Hall of FameHall of Fame  Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp  chatChat
  RegisterRegister  LoginLogin
Questions and Discussions about Islam
 Whyislam.org Forums : WhyIslam : Questions and Discussions about Islam  
Message Icon Topic: Islamic Economics: An Alternative Post Reply Post New Topic
<< Prev Page  of 22 Next >>
Author Message
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 21 December 2009 at 1:47am

Swiss banks should step up Islamic wealth drive

Switzerland faces a bigger threat from the developing private banking system in the Middle East than reaction to the minaret ban, according to one finance expert.

However, the controversial vote and subsequent condemnation should serve as a warning for the Swiss finance industry to better serve the needs of Islamic clients, observers believe.

Switzerland is waiting to see how far November’s referendum decision to ban the future construction of minarets will damage the country’s image and business interests.

So far, only Turkey has reacted with concrete retaliatory proposals by suggesting that its citizens withdraw assets held in Swiss banks. But the Swiss Bankers Association (SBA) is not expecting outflows of the estimated $200 billion (SFr208 billion) held by mainly Arabic clients in Switzerland.

“Muslim clients are very canny investors and appreciate the competence, quality of service, good advice and good performance they get from Swiss banks. Money knows no religion,” SBA spokesman James Nason told swissinfo.ch.

John Sandwick, head of Geneva-based group Islamic Wealth and Asset Management, told swissinfo.ch that the vote had stirred up resentment in the Middle East, but not enough to spark organised financial reprisals from wealthy Muslims.

“Switzerland did something really offensive against people who could really hurt us, but on this occasion it looks like it will not have a big impact on Swiss private banking in the long run,” he said.

Local competition

Having suffered setbacks in the United States and Europe in a bruising battle over tax evasion, Swiss banks are increasingly turning their attention to the Middle East, Asia and developing markets.

Switzerland is not the only European country to have identified lucrative prospects in the region and has long faced stiff competition from London, and to a lesser degree, from Paris to attract petro-dollars.

However the main threat in future may come from local banks setting up their own wealth management services, with a much wider array of Sharia compliant services.

“Lots of local private banks [in the Middle East] are starting up their own private banking businesses,” Sandwick told swissinfo.ch. “The domestic wealth management programme is already in the process of destroying the Swiss private banking model. It is not there yet, but it will not take too long.”

Sandwick believes the Swiss are taking too long to offer Middle Eastern clients a full range of private banking services that are compliant with Islamic legislation known as Sharia.

Sharia law, for example, prohibits the charging or payment of interest and investments associated with gambling, alcohol, tobacco, pornography or pork production.

Time is ripe

Despite Swiss banks being present in the oil rich region for many years and producing a steady trickle of Sharia compliant services – such as the recent wealth management offering by Bank Sarasin – Sandwick thinks they have barely scratched the surface of Islamic finance.

“All the locals are saying that they want Islamic financial products, but Swiss banks do not appear interested in doing anything,” he said. “These clients do not have access to plain vanilla [standard] wealth management with Fatwa [approval from Islamic clerics].”

Sandwick insisted that the time is ripe for Swiss private banking to make serious inroads into one of the few global regions to come out of the financial crisis with a steady supply of new wealth.

And he believes that Muslim clients would in future seek safe, conservative refuges for their assets after taking a battering with the recent fad for investing in complicated products. Switzerland’s reputation for solid, safe banking has lost some of its sheen after becoming entangled in the subprime crisis, but it still retains much of its private banking credibility.

“Right now is the time to penetrate further into this market because others have lost credibility,” he said.

Matthew Allen, swissinfo.ch
 
http://www.swissinfo.ch/eng/index/Swiss_banks_should_step_up_Islamic_wealth_drive.html?cid=7913606 
 

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 28 December 2009 at 1:22pm

IDB approves $11.5b funding for 3-year plan

27 December 2009

JEDDAH - The Board of Executive Directors of Islamic Development Bank Group has endorsed a medium-term program for 1431-1433H (2010-2012G) in which $11.5 billion from its ordinary capital resources will be allocated to finance development projects, IDB president Dr. Ahmad Mohamed Ali said.

"Under this three year program, the bank will extend some $11.5 billion from its ordinary capital resources to finance development projects," he said.

"The approval of this program is a part of a 9- year transformation roadmap toward realizing Vision 1440H (2020G) which was developed by a high commission composed of a number of dignitaries in Islamic world. The commission chaired by Dr. Mahathir Mohamed the former prime minister of Malaysia, aimed, through the strategy, to transform IDB into an international-scale development institution," he added.

http://islamonline.com/news/articles/28/IDB-approves-$115b-funding-for-3-year-plan.html



Edited by Al-Cordoby - 02 January 2010 at 2:03am
Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 02 January 2010 at 2:04am

Risk Management in an Islamic Framework

Expansion of the real economy by larger production of goods and services requires expansion of the financial sector through greater mobilization of society's savings and innovative methods of financing productive enterprises, exchange and distribution. With the expansion of the financial sector come more risks.

If each economic agent were left to bear the risks involved in his/her economic activity alone, economic activity would be severely constrained. It is socially advantageous to allow economic agents to distribute the burden of risk bearing among themselves. The more widespread the dispersal of risks, the larger the volume of risks that can be borne by the society as a whole, hence the more efficient the system. But this must be done equitably. Fairness requires that those who bear potential losses also have a chance to share in the profits, as these losses/profits are uncertain .....

Justice in Risk Sharing

The two methods of risk management, sharing or transferring, have different impacts on the economy and society. Despite their predominance in the world today, risk management based on transferring the risk, or risk shifting, is less efficient, as well as unjust and inequitable. A system of production and finance based on risk sharing will be more efficient and equitable.

The risk-sharing arrangements are more efficient for two main reasons. First, allocation of investible funds is based on expected profitability (i.e., productivity) of the projects concerned, whereas in the interest-based system, allocation is heavily biased towards the creditworthiness of the project-sponsors, which depends on their wealth holding rather than on the expected profitability of the relevant projects. Second, a system of risk sharing encourages entrepreneurs and innovators, the dynamic people whose ideas take the economy forward. In contrast, a system that allows all risks to be transferred to entrepreneurs, guaranteeing the capital and a positive return to suppliers of investible funds, protects and promotes the renter class.

Financiers should not be allowed to transfer all the risks attending upon profit seeking on to producers/entrepreneurs, as this creates a pressure for accelerated growth that is deleterious for the environment.

Risk sharing results in a more equitable distribution of income and wealth. ........

http://www.islamonline.net/servlet/Satellite?c=Article_C&cid=1260258522489&pagename=Zone-English-Living_Shariah%2FLSELayout

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 03 January 2010 at 1:20pm

Basics of Islamic finance

The conceptual difference between an Islamic finance and a conventional finance transaction lies in the fact that in conventional finance, the financial institution generally lends cash for a length of time, often direct to the client or borrower, of course based on a credit rating or evaluation, on the basis that the borrower would return the borrowed amount plus an interest amount. The interest amount and the original borrowed amount is required to be repaid to the lender over the loan period or by the end of the loan period. Thus the transaction in essence is the lending of cash against the return of a higher amount of cash, and not necessarily for a specific purpose. One of the basic ideas behind the interest rate is the time value of the money lent. The excess cash returned to the lender over and above the borrowed amount is considered “riba” in Islamic finance.

In Islamic finance, there is no direct lending of cash against return of a higher amount of cash, unless the transaction is asset backed implying that the transaction has to involve the sale and purchase of an asset. In a typical financing transaction, the Islamic financial institution will purchase assets required to be financed by a borrower at a price and sell them to the borrower at an agreed (higher) price allowing the financial institution to make a profit. This purchase and sale of an asset basically renders the financing as “Shariah-compliant.” Islamic Shariah laws allow cash to be lent, but generally only as “Qard Hassan” where only the same amount of cash is required to be returned, if returned at all.

The point to note is that in an Islamic finance transaction, the financier takes an element of risk, that of ownership of an asset and consequent non-payment by the client of the asset’s sale price. Any default penalties imposed to encourage payment on time do not accrue for the benefit of the lender but get paid to charity. There are other inherent risks in the transaction but the idea is that this risk-taking is what allows the Islamic financial institution to make a profit on the financing transaction. Therefore, even though the payment terms in a conventional and Islamic financing contract may look alike, there are differences in the conceptual structure of the transaction. Usually the profit margins charged by Islamic financial institutions are about the same as interest rates of conventional financial institutions, but this is largely due to competition, the required profits of shareholders of such institutions, and also quite possibly driven by higher legal and administrative costs pertaining to the financing transactions.

It can be logically derived that Islamic financiers would need a deeper understanding of a borrower and his business to allow minimizing risks of borrowers defaulting on purchase of the asset underlying a finance transaction. This effectively results in lending to real businesses and not speculative and high risk businesses, quite a relevant topic these days. Even Qard Hassan generally implies money moving into productive activities since lenders would not in general fund leisure or speculative activities of any borrower.

In conclusion, using Islamic finance or even regulating it, requires an understanding of concepts that underlie the industry — in this case the Islamic code of law — the Shariah. An understanding of Shariah and its goals or maqasid will greatly enhance one’s perception of Islamic finance and economics.

http://islamonline.com/news/articles/73/Basics-of-Islamic-finance-.html

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 04 January 2010 at 2:35pm

Islamic home finance offers new solutions in this economy

The business model and growth of the Islamic finance sector – the only financial system in the world today that is based on the teachings of a major religion – may present new opportunities for American households – Muslims and non-Muslims alike.

The Islamic home financing sector is active in nearly 40 states in the United States. While operating on an interest-free business model, Islamic home financial institutions are compatible in every way with modern capitalism, just like conventional financial institutions.

There are differences, however.

Read the rest …

 http://islamicfinancenews.wordpress.com/category/scholars/sheikh-yusuf-talal-delorenzo/

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 05 January 2010 at 3:05pm

Rationale for the Prohibition of Usury (Riba)

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question: (South America) While I understand that the shariah is strongly opposed to riba in all its forms, I was wondering what the rationale for this is. The Quranic text and prophetictradition are clear in prohibiting it but I haven't yet seen a clear explanation of why it is problematic. I also fail to see WHY asset-backed ownership is the only permissible type in Islam and exactly what the problem is with other purely financial instruments. Are there any other readings you could recommend to help answer these questions?

Answer: Please keep in mind that the prohibition is very much a moral issue, and that it is closely related to the concept of khilafah or stewardship. The Islamic concept of monotheism views the Almighty as the Fashioner and Possessor of all creation.

His is all that is in the heavens and on earth. Everything submits to Him (2:116).

When the earth and everything in it belong to the Almighty, the role of humankind is no more than that of caretakers. Even so, humankind has been granted an awesome responsibility, one which, in the poetic language of the Qur'an, even the mountains dared not accept. The terms of this stewardship are that the Almighty allows humankind the use of the physical universe, hopefully for good (though possibly for evil? because humans have the ability to choose), and in return humankind agrees to be accountable for how the physical universe is used.

This agreement is the foundation of all worldly justice, and this leads to the Shariah or religious law which includes guidelines for using the Almighty's property for profit and acceptable gain. Unjust enrichment, according to the Shariah, may take many forms; but the most iniquitous of all is enrichment at the expense of others, and this includes lending for profit.

Money lending and financing belong to two entirely different spheres; one is charity, pure and simple, and the other is business. The repercussions of this bifurcation range far and wide, and shape much of what is unique about Islamic notions concerning economy and society. Equity investing offers Muslims the opportunity to profit, not by lending at a guaranteed rate of return, but by sharing in ownership, and thus commiting to share in the risks associated with ownership. Such a commitment is clearly in consonance with the concept of stewardship, and this, more than anything else, explains how the Islamic prohibition against interest is as much a moral matter as it is a legal one.

http://muslim-investor.com/answers/riba-prohibition-rationale.html

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 07 January 2010 at 2:37am

Global Financial Crisis: Could Islamic Finance Solve the Problem?

This paper by Dr. Umer Chapra, a leading expert of Islamic Economics, tries to determine the primary cause or causes of the financial crises that have plagued almost every country around the world over the last three decades. Of particular significance are the 1998 LTCM breakdown and the prevailing subprime mortgage crisis in the United States which is more severe than any in the past and has had devastating spillover effects worldwide.

It argues that one of the major causes of these crises is the lack of adequate market discipline in the financial system. This leads to excessive lending, high leverage and ultimately the crisis. Unwinding gives rise to a vicious cycle of selling that feeds on itself and leads to a steep decline in asset prices accompanied by bank failures and economic slowdown. Risk-sharing along with the availability of credit for primarily the purchase of real goods and services and restrictions on the sale of debt, short sales, excessive uncertainty (gharar), and gambling (qimar ), which Islamic finance stands for, can help inject greater discipline into the system and, thereby, substantially reduce financial instability

http://www.islamonline.net/servlet/Satellite?c=Article_C&cid=1262372073198&pagename=Zone-English-Living_Shariah/LSELayout

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 12 January 2010 at 2:23am
Report: North America next big growth market for Islamic Finance

As world economies struggle to move from recession to recovery, Islamic finance is being hailed as a possible alternative to risk-prone conventional financial services – even in the capitalist heartlands of the USA and Canada. Extensive evidence of this shift in action is presented in a new report called Islamic Finance in North America 2009 published tomorrow by Yasaar Media and co-published by Codexa Capital, UM Financial Group, King & Spalding, and Doha Islamic.

The report explores for the first time the true depth of penetration of Islamic finance in both the USA and Canada and concludes that both core North American markets could be set for a boom.

According to the report Islamic finance in North America has developed along two quite separate paths. The first path focuses on retail Islamic finance and centres mostly on home financing products and credit cards. The second path involves a number of high profile GCC-based Islamic investment banks and their deployment of hundreds of millions of dollars in private equity and real estate developments in North America.

With many global markets showing the first signs of emerging from the worst of the financial crisis, North America could be set to witness a surge in Islamic finance activity along both paths as institutions and individuals look for alternative financing propositions that shun the use of excessive risk. The significant inroads that Islamic finance has made in both the USA and Canada look set to be expanded upon in the years ahead.

Paul McNamara, editorial director of Yasaar Media, says, ‘Investors and businesses alike are still smarting from the worst ravages of the global recession and they are looking for a lower-risk alternative. Islamic financing structures are inherently more risk averse than their conventional counterparts and as a result such structures are now being studied closely in all sorts of markets – including highly sophisticated markets like those of North America’.

These important markets are examined for the first time as growth areas for Islamic finance. ‘Both the USA and Canada are home to some very experienced Islamic finance firms – both on the financial and the legal side – and many market observers are now watching closely to see how they will help accelerate development of Shariah financing in North America. These are lucrative markets and it makes sense that GCC- and Malaysia-based Islamic finance houses are watching them with great interest’, according to Mr. McNamara.

http://www.menareport.com/en/business,industry/254003

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 16 January 2010 at 1:34pm
The Question of Interest

The word “interest” refers to the fixed increase demanded over and above a sum of loan.

At first sight, there does not seem to be any difference between it and rent. However, a deep deliberation reveals the stark difference between the two: rented out items can be used while keeping them intact; however, money cannot be used in this way; it is in fact used up and after expending it, it is needed to be produced again.

Therefore, if something in addition is demanded over it, this in fact becomes an oppression. Since this difference between interest and rent is subtle, and human intellect can falter in understanding this difference, the Almighty has delineated the truth in this matter: In the sharī‘ah he has given mankind through his prophets, He has informed them that demanding a fixed increase over the lent amount is unjust and hence not allowed. It is for this very reason that interest has remained prohibited at all times and in all the sharī‘ahs revealed by the Almighty. The Qur’ān has explicitly forbidden it. There is no difference of opinion in this matter.

However, the religious legality of the system of banking which prevails in our societies has recently come under discussion. It is contended that since the bank only receives a portion from the profit of a commercial venture it had financed on the basis of a loan hence the very reason for which interest was regarded as prohibited does not exist in the banking system. This view has been put forth by some scholars of Egypt and Syria. Mawlānā Wahīd al-Dīn Khān (b. 1926 AD), a celebrated scholar and preacher from India too, has corroborated it to some extent in his book Fikr Islāmī. In my opinion, this view of the scholars can be considered intellectually convincing; however, it is essential for this that the following remedial measures be introduced in the banking system.

Firstly, if a commercial venture financed by a bank loan runs into losses or needs to be discontinued for some reason, the demand for profit by the bank should cease that very day. It should only demand the principal amount.

Secondly, if things are being sold on installments, then until these installments are complete, the bank should remain a partner in the ownership of the sold item, fulfill the rights of ownership and receive rent on it.

Thirdly, in a loan given for non-commercial purposes except for inflationary adjustments, no interest should be demanded on it.

An important issue relates to paying interest on loans acquired for personal and commercial needs. In other words, there are people who do not devour interest but are forced to pay it on such loans. It is generally thought that paying interest too is prohibited in the same manner as consuming interest is. Our scholars also hold this view. In reality, there is no basis of this opinion in the Qur’ān and Hadīth.

Not at one place has the Qur’ān condemned people who pay interest; it has, in fact, regarded them to be the oppressed; it has also urged the lenders to give respite to such borrowers if they are facing some financial constraint. No doubt, in a narrative, those who make others devour interest are also regarded to be equal criminals;1 however, people have failed to understand the real meaning of this narrative. It refers to people who are the agents of professional lenders and in this capacity hunt for potential customers for their masters. As such, they are guilty of co-operating with them in this sin. In other words, this narrative does not relate to people who borrow on interest.

http://islamonline.com/news/articles/79/The-Question-of-Interest.html

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 18 January 2010 at 1:49am

France seeks Islamic financial system

PARIS -- A strictly secular European heavyweight, France is seeking to adopt the Islamic financial system just as a prelude to becoming a European center for Islamic economy.

Although no tangible moves have been made in this respect, the French government is determined to enact laws giving Islamic finance access to France. This has been already confirmed by several senior French officials.

Speaking to KUNA, several economists said France is now in pursuit of all political, media, legal, legislative and banking tracks that could lead to relevant practical moves.

This strategic project is part of France's plan to find alternative and complementary alternatives to conventional capitalist finance, which can shape the country's official financial policies in the event of global cash shortage.

At the beginning, France came across with a methodological problem that lies in how to handle the Islamic financial system, having been left with a couple of options; either through finding French legal and legislative items that are similar to Islamic ones or through the enactment of fresh laws in this respect.

Following serious deliberations with all parties concerned, the first option was handpicked.

According to recent studies, Islamic financial investments in France are estimated at roughly USD 120 billion.

Although a relevant draft law was turned down by the Constitutional Council in form, but not in content, French Minister of Economy, Industry and Employment Christine Lagrade made it certain that the government would not backpedal on its plan to adopt the Islamic financial system.

The French minister's advisor Thierry Dissaux told KUNA that the government would introduce amendments to French legal and tax systems in order to match Islamic financial principles.

Mohamed Nouri, chairman of the French council of Islamic finance, told KUNA that France was still in the stage of preparations for adopting the Islamic financial system.

But, he expected that paris would take the first step in this respect this year by issuing Islamic sukuk (bonds) for leading Islamic investment banks.

For his part, secretary-general of the Arab-French commercial chamber, Saleh al-Tayar, also speaking to KUNA, said several French banks were currently operating in Arabian Gulf countries in line with Islamic Sharia'.

But the French drive to open up to Islamic finance is upsetting some politicians in the country Islamic Sharia' forbids Muslims from usury, receiving or paying interest on loans

Source



Edited by Al-Cordoby - 19 January 2010 at 1:37pm
Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 23 January 2010 at 1:20pm

French economy to be main pillar of Islamic system - official

Secretary General of the Franco Arabe Chamber of Commerce Dr. Saleh Al-Tayyar said here Friday that the French economy would be a major pillar of the Islamic finance system.

Speaking to KUNA, Al-Tayyar said senior French officials were convinced that Islamic finance was a successful way to finance and attract foreign investments.

France had all the abilities and tools to enter the Islamic finance field, he stressed, adding that the European country's political relations with the Arab world were excellent.

He noted that USD 650 billion around the world are managed by Islamic financial portfolios.

He said that the chamber was leading in marketing Islamic finance, as it held the first forum on Islamic finance in France in 2006.

The chamber established, in cooperation with the Islamic Development Bank (IDB ), the French Institute for Islamic Finance (FIIF) to stress the concept of Islamic finance in France, adding that the institute held more than 10 training courses in one year, he pointed out.

Al-Tayyar said that France could implement the Islamic financial system on its investments in African countries.

He noted that Islamic investors could benefit from the large number of Muslims in France, which reached five million, through providing loans that are compatible with the Islamic finance, He emphasized that French fears of the Islamic financial system were a result of relating the system to Islamophobia and to fearing it would threaten the sectarian system of the European country.

The concerns are baseless as a sectarian country would not be an obstacle to the system which is based on partnership, he highlighted.

He said he expects that the system would be implemented in France during the first half of 2010, pointing out that there will be three licenses for opening panches of Islamic banks in France.

Source ...

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 26 January 2010 at 1:45am

Luxembourg Aims to Become Hub for Islamic Finance

25 January 2010

Luxembourg took an important first step toward developing the Duchy into the latest European hub for Islamic finance, especially Islamic capital markets, when it published last week a new tax circular on the treatment of a whole range of Islamic finance products including murabaha, musharaka, mudarabah, istisna, ijarah, ijarah wa Iktina and sukuk (Islamic bonds).

A circular from the Director of Contributions, the Luxembourg tax authority, describes the major principles and contracts of Islamic finance and their respective tax treatment. According to the preamble of the Circular, "Islamic finance involves financial instruments used by investors who wish to manage their investments observing the values of Islam. The objective of Islamic finance is to share profits and losses between those who provide the capital and those who use it."

The Director of Contributions identifies two Shariah principles that merit particular attention: "Third party" capital providers (such as banks for instance) cannot in principle play a passive role, but must in contrast act as true "partners"; and the prohibition on lending money (with interest) to third parties. The development and listing of these products must rely on real physical assets (real estate, infrastructure projects or even commodities, like oil, aluminum or wheat). They may not rely on other financial products. Any profit from other financial products, particularly interest, would be considered usury (riba), and as a consequence should be purified in accordance with a criteria generally applicable in Islamic finance. ...

More details ...



Edited by Al-Cordoby - 26 January 2010 at 1:46am
Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 29 January 2010 at 9:43am

Prominent Scholars Discuss Islamic Finance Solutions

Kingdom of Bahrain, Manama, 29 January 2010, On 25 January 2010, the Bahrain Financial Exchange (BFX ) and Bursa Malaysia, organised a forum to discuss matters related to Islamic liquidity management and financing and in particular contemporary issues relating to commodity Murabaha transactions and Tawarruq practices. This forum was part of a two-day event marking the inauguration of a commercial relationship between the two exchanges. The underpinning for this relationship is to provide financial products to Islamic market participants and strengthen bilateral ties between both organisations.

The event, held at the BFX offices, attracted over 50 key players from the Islamic financial markets and was graced with the attendance of three of the most eminent Shari'ah scholars within the industry. Dr. Mohd Ali Elgari, Sheikh Nizam Yaqubi and Dr. Aznan Hasan participated with the objective of providing insights and expert opinion on the concept of Tawarruq and its application and practices to facilitate Islamic liquidity management and financing.

Raja Teh Maimunah Raja Abdul Aziz, the Global Head of Islamic Markets, Bursa Malaysia, who was also the moderator for the panel discussion ed, "The use of Tawarruq and its role in money markets and risk management is important in further developing the industry and through discourses such as this, we hope to provide industry participants with greater understanding of the concept from a Shari'ah perspective as well as its commercial importance."

The event also introduced a newly developed regulated Islamic commodity trading platform to industry participants specifically designed to facilitate Islamic financing and liquidity management aimed at tightening the application and enhancing integrity of Tawarruq practices.

Tawarruq is a sale of an asset to a purchaser on deferred payment with an onward sale by the purchaser to a third party on cash.

Arshad Khan, Board Director of the BFX , highlighted the importance of this event, "It gives me great pleasure to host such a high profile panel and audience from the Islamic finance community. I am confident I can say from all involved, that this was an extremely informative and thought provoking discussion with the practitioner community. I thank Dr Elgari, Sheikh Nizam and Dr Hasan for all their efforts and contributions in making this event a great success."

More details ...

Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
Al-Cordoby  
Admin Group
Admin Group
Avatar
Moderator
Religion: Islam(Muslim)
Posts: 26269
Forum Rating: 159
Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 30 January 2010 at 12:00pm

India Banking Reforms Focus In Islamic Finance

28 January 2010

India is planning to overhaul regulation of its financial system to attract investments from the Gulf and to encourage its largely unbanked Muslim population to save money in a way compliant with their religion, a senior government adviser has said.

K Rahman Khan, deputy chairman of India's upper house of parliament, told the Financial Times that the ruling Congress party is proposing reforms to the finance ministry, the Reserve Bank of India and Securities and Exchange Board of India to allow for the introduction of Islamic financial services.

"Islamic finance has been growing at a steady pace and it is the most attractive form of alternative [banking] system in the financial sector, it makes no sense for India to exclude itself from this success story," said Mr Khan.

India, with more than 150m Muslims, has the world's largest Muslim minority. Many Muslims are discouraged from banking with commercial banks by religious proscriptions against interest. Some are wary of investing to avoid financial involvement with gambling or alcohol companies, according to the Institute of Objective Studies, a research group focusing on the Muslim community.

The southern state of Kerala, which has a large Muslim population and many workers overseas in the Gulf, is backing the launch of a company that would offer Islamic banking services, but its opening has been held up by a legal challenge from a former government official who argues the venture would violate constitutional provisions on religious neutrality.

The Congress party's report, which Mr Khan said had been endorsed by Manmohan Singh, the prime minister, falls short of supporting the creation of a full-fledged Islamic banking sector at a time when regulators are shy of liberalisation.

Mr Khan said that the "main goal at the moment is to help set up non-banking institutions that will allow Indian citizens to save and invest in a sharia-compliant manner and to attract foreign direct investment from the Gulf...At a later stage we will be looking into setting up Islamic banking."

Some western and emerging economies are taking steps to facilitate Islamic investment. China, with 80m Muslims, recently awarded its first licence for Islamic banking to Bank of Ningxia, a move that could pave the way for sharia-compliant financing in the rest of the country.

India is keen to attract a greater share of Gulf investment. The United Arab Emirates is already one of India's largest trading partners, while about 4.5m Indians work in the Gulf. political and business leaders in the region have expressed their enthusiasm for larger investments in the Indian economy.

Sheikh Nahyan bin Mubarak Al Nahyan, the UAE's minister of education and a leading Arab investor, said: "While countries around the world continue to feel the pinch of the economic downturn, India's economy is buoyant and in relatively good condition. Investment opportunities abound in this vast, innovation-driven country."

By James Fontanella-Khan in Mumbai and James Lamont in New Delhi&

© Financial Times 2010

Source



Edited by Al-Cordoby - 02 February 2010 at 1:30am
Think Win-Win for a better world for all...

My Blog
Muslim Heritage

No Guest-Voting   IP IP Logged
<< Prev Page  of 22 Next >>
Post Reply Post New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Bulletin Board Software by Web Wiz Forums version 8.03
Copyright ©2001-2006 Web Wiz Guide
Disclaimer
The opinions expressed by members of the Whyislam Forum do not necessarily reflect the beliefs of the Whyislam Team, or any of its subsidiaries, or parent organizations.