Wednesday, June 06, 2012

World Bank: Islamic finance full potential can be realised

KUALA LUMPUR: The full potential of Islamic finance could be realised if several challenges are to be addressed, according to World Bank managing director Dr Mahmoud Mohieldin. The challenges that needed to be addressed include improving regulatory oversight, rebalancing tax treatment, strengthening insolvency framework, promoting standardisation, ensuring adequate liquidity and establishing sound risk-management practices. “Lack of standardisation and cohesion in Islamic finance, especially in sukuk products, hinders the growth potential of the industry and deprives the market of an organised structure to facilitate secondary trading and liquidity. For example, the industry would benefit from more widely accepted benchmarks and indices,” Mahmoud said in his presentation entitled: Taking Islamic Finance to the Next Level: Key Challenges and Opportunities organised by the International Centre for Education in Islamic Finance (Inceif). Mahmoud said innovation and knowledge sharing between various market players were essential to facilitate the standardisation and unification of global markets for Islamic financial products. In many countries, levelling the playing field with respect to the tax treatment of financial instruments was an urgent need. Conventional debt often received advantageous tax treatment, while some Islamic finance products like faced double taxation, he said “Malaysia and Thailand took fundamental steps to ensure that Islamic financial transactions operate on a level playing field and are treated equally for tax purposes,” he said. Meanwhile, Inceif signed an agreement with the World Bank to develop education and executive programmes in Islamic finance. The collaboration, which aims to foster the development and expansion of sustainable and equitable Islamic finance worldwide, is focused on sharing of research, strengthening capacity, sharing of case studies and sharing of knowledge. Its president and CEO Daud Vicary Abdullah said Inceif’s position as a global knowledge leader in Islamic finance would be strengthened with this collaboration. source: http://biz.thestar.com.my/news/story.asp?file=/2012/5/1/business/11206006&sec=business

Commendable growth of Islamic finance

MALAYSIA made further progress as it Islamic financial system transitions to become an international Islamic financial centre, recording commendable growth despite the volatile international financial markets and uncertainties clouding the global economy. Total assets in the Islamic banking sector increased by 23.8% to RM434.6bil to account for 22.4% of total banking system assets as at end-2011. The volume of Islamic foreign currency business conducted by international Islamic banks and international currency business units within licensed Islamic banks has also increased substantially over the years. In the takaful sector, total assets of takaful funds increased by 15.8% to RM17bil as at end-2011, while total takaful contributions accounted for 13% of total premiums and contributions in the insurance and takaful industry, up from 12.4% in 2010. Malaysian Islamic banks and takaful operators have also attained global recognition, with 39 institutions ranked among the world’s top 500 Islamic financial institutions, and 21 institutions within the top 100 in The Banker Magazine’s latest rankings published in 2011. Malaysia also continued to dominate the global sukuk market and remains a top investment destination for Islamic funds, with sukuk issued in Malaysia accounting for 73.2% (2010: 72.5%) of global sukuk issuances in 2011. In addition, outside the Gulf Cooperation Council region, Malaysia accounted for the highest amount of outstanding US dollar-denominated sukuk globally. In developing a comprehensive Islamic financial sector, priority has been accorded to developing a deep and liquid Islamic financial market that is able to mobilise funds effectively and efficiently, in accordance with syariah principles. An important catalyst for this has been innovations in financial market instruments. In June 2011, the Wakala Global Sukuk amounting to US$2bil was issued by Wakala Global Sukuk Bhd on behalf of the Government. Bank Negara Monetary Notes-Istithmar was issued in 2011 to increase the diversity of Islamic instruments in the Islamic money market and provide additional avenues for market participants to manage liquidity more efficiently. The syariah-compliant Exchange Traded Funds, an innovative product launched in 2008, received an additional boost of RM200mil in seed funds as part of efforts to broaden the options available for investments of Islamic portfolio funds. These initiatives made important contributions to the promotion of vibrant and liquid Islamic financial markets to meet the varied needs of investors. source: http://biz.thestar.com.my/news/story.asp?file=/2012/3/22/business/10957041&sec=business

Seragamkan kewangan Islam

Oleh SARAH NADLIN ROHIM bisnes@utusan.com.my KUALA LUMPUR 30 April - Penyeragaman sistem kewangan Islam boleh dilakukan dengan mengambil kira fleksibiliti dalam menangani isu perbezaan budaya, cara dan keutamaan, kata Pengarah Urusan Bank Dunia, Dr. Mahmoud Mohieldin. Katanya, apa yang penting adalah perkara asas dalam kewangan Islam yang tidak boleh diubah kerana ia telah ditentukan syariah. "Namun perkara-perkara kecil boleh lagi diubah dengan memberi sedikit kelonggaran, memandangkan perbezaan pendapat berlaku di kalangan para pemikir Islam. "Ia boleh dilakukan dengan duduk berbincang dan mencari titik keserasian bagi memudahkan proses penyeragaman tersebut dilakukan," katanya. Beliau berkata demikian selepas menyampaikan ceramah umum anjuran Pusat Pendidikan Antarabangsa dalam Kewangan Islam (INCEIF) dan majlis memeterai memorandum persefahaman (MoU) antara Bank Dunia dan INCEIF di sini hari ini. Hadir sama Gabenor Bank Negara Malaysia, Tan Sri Dr. Zeti Akhtar Aziz dan Presiden dan Ketua Pegawai Eksekutif INCEIF, Daud Vicary Abdullah. Tambah Mohieldin, penyeragaman itu perlu terutama bagi institusi kewangan yang ingin mengembangkan sayap perniagaan melepasi sempadan. "Apa yang penting adalah penerimaan semua pihak mengenai standard perundangan Islam serta meneruskan perkembangan perniagaan sesuatu institusi kewangan," jelasnya. Terdahulu, Bank Dunia dan INCEIF telah memeterai MoU bagi menjalankan kerjasama dalam menyemai perkembangan dan pembangunan kemapanan kewangan Islam di seluruh dunia. Ia akan memberi fokus kepada empat strategi iaitu berkongsi penyelidikan, mengukuhkan kapasiti, berkongsi penyelidikan kes serta berkongsi pengetahuan. Mohieldin berkata, kewangan Islam telah berkembang sejak kebelakangan ini dan Malaysia merupakan antara negara yang terlibat dalam mengukuhkan ekosistemnya melalui penubuhan institusi seperti INCEIF. sumber: http://www.utusan.com.my/utusan/info.asp?y=2012&dt=0501&pub=utusan_malaysia&sec=Ekonomi&pg=ek_03.htm&arc=hive