The variable rate Sukuk and floating

rate CMTNs will be issued via its

existing RM 60 billion IslamicCommercial Paper and Medium

Term Notes Programme in tenures

of 3 years.

Cagamas Berhad (Cagamas), the

National Mortgage Corporation,

was established in 1986 to promote

the broader spread of house

ownership and growth of the

secondary mortgage market in

Malaysia.

It issues debt securities to finance

the purchase of housing loans from

financial institutions and non-

financial institutions. The Cagamas

model is well regarded by the

World Bank as the most successful

secondary mortgage liquidity

facility.

Emirates mulls Sukuk for $4.5

billion in airplanes

Emirates, the worlds biggest airline

by international passenger traffic, is

considering the sale of Islamic

bonds as it seeks to raise $4.5

billion in the financial year starting

April 2014 to pay for planes.

The Dubai based carrier will need

an average of $5.34 billion a year

over the next five years, including

2013, to finance 119 aircraft

deliveries.

Bank Negara Malaysia and Hong

Kong Monetary Authority

strengthen links

Bank Negara Malaysia (BNM) and

Hong Kong Monetary Authority

(HKMA) held a bilateral meeting in

Kuala Lumpur to discuss economic

and financial issues and to consider

initiatives that help promote

financial market development in

Malaysia and Hong Kong.



The Dubai Chamber of Commerce

and Industry will launch the first

Global Islamic Economy Summit in

November. The conference is

aimed at bringing together leading

thinkers and policy makers from

around the world.

The summit will be organized in

partnership with Thomson Reuters

and will initiate dialogue on thedevelopment of integrated sectors

of the Islamic economy, covering

Islamic financial services and Halal

manufacturing.

GlobalNews

Successful issuance of Brunei Darussalam Government short-term Sukuk Al-Ijarah Securities

Bandar Seri Begawan, Brunei Darussalam (August 2013) - The Autoriti Monetari Brunei Darussalam (AMBD), agent

to the Government of His Majesty The Sultan and Yang Di-Pertuan of Brunei Darussalam in managing and

administering Sukuk Al-Ijarah issuances, is pleased to announce the successful pricing of its 92nd issuance of short-

term Sukuk Al-Ijarah securities. With this issuance, the Brunei Government has thus issued over B$6.03 billion worth

of short-term Sukuk Al-Ijarah securities since the maiden offering on 6th April 2006.


12/17

12

Nigeria is opening up to Islamic

finance

Noor Islamic Banks CEO calls for

global body to regulate Islamic

finance industryStandardization of the regulations

governing Islamic finance is a must

to ensure the globalization of

Islamic finance, according to

Hussain Al Qemzi, CEO of Noor

Investment Group and CEO of Noor

Islamic Bank.

Speaking at a DIFC hosted

conference on the future of Islamic

finance, jointly organized by Noorand Thomson Reuters, Al Qemzi

said the lack of standardization is

holding back the growth of Islamic

finance.

Atlantic Lux sets up $100m

insurance linked Sukuk program,

eyes $20m debut

Luxembourg based Atlantic Lux has

setup a $100m life insurance-linked

Sukuk program

The Salam III Limited programme is

a $100m insurance-linked Sukuk,

according to Fitch Ratings who have

reviewed the deal and assigned an

expected rating. A first $20m

tranche issuance is currently

planned to be issued in Septemberand will see Atlantic Lux transfer

the policy holder lapse risk

associated with a defined block of

in-force life insurance policies

through securitization as a tranche

of notes to be sold to investors.

RAM Ratings assigns final ratings

to Axis REIT Sukuk's second issue

RAM Ratings has assigned thefollowing final ratings to Axis REIT

Sukuks proposed Second Sukuk

Issue, to be issued under its MYR

300 million Nominal Value Islamic

Medium-Term Notes Programme.

Under the transaction structure, the

REIT Trustee will sell the Properties

to the Issuer, who will in turn, sell

them back to the REIT Trustee. The

sale price will be paid on a deferred

basis, funded via rental receipts

from the properties.

Jeddah-based Al khabeer Capitalsays it plans to broaden its

investments around the Gulf and

seek a listing on the Saudi stock

exchange, underscoring an

improvement of investor sentiment

in the region.

They are expanding their range of

Shariah compliant investments,

catering to clients' appetite for both

regional and Western markets,

according to Al khabeer's CIO.

CBB Sukuk Al-Ijarah

oversubscribed 270 per cent

The Central Bank of Bahrain (CBB)announces that the monthly issue

of the short-term Islamic leasing

bonds, Sukuk Al-Ijarah, has been

subscribed by 270 per cent.

The expected return on the issue,

which begins on 15 August 2013

and matures on 13 February 2014,

is 0.87 per cent compared to 0.85

per cent for the previous issue on

18 July 2013.



Nigeria is gradually opening up to

Islamic finance, a move that could

bring non-interest banking to over

80 million Muslims. Home to

the largest Muslim population in

sub-Saharan Africa, Nigeria is trying

to establish itself as the African hub

for Islamic finance, which follows

religious principles.

In recent months, a string of

regulatory initiatives have set thegroundwork for products such

as Islamic bonds (Sukuk),

Takaful and interbank lending

products, although there is still only

a small number of local market

participants.

GlobalNews

Thomson Reuters and Dubai Chamber Of Commerce Host a Global Islamic Economy Summit in November

The world's leading source of intelligent information for businesses and professionals, announced that it will host

the Global Islamic Economy Summit in Dubai in collaboration with the Dubai Chamber of Commerce and Industry.

The event will take place on 25th & 26th November 2013 in Dubai, United Arab Emirates .

With a consumer base of 1.6 billion Muslims, much has been said about the significance of the Islamic world and the

promise it holds for economic growth and profitability. Yet very little transformative dialogue has been undertaken

to assess the scale of opportunities and challenges within the global Islamic Economy.

Saudi's Al khabeer eyes regional

investments, bourse listing


13/17

13

Islamic Financial Accounting

Standard on PLS Deposit (IFAS 3)

issued by ICAP

ICAP aims at setting out the

accounting principles to be

followed by institution offering

Islamic financial services for

recognizing, measuring, presenting,

and disclosing the transactions

relating to equity of unrestricted

investment / PLS deposit account

holders.

The standard is also applicable tofunds received on PLS Sharing basis

such as export refinance from SBP

unrestricted investment account.

Adoption of AAOIFI Shariah

Standard No. 17 on Investment

Sukuk by SBP

In continuation of the efforts to

strengthen Shariah compliance

framework and harmonize the

Shariah practices in Islamic banking

industry, the AAOIFI Shariah

standard No.17 on Investment

Sukuk has been adopted by SBP

with immediate effect subject to

clarifications / amendments.

The adoption of the Shariah is inaddition to current Regulations /

instructions and directives issued

by SBP from time to time and is not

replacing them by any means.

Experts have urged bankers,

financiers as well as people in

profession to improve their

understanding about Shariah-based

banking and insurance in the

country.

M a k i n g t h e i r r e s p e c t i v e

presentations at the second Islamic

Financial Expo and Conference

(IFEC) they said growing concern

among the people about

implications of interest basedbanking made it prudent that an

alternative and interest-free

financial system is introduced, on

strong lines, in the country.

SECP constitutes Shariah Advisory

Board

The Securities and ExchangeCommission of Pakistan (SECP)

announced the formation of the

Shariah Advisory Board (SAB), which

will be responsible for harmonizing

Shariah interpretations and

strengthening the regulatory and

supervisory oversight of IFIs and

Islamic Capital Markets (ICMs) in

Pakistan.

The board will also advise the SECP

on the Shariah compliance aspects of

various products launched and the

processes being adopted by the

regulated entities. It will also provide

guidance for issuance of new laws,

rules and regulations for effective

monitoring and supervision of

Islamic financial products.

The equity market regulator has

designated Mohammed Asif, the

insurance commissioner of SECP, tooversee the functioning of the SAB,

whereas Mufti Muhammad Hassan

Kaleem has been appointed as the

chairman.

Omar Mustafa Ansari, a professional

accountant, and Sultan Mazhar Sher,

a legal expert, will represent the

technical committee.

LocalNews

Experts for improved public

understanding about Islamic

financial system

Disclaimer:The news included here is on the basis of information obtained from local and international print and electronic

media sources. IFP and Hidaya IBSS team does not accept any responsibility about their bona-fide.

Islamic banking should be part of

the national agenda in order to

promote a Shariah-based financial

system, according to State Bank of

Pakistan (SBP) Head of Islamic

Banking Salimullah.

The SBP has planned to intensify its

efforts towards creating awareness

and promoting Islamic banking

across the country in collaboration

with all Islamic banks.

Its in the agenda of the central

bank to double the Islamic banking

branches network from 1,000 to

2,000 nationwide, and increase its

share in the overall banking

industry from 5% to 15%

Islamic banking should be on

national agenda
http://www.brecorder.com/pakistan/banking-a-finance/124675-experts-for-improved-public-understanding-about-islamic-financial-system.htmlhttp://www.brecorder.com/pakistan/banking-a-finance/124675-experts-for-improved-public-understanding-about-islamic-financial-system.htmlhttp://www.brecorder.com/pakistan/banking-a-finance/124675-experts-for-improved-public-understanding-about-islamic-financial-system.htmlhttp://www.brecorder.com/pakistan/banking-a-finance/124675-experts-for-improved-public-understanding-about-islamic-financial-system.htmlhttp://www.brecorder.com/pakistan/banking-a-finance/124675-experts-for-improved-public-understanding-about-islamic-financial-system.htmlhttp://www.brecorder.com/pakistan/banking-a-finance/124675-experts-for-improved-public-understanding-about-islamic-financial-system.html


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BookintheSpotlight

This book is edited by Katuri Nageswara Rao. He is anIndian author and he has written many books on the

topic of banking and finance. Some of his books are

Global banking-emerging trends, innovations in

financial system and US banking strategic issues.

Islamic Banking: The New Dynamics, deals with the

global perspective of Islamic Banking. It is set in two

sections namely Perspectives and Country/Regional

Experiences.

Section I Perspective has six parts namely:

Islamic banking and overview;

Islamic banking can you afford to ignore it?

Islamic financing arrangements used in Islamic

banking;

Islamic banking and finance Shariah compliance

and the reinterpretation of Riba;

Banking for the poor: the role of Islamic banking

in microfinance initiatives; and

Ethical money: financial growth in the Muslim

world.

Section II Country / Regional experiences has five

parts namely:

Srilanka and the scope for Islamic banking;

Settlement of Islamic banking disputes in

Indonesia: Opportunities and challenges;

Islamic banks in Jordan: Performance and

efficiency analysis;

Funding and financing in Islamic banking system;

and

Risk management: Islamic financial policies

Islamic banking and its potential impact.

Islamic Banking: The New DynamicsBy Katuri Nageswara Rao

Publisher:

The ICFAI University Press


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AskUs

Questions / Answers

Feed Back Corner

Please provide us with your feedback on the following

email address:

[email protected]

Or you can call to Mr. Shakil Khan, Hidaya IBSS on:

0333-2256392

Question

When an agent under paid agency agreement refrains to carry on the work or forced to discontinue the work, will he be

entitled for the agreed remuneration?

Answer

When the agent, for no reasonable excuse, refrains from carrying on agency that he has been paid for, and the work he

has done was beneficial, he becomes entitled to the remuneration commensurate with part of work done, and within

the limits of the contract value for that part of work. The agent in this case is bound to indemnify the principal for any

loss resulting from his refusal to continue the work.

However, when the principal, for no good reason, forces the agent to discontinue the work before the end of the agency

period, the agent becomes entitled to the full remuneration agreed upon. But if the principal, for a valid reason, forcesthe agent to discontinue the work before the end of the contract, the agent becomes entitled to remuneration for that

part of work he has already performed.

Question

Is it permissible for the buyer in Salam contract to exchange the subject matter of Salam with any other commodity with

the consent of the seller? What are the commandments of Shariah in this regard?

Answer

It is permissible for the buyer to exchange the subject matter in Salam for other goods, except currency, after the

delivery date falls due, as long as such substitution was not stipulated in the contract. This rule applies whether or not

the substitute is similar in kind to the subject matter of Salam. This is provided that the substitute is suitable for being

exchanged as the subject matter of Salam for the capital of the Salam contract. Furthermore, the market value of the

substitute should not be greater than the market value of the subject matter of Salam at the time of delivery.


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ifp - july and august 2013

Documents