Sukuk (Islamic Bonds)

Sukuk is the Arabic name for a financial certificate but can be seen as an Islamic equivalent of bond. However, fixed-income, interest-bearing bonds are not permissible in Islam. Hence, Sukuk are securities that comply with the Islamic law (Shariah) and its investment principles, which prohibit the charging or paying of interest. Financial assets that comply with the Islamic law can be classified in accordance with their tradability and non-tradability in the secondary markets.

Conservative estimates suggest that over US$500 billion of assets are managed according to Islamic investment principles.

Sukuk (Arabic: صكوك‎, plural of صك Sakk, "legal instrument, deed, check") is the Arabic name for a financial certificate but can be seen as an Islamic equivalent of bond. However, fixed income, interest bearing bonds are not permissible in Islam, hence Sukuk are securities that comply with the Islamic law and its investment principles, which prohibits the charging, or paying of interest. Financial assets that comply with the Islamic law can be classified in accordance with their tradability and non-tradability in the secondary markets.
Conservative estimates by the Ten-Year Framework and Strategies suggest that over $700 billion of assets are managed according to Islamic investment principles. Such principles form part of Shari'ah, which is often understood to be ‘Islamic Law’, but it is actually broader than this in that it also encompasses the general body of spiritual and moral obligations and duties in Islam.

Sharia-compliant assets worldwide are worth an estimated $500 billion and have grown at more than 10 per cent per year over the past decade, placing Islamic finance in a global asset class all of its own. In the Gulf and Asia, Standard & Poor's estimates that 20 per cent of banking customers would now spontaneously choose an Islamic financial product over a conventional one with a similar risk-return profile.

With its Arabic terminology and unusual prohibitions, Sukuk financing can be quite mystifying for the outsider. A good analogy is one of ethical or green investing. Here the universe of investable securities is limited by certain criteria based on moral and ethical considerations. Islamic Finance is also a subset of the global market and there is nothing that prevents the conventional investor from participating in the Islamic market.

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Bahrain Plans to Open Islamic Bank in Russia

On December 2,2008 in Moscow under the patronage of the Chamber of Commerce and Industry of the Russian Federation and with the support of the Russian – Arabic Business Council the Russian – Bahrain Business Forum took place, commemorated to the official visit of the King of Bahrain Hamad Ben Isa Al Halifa to the Russian Federation. Russian and Bahraini businesses took part in the Forum.

In his greeting speech the minister of industry and trade of Bahrain Hasab Ben Abdalla Fahro stated that he put high hopes on the results of the present Forum as he considered that Russian and Bahraini businessmen had vast space for cooperation.

The Chairman of the board of Directors of CCI of Bahrain Isam Abdallah Fahro noted that the financial crisis notwithstanding its negative consequences is the time for actions. Today if the best time for development the bilateral trade relations. The representatives of Bahraini delegation in theirs presentations highlighted many advantages for foreign investors in Bahrain, such as favourable tax regime, equal terms and conditions for native and foreign businesses and law costs of operations.

Deputy Minister of economic development of the Russian Federation S. Voskresenskiy in his speech informed the foreign guests of the possibilities of making business in Russia. He also noted that Russia has a most liberal currency regime. And in future a special attention on the part of the state will be made to the private – public partnerships.

Special attention was raised by the presentation of the chairman of the Board of Directors of the bank “Ismar” Mr. Haled Djanahi. In his speech he proclaimed the intention to open an Islamic bank in Russia with a branch of it in Bahrain .

In the Forum Russia Mufties Council was represented by the authorized on Halal standard Jafar Azizbaev and head of Economic programmes department Madina Kalimullina.

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iB Award, as the Manifestation of Central Bank Appreciation Toward Islamic Banks

Selasa, 10 Pebruari 2009

Jakarta (10/2). At the last day of Festival Ekonomi Syariah 2009 (Islamic Finance Exhibition) at Jakarta Convention Centre (JCC) Senayan, Bank Indonesia has presented the iB award, whereas Bank Syariah Mandiri was the winner for 2 catogories, human resources development and productivity outlet, while the winner for the best market share was BNI syariah and the winner for best Quality was CIMB Niaga syariah.
The iB (Islamic banking) award is the manifestation of appreciation from Bank Indonesia as the Central Bank toward Islamic Bank's performance in applying the Islamic Finance concepts in Indonesia.
Apart from iB award, there were other awards presented for the best kiosk of banking sector where the winner was CIMB Niaga syariah, and from non banking sector, the best kiosk winner was Data scrip and for the visitor favorite kiosk won by Bank Muamalat Indonesia. (nad/Nibra pkesinteraktif)

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Excellent Career

Bank Negara Malaysia as the Central Bank, has the envious task of leading and molding the growth and development of the nation’s financial system. We are committed to excellence in promoting monetary and financial system stability and fostering a sound and progressive financial sector to achieve sustained economic growth for the benefit of the nation. Over the years our roles and responsibilities have evolved and part of the growth includes our ability to attract the most intelligent and talented group of people in the nation. Be a true asset and rise to the challenge by applying to the job below.

Senior Executive - Islamic Banking & Takaful (Shariah)
(Kuala Lumpur - Head Office)Responsibilities:-->
Key Responsibilities
To assist Manager to develop a comprehensive Shariah compliance framework, provide Shariah advisory services to relevant stakeholders, conduct applied Shariah research and undertake effective measures in ensuring all Islamic financial products and operations are compatible with Shariah;
Undertake the administrative works as the Secretariat for Shariah Advisory Council of Bank Negara Malaysia;
Assist Manager to conduct research in the emerging Shariah issues pertaining to the assigned area of applied Shariah contracts in Islamic finance;
Assist Manager to draft and produce impactful Shariah resolutions endorsed by the Shariah Advisory Council;
Assist Manager to provide Shariah advisory services relating to product proposals to ensure Shariah compliance;
Assist Manager to provide sound Shariah inputs for policy formulation in Islamic finance;
Assist Manager to undertake projects and ad-hoc assignments, as and when required, such as drafting speeches, answering parlimentary questions and responding to public queries on Shariah matters in Islamic banking and takaful; and
Assist Manager to coordinate Shariah harmonisation programs at regional and international levels.
Requirements:-->Our Requirements
Possess a recognized Bachelor’s Degree in Shariah / Law / Islamic Banking / Business Administration with at least a 2nd Class Upper or CGPA of 3.00 and above;
Credit in Bahasa Malaysia in SPM / SPMV or equivalent;
Good command of both written and spoken English and Arabic;
Knowledge in Muamalat is an added advantage;
Resourceful, hardworking, self-motivated, committed, and highly organized;
Good interpersonal skills and able to interact with people at all levels; and
A Malaysian citizen aged 35 and below.Applicants should be Malaysian citizens or hold relevant residence status.
Bank Negara Malaysia is committed to the continuous career growth of our talents. The rewards we offer include:
A challenging and rewarding career;
A competitive basic salary to commensurate with skills and experience;
Comprehensive medical coverage, insurance and other benefits that are amongst the best;
Continuous learning opportunity locally and abroad through full scholarship or training program.

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IDB & IFSB Meet to Reduce Liquidity Gap Faced by Islamic Financial Services

IDB - Jeddah,27.1.09

In a collaborative effort between the Islamic Development Bank and the Islamic Financial Services Board (IFSB), a meeting at IDB headquarters in Jeddah was held recently to discuss liquidity management issues in the Islamic financing sector. A number of key issues were discussed during the one day meeting comprising liquidity management, institutional development, and the role of regulatory and organizing bodies.

The meeting called for the formation of a supervisory board that would work towards developing markets, products and institutions to enhance liquidity for the Islamic Financial Services. The board members will be chosen from the financial services institutions and supported by the IDB. The meeting also recommended the formation of a task force to develop a strategic and operational framework that would facilitate the development of the market for shariah (Islamic Law) compatible products. It was highlighted that the role of these markets should not be limited to providing funding on just a national basis but should also look into dealing with liquidity at a local as well as an international level through an integrated framework.

The meeting was attended by a large number of delegates from a number of central banks and international organizations including the World Bank, the International Monetary Fund, shariah scholars, as well as a number of institutions that provide Islamic financial services. On behalf of the IDB President, Dr. Abdul Aziz Alhinai, Vice President of IDB assured the meeting that since its inception, the Bank had special interest for promoting and developing Islamic financial instruments.

The IDB, along with a few of its strategic partners established a number of institutions with the objective of laying the foundations for these shariah compatible products.

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The President Encourage the acceleration growth of Indonesia's Islamic Banking System

Jakarta (5/2) In respond to the positive development of Indonesia’ Islamic banking system, The President, Mr. Susilo Bambang Yudhoyono (SBY) has expressed his support for the acceleration growth of Islamic banking system in this country at the Festival Ekonomi Syariah (FES)- the Festival of Islamic Finance at JCC Senayan – Jakarta in the opening ceremony yesterday,(4/2).

The Islamic banking assets, in year 2003 it has increased to IDR 5.71 trillions, in year 2007 it has increased to IDR 28.1 trillions and in year 2008 it has increased to IDR 36.85 trillions.

“Apart from that the Islamic financing has grown as well, in year 2003, it was IDR 5.3 trillions, in year 2007 it was IDR 27. 94 trillions and in year 2008 increased to IDR 38.19 trillion” said the President with a nice smile.

The establishment of Islamic banking in Indonesia has reminded the President that many people was wondering whether the Islamic banking system could develop and growth and co-existed with it conventional counter part? Many people were also wondering if the Islamic economic system can be accepted by our multifaceted community?

For the President those kind of questionnaires are considered to be normal, since in so far the Indonesian community is used to deal with the conventional system, however in line with the changes and the awareness of Islamic community to have the willingness to apply the Islamic economic concept, with the support from the government in providing the opportunity wide-open, therefore the Islamic finance transactions will be rapidly developed.

“In Islamic banking system history, we must not forget the immense support from the Indonesian Council of Ulama or Majelis Ulama Indonesia (MUI) and the association of Indonesia’s Muslim scholars or Ikatan Cendekiawan Muslim Indonesia (ICMI), which have the initiative of establishing and developing the Islamic Financial Institution in Indonesia, by assisting the establishment of Baitulmaal Waa Tamwil (BMT), Islamic banks, and Islamic insurances” exclaimed the President.

In line with the development of Islamic banking system, the President urged the Islamic Bankers to positively respond to the growth of Islamic banking system as one supporting aspect to the National economic and hope that Islamic banking system is still supporting the production sector. (Agus Y/Nibra www. pkeinteraktif.com)

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