More on Ummid: International l National l Regional l Politics l Business l Religion l History l Culture l Education
Backward Federation for quota within quota in Women Reservation Bill: Chairman of All India Backward Classes Federation and senior RJD leader Indra .....Read Full
World wants India to grow, we must take advantage: PM: The world could be having apprehensions about China’s rise but it wants India .....Read Full
Decks cleared for setting up 20 new IIITs: Decks have been cleared for setting up of 20 new IIITs in the country after differences between industry bodies and ....Read Full
Mujibullah, who brought glories to Indian Railways: An abiding interest in Railways led Mohd Mujibullah, Heritage Assistant, Eastern Railways .... Read Full
Gays more likely to experience violent events, mental illness: Gay men, lesbians, bisexuals, and heterosexuals who have ever had a same-sex sex partner are one-and-a-half .... Read Full
Girl banned from school for wearing hijab: A 16-year-old schoolgirl has been banned from classes in Spain after refusing to remove her Islamic .....Read Full
Telangana: Muslim group details Srikrishna Committee on discrimination: The Telangana Muslim Joint Action Committee made a presentation ..... Read Full
Narendra Modi: Travails of Travel Abroad: While law of the land is trying to catch up with the acts of commission and omission in the Gujarat ..... Read Full
President calls for affordable justice for India’s poor: President Pratibha Patil Saturday called for affordable and accessible justice for India’s poor and said .....Read Full
SC expresses anguish on custodial torture, deaths: The Supreme Court has expressed shock and anguish at the brutality of the police personnel .....Read Full
Unique madrasa with exemplary teachings: Setting a unique example of communal harmony and oneness, a madrasa in the city of the Sangam is teaching the Vedas, the Bible and the .....Read Full
Christians up in arms against Hindutva terror in MP: The Christians in Bharatiya Janata Party, (BJP), ruled central Indian state of Madhya Pradesh are up in arms against the alleged .....Read Full
'Islamic Finance is not a Muslim-only affair'
Monday, April 19, 2010 10:43:37 AM
, ummid.com News Desk
‘Don’t let the name scare you. Islamic banking is beneficial for all': "People should know that the name Islamic Banking is used just to give an impression that it works on the Islamic principles. Otherwise, it is an open option and everyone whether ....Read Full
'When London, Singapore and Tokyo can have Islamic banks, why not India?'
India says no to Islamic Banking for the moment
Kerala shelves proposed Islamic bank
Problems and Prospects of Islamic Banking in India – Road Map ahead
Malegaon: "There is nothing more powerful in the world than an idea whose time has come. Islamic finance is not a Muslim-only affair. It shows qualities which are beneficial to all kinds of customers. For all the Shariah-compliant products we sell in countries such as Malaysia, some 70 percent of our clients are non-Muslim," Arab News quoted Manfred Dirrheimer, chairman of the executive board, FWU AG, a German financial services company which has pioneered a number of Takaful products.
Dirrheimer was speaking at the Amanie-Falaika Islamic Finance Symposium held at the Jumeirah Emirates Towers in Dubai last week and attended by dignitaries such as Ahmad Hizzad Baharuddin, director of Islamic banking & Takaful, Bank Negara Malaysia; Farhan Al-Bastaki, executive director of Islamic finance, Dubai International Financial Centre (DIFC); and Nor Azamin Salleh, CEO, Asian Islamic Investment Management (AIIMAN).
According to the Saudi Arabia's leading English daily, Dirrheimer predicted that several Islamic financial products might become "mainstream" but warned that Shariah compatibility and integrity of these products must always be ensured. However, he rued the fact that the product innovation process in the Islamic finance industry is much slower than in the conventional industry and warned that any "industry without innovation is dead."
The symposium exuded cautious optimism of an industry which is showing a faster rate of recovery than its conventional counterpart from the twin effects of the credit crunch and the global financial crisis that has affected the world for the last two years, albeit in a market, Dubai, that was perhaps one of the worst hit in both the conventional and Islamic space especially relating to real estate assets.
This was further manifested by the recent and imminent launch of a spate of Islamic equity and investment funds including the Amana Developing World Fund by Saturna Capital in the US; the HwangDBS AIIMAN A20 China Access Fund; Comgest Shariah Emerging Markets and the Comgest Shariah Europe Funds for Saudi investors; Crescent Investments Shariah-compliant Australian Equity Fund; LM Australian Alif Fund; BBGI Islamic Share Energy Fund in Switzerland; the Oasis Crescent Global Income Fund to be launched by Oasis Asset Management of South Africa; and the Yurie Shariah Compliant Korea Index Investment (Equity) Trust.
Perhaps the increasing confidence of the Islamic investment sector was underlined by the revelation by Khazanah Nasional Berhad, the investment arm of the Malaysian Ministry of Finance and effectively the country's major sovereign wealth fund (SWF), that Shariah-compliant investment is its mainstream activity, whereas its conventional investments comprises its alternative investment portfolio. This makes Khazanah the first and only SWF in the world whose focus is largely Shariah-compliant investments.
As far as SWFs in the Muslim world are concerned, it is usually the other way round, with most such SWFs do not even have Islamic investments on their radar. If only a small proportion, say 30 percent, of these SWF funds migrate to Islamic investment opportunities, then the sector would receive a serious boost in terms of market size, which is currently estimated at between $1 trillion to $1.2 trillion.
It was inevitable that the Shariah governance process in Islamic finance should surface given recent developments in the High Court in London and also recent resolutions issued by various bodies including the one on Tawarruq by the Islamic Fiqh Academy in Makkah.
Prominent Saudi Shariah scholar Mohamed Elgari reiterated the importance of developing a scientific methodology for the Shariah governance process in the industry. He added that the process of internal compliance in Islamic Finance is extremely important to see how it is practiced by various institutions.
He rued the fact that the IDB-sponsored idea of developing a Shariah rating system which would evaluate the internal processes in institutions and for products "from innovation to litigation" did not take off. The purpose was not to decide what is halal or haram.
Elgari rejected any notion that derivatives are not possible in Islamic finance. "We should not look at derivatives like anything else in life in black and white terms. In moderation, they could be useful, especially to reduce risk on a Shariah basis. In principle, derivatives are possible in Islamic finance. There is a need for Muslims to manage risks and take a level of risk they want. This is Takaful," he added.
Daud Bakar, the well-known Malaysian Islamic scholar and entrepreneur and managing director of Amanie Islamic Finance Consultancy & Education LLC, stressed that the Islamic finance industry was allowing Muslims to rediscover their identity and Shariah advisories were the custodians of the Shariah governance process within the prescribed legal limitations.
He agreed that hedging (Tahawwut) is allowed under the Shariah although the industry wants "hedgers not speculators." Shariah-compliant hedging, he added, is not going to the market to arbitrage one against the other, but as part of good risk management, which is important to protect the interests of investors and institutions.
Earlier, Farhan Al-Bastaki of the DIFC urged the Islamic funds industry to listen more to what the clients and end users of these funds need and want; to be more rigorous in assuring that investment fund products are truly Shariah-compliant; to ensure that they are Shariah-based products as opposed to merely "Islamizing" conventional products; to promote greater consistency of Shariah-compliant funds documentation a lack of which will leave clients and the market in general in a state of confusion and uncertainty regarding how ethical their investment funds really are; and to educate clients on how Shariah funds really are fundamentally different products from conventional funds, while making sure that their own staff are properly trained in Shariah finance to adequately explain the benefits of Shariah funds to both Muslim and non-Muslim investors, who too should be considered as potential clients of such funds.
"By promoting the unification of funds documentation, we can provide a great deal of confidence in the market. Shariah scholars must focus on what's good for the industry, by which I mean they should focus more on the various areas of agreement among them, rather than their points of philosophical difference," Arab News quoted him saying.
Comment on this article
Ummid.com: Home | Contact Us | Disclaimer | Terms of Use | About Us | Feedback
Ummid Business: Advertise with us | Careers | Link Exchange
Ummid.com is part of Awaz Multimedia & Publications providing World News, News Analysis and Feature Articles on Education, Health. Politics, Technology, Sports, Entertainment, Industry etc. The articles or the views displayed on this website are for public information and in no way describe the editorial views. The users are entitled to use this site subject to the terms and condition mentioned.