Islamic Banking and Finance
PAKISTAN TODAY: Many people think that Islamic banking and finance is a cure to all the financial woes. In fact that is not the case. Islamic banking and finance is as man-made as the conventional banking. The only difference is that Islamic banking and finance seeks basic guidance from Islamic sources like the Quran, Sunnah, Ijma and Qiyas. Only because of this Islamic banking and finance is free from some of the weaknesses and problems besetting conventional banking. There is very strong theoretical evidence that the principles of Islamic banking and finance are superior to the principles of conventional banking. This is why one would be inclined to assert that had Islamic banking and financial principles been implemented in the financial markets the problems we are facing today in financial industry would have been avoided to a great extent. » | Durdana Najam | Monday, November 21, 2011

Court Begins Hearing Islamic Bank Dispute
CBC NEWS: The financial dispute between an Islamic bank and about 200 families whose mortgages are in limbo, moved to a Toronto courtroom on Thursday.

The homeowners had interest-free mortgages with United Muslim Financial totalling about $32 million.

Since 2005, UM Financial has offered loans and mortgages to people who want to adhere strictly to Islamic (Shariah) law, under which no interest can be charged on a loan.

The court will now decide what to do with those mortgages.

UM Financial was ordered into receivership on Oct. 7. » | CBC News | Friday, November 11, 2011

HT: Always On Watch »

Spotlight: Islamic Banking System
In times of financial crisis there is an alternative banking system, which has proved to be more stable, than the traditional, Western banking system. I mean - the Islamic banking. The financial systems in the Islamic countries, even in those, who were formerly Soviet republics - like Kazakhstan - are a real alternative, while the Russian business and science lacks necessary knowledge to adapt its finance to the severe conditions of the crisis.
We will be discussing this issue with our guests the Head of the Russian Islamic Committee Geidar Jemal and Financial analyst Sergey Aleksashenko

Islamic Bank of Britain Gets Cash Boost for Sharia-compliant Loans
THE INDEPENDENT ON SUNDAY: A fortnight after it was revealed by The Independent on Sunday that Lloyds banking group had abandoned its landmark Islamic mortgage offer, one of its rivals has outlined plans to expand the number of home loans offered which comply with sharia law.

The Islamic Bank of Britain has secured an extra £20m of investment from Qatar International Islamic Bank so that it can increase the number of sharia-compliant home loans and savings products. Under sharia, the payment and receipt of interest is banned, as is investment in areas such as arms manufacturing, alcohol and tobacco. >>> | Sunday, August 01, 2010

Dhimmitude Alert! Lloyd's of London Eyes Islamic Reinsurance
Educating Islamic Bankers: Dubai International Financial Center plans to set up a board to encourage education in Islamic finance, an industry that is likely to grow by 15 to 20 percent this year despite the financial crisis.

The Executive Director of Islamic finance at the DIFC Nik Thani, speaking at the 2009 Reuters Islamic Banking and Finance Summit in Dubai, says that with large conventional banks increasingly venturing into the Islamic arena, more educational and training resources are needed.

Thani says "this would be the minimum standard and from their we could build up to other things...including degrees in Islamic finance."

Speaker: Nik Thani, Islamic Finance Executive Director Dubai International Financial Center

Presenter: Ruben Ramirez, Dubai
REUTERS: LONDON - Lloyd's of London is setting up an Islamic re-insurance syndicate with a capacity of up to 200 million pounds to write Islamic compliant reinsurance globally, a PriceWaterhouseCoopers executive said on Tuesday.

Mohammad Khan, director for Islamic insurance, or takaful, at PwC, said the Lloyd's syndicate would include mainly financial institutions and to a lesser extent individual investors. It would become operational between the end of 2009 and the beginning of next year.

Financial consultant and accounting firm PwC is advising the financial group on the syndicate, he said at the Reuters Islamic Banking and Finance Summit in London.

Lloyd's of London was not immediately available to comment. >>> By Cecilia Valente | Tuesday, April 14, 2009

Dhimmitude! Outright Dhimmitude! Read This Article and You’ll Be Nauseated! Have the British Lost All Sense of What Once Made Them a Great Nation?
THIS IS MONEY: As borrowers and savers call for a fairer banking system, are the principals of Islamic banking the answer? We take a look at the Islamic Bank of Britain

Tired of hearing about fat cat bank bonuses when you have been a bank's loyal saver for decades and received nothing?

Well, there is a new bank in Britain offering out a share of its profits, not just to shareholders, but those who deposit savings into its coffers.

The main aim of the Islamic Bank of Britain is to offer 'Sharia compliant' ways of borrowing and saving for British Muslims, which are in tune with Islamic law.

Non-Muslim bank customers can also benefit from this as Sharia rules – based on ethical trading principles – mean ordinary customers benefit along with the bank in the good times.

But they can also lose if the bank starts to lose funds. Is Islamic Banking the Model for Fairness? >>> Alan O’Sullivan | Saturday, April 4, 2009

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The End of Britain

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Keeping the Faith
TIMESONLINE: Islamic finance principles may be a thousand years old but they have attracted the attention of the West only recently. Now business schools are offering specialist masters programmes on the subject

While the world’s financial systems are shaken to their foundations, global stock markets tumble and thousands of bankers are made redundant, one area of finance goes from strength to strength.

Islamic banking and finance principles may be a thousand years old but they have attracted the attention of Western financial services companies only recently. Now business schools are offering specialist masters programmes on the subject.

Islamic banking and finance must comply with Islamic law, or Sharia. This is governed by a number of fundamental principles and prohibitions and there are many differences from conventional finance.

“There is the absolute prohibition on the charging of interest,” says John Board, director of the International Capital Market Association (ICMA) Centre, part of Henley Business School at Reading University. ICMA runs an MSc in investment banking and Islamic finance, taught jointly with the International Centre for Education in Islamic Finance in Kuala Lumpur. “This leads to the question: how do you raise money in a way that is commercially sensible but does not involve paying interest?

“And on the investment side, there is a range of prohibited activities. For example, Islamic investors may not invest in businesses that trade in alcohol or pork-related products, or are involved in certain types of entertainment.”

Other restrictions include not being able to sell something unless you own it, or to invest in companies with high levels of debt. Taking all the restrictions into account, many conventional financial products, such as deposit accounts, mortgages, credit cards, insurance, bonds and many derivatives, such as futures and options, are out of bounds to Islamic investors.

Until recently, certainly in non- Islamic countries, there was little on offer for people who wanted Sharia-compliant banking and finance. However, substantial growth in this market over the past five to ten years, partly driven by Middle Eastern countries investing oil revenues, means more institutions are beginning to offer appropriate products and services. Islamic assets under management are about £400 billion, according to the Islamic Financial Services Board, an industry body.

Today Islamic finance and banking touches everything from large capital infrastructure projects to retail banking. HSBC in the UK, for example, has Sharia-compliant bank accounts and mortgages. And the increase in Islamic finance activity means there is a need for postgraduates with knowledge in this area. “There is a big demand for Islamic finance as a professional activity,” Board says. >>> Steve Coomber | December 3, 2008

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Bahrain Islamic Bank Profit Up 84%
GULF DAILY NEWS: MANAMA: Bahrain Islamic Bank (BIsB) saw net profit rise 84 per cent in the third quarter of the year up from $46 million for the third quarter of last year to $85m.

"This excellent performance is attributed to the balance in diversifying investment risk, proper application of the bank's financial policies and extreme care in not involving the bank's financial resources and investments in high risk transactions that could undermine the bank's financial position," said BIsB chairman Khalid Abdulla Al Bassam.

In spite of the prevailing global financial crisis due to the US mortgage credit crisis, the bank was able, through the application of the Sharia compliance standards laid down by its Sharia Supervisory Board, to properly select its banking transactions to achieve positive results, he said.

In addition, the bank enjoys a high level of liquidity that would enable it to go forward with confident steps. Bahrain Islamic Bank Profit Up 84% >>> | October 15, 2008

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Economic Woes, Commodity Slump Could Hit Islamic Banks
REUTERS: SINGAPORE - Islamic banks have been barely bruised by the global credit crisis so far, but the worst is yet to come as falling property and commodity prices and slowing economies start to hit the sector.

As the global economy buckles, credit lines tighten and consumer confidence crumbles, Islamic institutions -- which manage an estimated $1 trillion worldwide -- will not escape the pain that is plaguing conventional lenders in the West.

Sliding commodity and property prices in predominantly Muslim countries in the Middle East and Southeast Asia are likely to have a particularly strong impact on the sharia market due to the industry's heavy reliance on those assets to support deals.

"Islamic banks are heavily exposed to real estate and private equity in many of these markets," said Abdulkader Thomas, chief executive of Kuwait-based sharia advisory firm Shape Financial.

"If these markets are overpriced -- which some of them are -- then Islamic banks could well be particularly exposed."

Strict lending requirements, insistence on transparency and requirements that physical assets underpin transactions helped the Islamic industry survive the first round of the U.S. subprime mortgage meltdown, which fueled a worldwide credit crunch.

But the global financial crisis has worsened dramatically in recent weeks, sparking heavy selling of stocks, commodities and oil and threatening to plunge developed and emerging economies alike into recession.
Many companies are freezing or slashing spending and cutting jobs, and consumers are reining in spending. Economic Woes, Commodity Slump Could Hit Islamic Banks >>> By Y-Sing Liau – Analysis | Monday, October 13, 2008

REUTERS: Some Gulf Sharia Banks in Peril

SINGAPORE - Some Gulf Islamic banks could fail as frozen credit markets and slumping property prices take a toll, but government aid should save the industry from a prolonged slowdown, a leading sharia lender said on Tuesday.

Islamic banks have hardly felt the chill of the credit crisis so far. But some industry experts warn that the $1 trillion industry will not be spared from the fallout as prices of commodities, property and oil slide. All are core drivers of the Islamic financing sector.

Sharia lenders in the Gulf, unlike their peers in Asia, would be harder hit by the credit rout due to their greater direct exposure to the property market, said Badlisyah Abdul Ghani, chief executive of Malaysia's CIMB Islamic Bank.

"The sovereign-backed Islamic banks are very safe and they will be supported by the sovereign if they have problems in liquidity," Badlisyah told the Reuters Wealth Management Summit in Singapore.

"But for privately owned banks, they would feel some difficulty. Whether or not they're going to fail is anybody's guess but the expectation is that some will." >>> | October 14, 2008

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Islamic Banking and Decisive Cooperation
ASHARQ ALAWSAT: Riyadh -The Islamic banking sector suffers from unsystematic efforts, lack of cooperation between institutions and the inclination towards self interest rather than the benefit of the industry as a whole. As a result, competition between these institutions has at times been unfair as it has hindered the unification of efforts and potentials towards raising the products and services offered by this industry to an international standard that meets the requirements of those who deal with the industry and to accomplish a real independent character that is expressed through the true religion.

The lack of cooperation is clearly seen in the lack of a standard model or contract to be circulated amongst Islamic financial institutions or institutions that offer Islamic financial services for any products within this industry on the local, regional or international levels. This could have been accomplished regarding standard products, the specifications of which are fixed except for pricing, profiting and guarantees for example Murabaha investment products between financial institutions, and which is used by many financial institutions nowadays to fund each other.

Like credit cards, direct individual funding and deposits, one would find that every Islamic financial institution or financial institutions that offer Islamic services has its own system regarding cards, funding products or deposits. However even if such private forms and contracts differ in shape or procedure, they are the same as there is no added value to this variation from which the industry or the customer could benefit. This variation in fact becomes an additional cost to the customer, and this has a negative effect on the efficiency of the Islamic banking product as well as competition with other conventional products available on the market.

In addition, such variation in standard products and the lack of an agreed form for these products between the Islamic financial institutions and the failure to meet international standards is a major challenge that the industry faces at present. Islamic Banking and Decisive Cooperation >>> By Lahem al Nasser | September 22, 2008

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Islamic Banks ‘Are Making Their Mark’
GULF DAILY NEWS: MANAMA: A new report from a global strategic management consulting firm shows that Islamic banks are making their mark in non-Muslim countries.

The AT Kearney study reveals that these wholesale banks target a broad set of corporate, institutional and high net worth clients, both Muslims and non-Muslims.

While Sharia-compliant banking has traditionally focused on the GCC and Malaysia, there has recently been a dramatic increase in the number of Islamic banks outside the core markets, most remarkably in the UK, where the number of Islamic banks has more than doubled over the past 12 months.

At the same time, their products remain popular in their core markets, where Islamic banks consistently outgrow their conventional competitors.

"While Islamic banks in their core markets take a universal banking approach, with retail, corporate and investment banking business lines, they focus on wholesale banking in the UK," said AT Kearney Middle East manager of financial services Dr Alexander von Pock.

Assets in the Islamic banking sector grew to over $250 billion globally in 2006, according to the UK Treasury. Islamic Banks ‘Are Making [Their] Mark’ >>>

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

A Muslim's Viewpoint: Bilal Philips - Interest and Islamic Banking

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

New Head of Islamic Banking Unit Appointed by Citigroup
HOT FINANCIAL NEWS!: Citigroup steps up its Islamic banking operations. It has appointed the former head of its Middle East debt capital markets group as its chief executive of business.

Samad Sirohey has become the head of Citi Islamic investment bank and the head of global investment banking.

Investment banks are redeploying much of their top talent to the Middle East, hoping to secure revenues from one of the fastest-growing regions in the world at a time when their more established businesses are struggling because of the credit crisis.

The Dawning of a New Dark Age (Paperback – USA)
The Dawning of a New Dark Age (Hardcover – USA)

Riyazi Farook: Islamic Banking and Finance

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

Islamic Banking Heads West
ARABIAN BUSINESS.COM: A.T. Kearney report reveals Islamic finance doubled in the past year.

A new report from A.T Kearney, a global strategic management consulting firm, revealed that Islamic banks are making their mark on the financial markets of non-Islamic countries. While shaira-compliant [sic] banking has traditionally focused on the GCC and Malaysia, there has recently been a dramatic increase in the number of Islamic banks outside the core markets: most remarkably in the UK, where the number of Islamic banks has more than doubled over the past 12 months.



At the same time, they're products remain popular in their core markets, where Islamic banks consistently outgrow their conventional competitors. Assets in the Islamic banking sector grew to over $250 billion globally in 2006, according to the U.K Treasury. In the GCC, this segment expanded to 15 per cent of the total system and is expected to reach 50 per cent within the next few years.



The success at home enables these banks to export their business abroad, as Islamic banks from the GCC are the major shareholders behind all of the newly set-up Islamic banks in the UK. However, the strategic approach they take on differs between there and their home countries. Islamic Banking Heads West >>> | May 5, 2008

A T Kearney >>>

The Dawning of a New Dark Age (Paperback - UK)
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UK

Islamic Banking Is Going Mainstream
Image courtesy of Google Images
EMIRATES BUSINESS 24/7: Vince Cook, the CEO of The Islamic Bank of Asia (IB Asia) of Singapore, sees a strong Islamic finance industry in the region and works on bridging the gap between South East Asia and the GCC. For him, a key priority is to develop cross-border transactions within Asia and the Gulf with a view to securing a range of business, he told Emirates Business. 



What got you started in the Islamic financial services industry?

My first 24 years in banking were with Barclays, so I was basically associated with the British banking scene, so to say. Then they asked me if I was interested in looking at the overseas part of the business, and in 1987, I took my first Islamic banking project. That was my first exposure to the industry. 

At that time, the nature of the market was very different from what it is today. Since then, there has always been an element of Islamic banking with me. It was not a conscious decision but today it has become a very familiar field to me.

The elements of Islamic banking have always appealed to me. The social side of it, the business concern that underlines the use of money and the idea it is used for productive means are very important. Islamic finance has a close involvement with the community, which is remarkable. I strongly believe in all these things and enjoy them very much.



How would you describe the Islamic banking industry today, its atmosphere and current trends?

It's in the very early stages of development. A lot of players still question as to how we develop the business and how do we expand, as opposed to competing with each other head-on for market share. The game is about making the market bigger rather than fighting with each other for small percentages. 

In our case, based in Singapore, we are surrounded by huge potential markets with large Muslim populations. Investors are looking at different ways to structure the business. Islamic banks are a serious option for the very first time and if we look 20 years ahead and compare ourselves, we are very small today. Islamic Banking Is Going Mainstream >>> By Shuchita Kapur | April 29. 2008

The Dawning of a New Dark Age (Paperback – USA)
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Islamic Banking: Legitimate Demand?
Image courtesy of Google Images
ASHARQ ALAWSAT: Riyadh - The Islamic nation in all its stages has suffered under the weight of usury until recently since it had no other choice but to deal with the products of colonialism. Usury is a tool that was employed [by the occupational forces] to rob the nation of its resources and weaken its economy whilst creating a constant dependence on the capitalist system.

This was the case until a group of Muslims got together and with faith in the validity of Islamic Shariah and its suitability for situations regardless of time and place, took the responsibility upon themselves to find an alternative to the usury-reliant institutions. And thus, the Islamic banking system emerged and in the span of 30 years, such institutions recorded one success after the other and penetrated markets that had previously been impregnable.

And yet, there were some who viewed in this victory a defeat and attempted to sabotage the experiment. Under an economic pretext, they meticulously examined sources to find evidence to challenge and invalidate the legitimacy of Islamic banking – but came out empty-handed. All what they could argue, theoretically speaking, was that usury does not apply to paper currency because it cannot be valued against gold and silver.

Such people justified their claims by drawing on archaic and contemporary sources, in addition to some clerical opinions and the provisions of the monetary system – all of which were obsolete and could not be relied upon in this day and age. Meanwhile, prominent scholars and clerics have stated that paper currency could be valued against gold and silver.

According to the former Grand Mufti of Saudi Arabia, the late Sheikh Abdulaziz Bin Baz, "It is common knowledge among contemporary scholars that banknotes are valued against gold and silver [currency] since it [paper currency] gives commodities value and prices." Islamic Banking is a Legitimate Demand >>> By Lahem al Nasser | April 25, 2008

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The Silent Jihad Against the West
RIGHT SIDE NEWS: Anyone that cares to learn about what is going on in the world is familiar with active jihad, the "holy war", conducted with terrorism and directed at the modern world in general and western civilization more specifically. But there is also another form of jihad that is part of the deliberate effort to have Islam replace all concepts of morality and the values held dear by the rest of us.

The name of this silent "fifth column" effort is "Sharia Banking". Unfortunately, Sharia Banking is increasingly accepted by western banking institutions without any real understanding of what the Muslim goal is and what is at stake in the efforts by these institutions to attract more business, profits and money to bail them out of financial messes they brought upon themselves.

Islamic Sharia banking is coming to the United States and other western nations, thanks to global banks such as Citigroup, HSBC, Deutsche Bank, Morgan Stanley and Goldman Sachs. Great Britain is now pledging to become the Islamic banking center of the world. Clearly the headlong rush by all global banks to enter the world of Islamic banking is well underway. Why do western banks seek to participate in Sharia banking; because it gives them a chance to enter the Islamic banking industry which has over $1.5 trillion available today and is growing at a steady and explosive rate of over 15% per year.

The implications for the west, and especially for the United States, are staggeringly destructive. Islamic banking working through global banks is doing for Islam what it could never do on its own: giving legitimacy to Sharia law and infiltrating it into the fabric of western society.

For those not familiar with Sharia Banking; it is a system which creates and sells services and products that are in strict accordance with Sharia law. Sometimes it is referred to in the Islamic culture as "Sharia finance". It dictates how the practices of banking, investment, bonds, loans, brokerage, etc, are to be conducted.

To insure compliance and to become "Sharia banking" compliant, banks must hire Sharia experts to review and approve each product and practice of the bank. This is known as "halal", which has been described as "the Muslim equivalent of kosher in Judaism." There is a shortage of such Sharia experts so there is competition among banks to find such experts to sit on their boards of directors. By having an "expert" involved in banking decisions, this provides the legitimacy to each banking decision because it is made at the director rather management level. However, most of these Sharia experts" are from the radical Wahhabi school of Islam in Saudi Arabia and elsewhere, and they hold views diametrically opposed to the basic values of Western civilization.

The Center for Security has identified some of the Sharia experts sitting on the boards of U.S. financial institutions. The top twenty "advisors" include many with conflicts of interests and anti-trust issues since they sit on boards of many Islamic banks at the same time. The Center for Security identifies a couple of advisors with ties to money-laundering and terrorism:

Yousuf Quaradawi who is prominent in the Muslim Brotherhood, owns two banks himself and has issued statements in support of Palestinian attacks on Israeli citizens and has issued rulings supporting Hamas and Hezbollah jihad attacks against Israel. The Silent Jihad Against the West >>> By Vincent Gioia | May 1, 2008

The Dawning of a New Dark Age (Paperback – USA)
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A View on Islamic Banking Which Sees All the Benefits But None of the Dangers Inherent in Its Growth Here in the West
FINANCIAL TIMES: A new Islamic bank will be launched in London on Tuesday, reaffirming the City’s status as the leading western financial centre for this fast-growing sector.

Gatehouse Bank is the fifth Islamic bank to be awarded a licence in Britain, demonstrating the resilience of Sharia-compliant finance in spite of the credit crisis that has wiped billions off the balance sheets of conventional banks.

David Testa, chief executive at Gatehouse, said: “Islamic finance is a healthy and growing industry, stimulated primarily from the Gulf, but also from growing interest in south-east Asia, including new centres such as Indonesia.

“Investors in the Middle East are increasingly looking to diversify out of their region and they see London as a key marketplace to help them in this. One of the main reasons why London has become such an important centre for this kind of finance is due to the legislative changes pushed through by the government over the last five years.

“It has brought in new laws to level the playing field with conventional finance and make the City an attractive place to invest in a Sharia-compliant way. For London, what with the problems of Northern Rock and the crackdown on non-doms [non-domiciled foreigners], this really is one area where the City has got it right.”

Britain is the only country in the European Union to have licensed Islamic banks as the government has realised the potential of this market for the City as a financial centre. It has also seen the development of Islamic finance as a way of building bridges with the 2m Muslims who live in the UK.

The UK has also stolen a march on New York, the world’s other leading financial centre, as a hub for Islamic finance, partly because of its timezone and partly because of the antipathy towards this sector in the US following the September 2001 attacks. UK’s Fifth Islamic Bank to Tap Demand Growth >>> By David Oakley, Capital Markets Correspondent | April 21, 2008

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