1. How much the concept of Islamic Banking has penetrated in Pakistani society over the   last decade?

Islamic banking is a fast growing industry world over. Worldwide growth rate is more than 15 per cent while it is about 40 per cent in Pakistan. With every passing day, its penetration in every society is increasing, covering more and more areas. The developments during the last ten years in the field have drawn attention of the people on individual level and in business and corporate sectors. But our ratio is low. Therefore, when we show it in figures it is fewer. However, our growth rate is very high. Trends are changing and people are coming to Islamic Banking. People wish to join Islamic banking and they try and if they are satisfied, they decide to adopt it completely. We need to spread awareness. Islamic banks are doing well in this respect, however, this needs continued efforts.

2. You mentioned that the Islamic banking is spreading into more and more areas, then, are there any obstacles which the sector facing in its way?

According to the principle of economics, the expansion invites obstacles. When you introduce a new product in the market, the problems also surface because the product is in the evolutionary phase. So, new problems are emerging as the Islamic banking is expanding. For example, we face an increasing problem of HR with the opening of the new branches. The need of human resources is growing. Actually, the HR is not growing as fast as the new branches are opening. A person cannot become an Islamic banker just by studying a few books. To become an Islamic banker one needs to spend life in the field and gain experience. We do not have enough trained people, although, they are coming from traditional banking but again it is an issue of experience. The major issue faced by the Islamic banking is of insufficient human resources. We need suitable people, and it will take time to the problem to be solved.

The second problem is that with the rapid increase of our deposits and opening of new accounts, we are facing liquidity crisis. People are depositing money, but unfortunately, we have less opportunities of investment due to country situations. We are having difficulty in lending loans, as factories are being closed. Therefore, the problem of surplus liquidity is standing in front and we have fewer opportunities to utilize it. The capital market of Islamic banking has not gained the maturity and stability level that the money market of the conventional banking has gained.

Thirdly, some legal issues are also surfacing. For example, when cases are referred to courts, they dealt with under the same laws that are functional for conventional banking. If the products are Islamic then the laws should be made accordingly. So we are in desperate need of legal framework. In addition to all this, there is an issue of taxation. This does not mean that these problems will last forever. The efforts for solving these problems are started as soon as they come forth. And these efforts are producing results.

3. How many of those who opt for Islamic banking feel satisfied and how many other way round?

People in very large numbers are resorting to Islamic banking. Some of them think that the conventional banking is haram and, therefore, just want to avoid it and get rid of it. They come to Islamic banking and feel satisfied.  Some others have some reservations about the Islamic banking, they come and we satisfy their queries and they accept the system. There are still some people who will not get satisfied at any cost.

I want to say that we cannot blame customers for not getting satisfied. Our banker should be held responsible. There are bankers who simple do not know to satisfy the customers, how to reply to their queries and how to explain Islamic banking. If a banker explains properly, he should be able to satisfy almost everybody. The customers belong to all these three kinds of people; however, we have a general impression that a large number of people is coming towards this system.

4. What is difference between Islamic banking and conventional banking?

There is no basic difference in these two. Only, in Islamic banking we follow Shariah laws while conventional banking does not care for them. Actually, we have removed the element of interest from the banking. We have the same products but the agreements behind them are in compliance with the shariah laws. It is not only the interest, but we have also taken care of other conditions. These are according to the shariah. There is just this difference, rest of the things have resemblance. A good example will help to understand the nature of the difference; a couple living together after nikah is justified and according to shariah while without nikah it is not.

5. Ulema have said that mere opening of an Islamic window in the banks running on interest system is nothing more than a deception. What do you say?

This is a common notion about the “Islamic window” but this is wrong. This is not the case that the same service is being provided by opening up another window in the conventional bank. State Bank had given three options and two of them became very popular. One option was that a new Islamic Bank be set up with all its system separate. The second option was that the conventional bank establishes its separate division. That Islamic banking division will run this bank independently. This was a concept of a bank within a bank. The conventional banks started the Islamic banking under this concept.

On another note, since Islamic banks could not open up a branch everywhere, they opened their windows in the existing branches of the conventional banks but these windows have completely separate system from that of the branches. The business of the Islamic window is run under the Islamic system. This arrangement facilitates customers do business with an Islamic bank having window within the branch of a conventional bank. This is not non-shariah. Earlier these two were mixed with each other, but it is not so now. Now the law says that to do Islamic banking a conventional bank has to have a license for Islamic banking. State bank barred those banks from doing so that were doing Islamic banking without license.

6. What is difference between the concept of Islamic banking of UBL Ameen and one window concept?

In 1985, some conventional banks might have done Islamic banking under one window with permission from State bank which means that they did banking in mode of Islamic transaction, however, later that was abolished. Now a completely separate bank has been established with the title UBL Ameen. We have a separate head office. We have separate books. We have told the conventional banks that if our client visits them, our man should deal him. Therefore, this is not window of conventional bank; it is window of UBL Ameen.

7. What were the issues that were in the way of provision of Islamic banking that UBL decided that a separate and dedicated Islamic bank was necessary to be set up?

Following the instructions by the State Bank, UBL started Islamic banking, like other banks. State bank set all the parameters for Islamic banking when UBL started Islamic banking. The rules included that the Islamic bank should be separate, there should be now interference of the conventional banking and there should be no segregated fund.

8. How was the UBL Ameen experience? And what products is it providing to cater the needs of the customers? 

Our experiment was successful. And it is expanding fast. Our network is getting large and the number of our books and clients is increasing. UBL is providing the products exactly in accordance with the shariah structures permitted by the State Bank. We have to get permission from the Shariah Board for any new product before introducing it. At present we are providing all the products, for deposits and for financing, that are approved by the State Bank.

URL: http://tribune.com.pk/story/375334/islamic-banking-is-a-fast-growing-industry/

Although there were eight banks, six asset management companies (AMCs) and three Takaful companies besides a number of other businesses which had established their stalls at the exhibition, booths set up by AMCs were by and large the main attraction.

A giant banner at the booth set up by JS Investments displayed in bold font the annual return – 40.23% – that its Islamic fund gave out in fiscal year 2011.

“That’s probably the highest return any mutual fund in Pakistan offered that year,” JS Investments Head of Corporate Communications Hassan Reyaz Khan said while talking to The Express Tribune.

The JS Islamic Fund investments are limited to asset classes approved by its Shariah Advisory Council while all companies under investment consideration are also screened for Shariah compliance.

As of February 2012, Pakistan’s mutual fund industry was worth Rs360 billion with about 25 AMCs operating in the country. Many of them have separate Islamic funds that invest in Shariah-compliant companies only.

The mutual fund industry grew by 44% during the first eight months of fiscal 2012, as its size was about Rs250 billion in June 2011.

In view of the low investment in the mutual fund industry in Pakistan – currently estimated at 0.49% of gross domestic product compared to India’s 2.74% – the government has offered incentives to salaried and non-salaried investors by reducing their tax liability through tax credits.

For example, according to JS Investments Country Head for Business Development Assad Hameed Khan, if a person invests Rs180,000 out of his total annual taxable income of Rs1,200,000 in the JS Islamic Fund, he can get a tax credit of Rs18,000 based on the applicable tax rate of 10%.

Therefore, in addition to the over 40% return on his investment of Rs180,000 – based on 2011 returns posted by JS Investments – the imaginary investor would have earned a tax credit of Rs18,000 in fiscal year 2011, resulting in net annual profit of Rs90,000 against an investment of Rs180,000 – a net return of 50%.

Earlier, while addressing the “meet the experts” session of the Islamic Finance Expo, Karachi Chamber of Commerce and Industry Acting President Younus Bashir said the growth of 17.5% in assets of Islamic banks last year was reflective of the sound.

He invited Islamic financial institutions to participate in the “My Karachi – Oasis of Harmony” exhibition, which will be held on July 13-15 at the Karachi Expo Centre to foster business-to-business linkages between domestic and global corporate players.

Bashir noted that Islamic banking and finance should be part of college and university curricula as well so that young people could understand its basic concepts better.

URL: http://tribune.com.pk/story/380889/islamic-finance-expo-asset-management-companies-steal-the-show/

The Islamic Development Bank is seeking partners to bring investment in a Shariah-compliant megabank to more than $1bn before the opening this year, allowing it to finance larger construction projects.
The financial institution, to be established with Riyadh-based Dallah Albaraka Group and the Qatari government, will issue securities that Islamic lenders can buy to manage excess funds, IDB president Ahmad Mohamed Ali said in a May 10 interview in Kuala Lumpur. The three parties signed a memorandum of understanding in April to set up the bank in Doha, Qatar, to fund roads, ports and power plants.
“An Islamic megabank will be a significant development,” Afaq Khan, Dubai-based chief executive officer of Standard Chartered’s Islamic unit, said in a telephone interview on Monday. “Such a bank would have the balance sheet, the capital and the underwriting capabilities to undertake significant projects of size.”
Sales of debt that pay returns on assets to comply with the religion’s ban on interest totalled $14bn globally this year, compared with $358bn issuance of non-Islamic bonds, according to data compiled by Bloomberg. Al Rajhi Bank, the world’s biggest Shariah-compliant lender based in Riyadh, Saudi Arabia, has a market capitalisation of $30bn, versus $159bn for HSBC Holdings, Europe’s largest bank.
“The main objective of this bank is to invest in big projects and to help Islamic banks manage their liquidity,” said IDB’s Ahmad. That is one of the biggest challenges facing lenders, he said.
In an effort to increase the range of Shariah-compliant instruments in the market, International Islamic Liquidity Management Corporation was established in October 2010 with a mandate to sell the industry’s first foreign-currency denominated bills. It was founded by 14 members including central banks in Malaysia, Saudi Arabia, and Qatar. The Islamic Development Bank, based in Jeddah, Saudi Arabia, and the Islamic Corporation for the Development of the Private Sector are also among them, according to the IILM website.
The IILM plans to kick-start the issuance with a sale of as much as much as $1bn of global Shariah-compliant dollar bills by the middle of this year, Bank Negara Malaysia governor Zeti Akhtar Aziz, who was previously chairman of the institution, said on March 21.

An initiative headed by Malaysia to set up Asia’s first Islamic megabank along with organisations in the Middle East has yet to materialise. Zeti said in an interview with Bloomberg in September that indications were that a licence would be granted in 2011. “The review of the applicants is still ongoing,” Bank Negara said in a statement on Friday.
There is no consensus that the industry needs a megabank, Megat Hizaini Hassan, a partner and head of the Islamic finance practice at Kuala Lumpur-based law firm Lee Hishammuddin Allen & Gledhill, said in an e-mail on Monday.
“The megabank may not necessarily be the best or only solution to the existing problems and issues in Islamic finance,” Megat said. “Funding of large-scale projects may be done by syndication involving several Islamic banks or by sukuk sales, while liquidity problems may be resolved via more issuance of short- or medium-term papers.”
Assets in the $1tn Shariah-compliant industry are projected to almost triple to $2.8tn by 2015, according to the Kuala Lumpur-based Islamic Financial Services Board, a standards setting body.
A shortage of sukuk has driven yields on global Islamic bonds down 30 basis points, or 0.30 percentage point, in 2012 to 3.69% on Monday, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index. That compares with an average of 4.16% last year, 5.87% in 2010 and 9.51% in 2009.
The difference between average sukuk yields and the London interbank offered rate, or Libor, widened two basis points on Monday to 252 basis points, the HSBC/Nasdaq index shows.
Global Shariah-compliant bonds returned 3.6% in 2012, according to the HSBC/Nasdaq index, while debt in developing markets climbed 5.5%, JPMorgan Chase & Co’s EMBI Global Composite Index shows.
Malaysia’s $444bn development programme to build railways, power plants and roads over a decade is boosting issuance in the world’s biggest sukuk market this year. Sales rose to a record 13.2bn ringgit ($4.3bn), adding to last year’s all-time high of 75.6bn ringgit, according to data compiled by Bloomberg.
Qatar plans to spend $88bn on building facilities as it prepares to host the soccer World Cup in 2022, the government announced in May last year.
“A megabank would certainly need to have a credible credit rating internationally and this in turn would create another avenue for Shariah-compliant liquidity to be effectively deployed,” Syed Abdull Aziz Jailani Syed Kechik, chief executive officer at Kuala Lumpur-based OCBC Al-Amin Bank, the Islamic unit of Singapore’s Overseas-Chinese Banking Corp, said in an e-mail on Monday. “A credible megabank would have catalytic benefits for the overall market.”

URL: http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=505800&version=1&template_id=48&parent_id=28

Deposits of Islamic Banks grew from an insignificant amount in 2002 to over Rs 400 billion in mid 2011, representing 8% market share of the entire deposits in banks.

With the development of the financial markets in the country, there was a need felt for new investment products to facilitate the growth and promotion of savings.

Mutual Funds industry has played an active role in providing new investment alternatives.

Presently, the stands at Rs 333 billion, in which the size of Islamic Funds is Rs 45 billion.

The market share of Islamic mutual funds has shown incredible growth over the period and has increased to 14% from 7.54% in mid 2008, also illustrated in the Figure below:

Need for an Islamic benchmark The index helps Shari’ah conscious investors to identify the Halal equity investments.

With the rapid growth and acceptance of Islaamic products in the market, a void was created for a benchmark that can accurately compare the performance of Islamic equity funds.

As a result, KSE-Meezan Index (KMI-30) was established by the collaboration between Al Meezan Investment Management Ltd (Al Meezan) and the Karachi Stock Exchange (KSE) in 2008.

Al Meezan, in consultation with Shari’ah Department of Meezan Bank, provides Shari’ah expertise, guidelines, skills and stocks screening towards the activities pertaining the re-composition of the Index; whereas, KSE provides maintenance and dissemination support for the index.

The index helps Shari’ah conscious investors to identify the Halal equity investments.

It also provides them with a suitable benchmark to compare the performance of their investments.

Besides tracking the performance of Shari’ah compliant equities, its construction aimed to increase trust of Shari’ah conscious investors and enhance their participation.

The following table lists the Islamic Equity Funds in Pakistan, all of which use the KMI-30 Index as a benchmark.

In addition, it is also used by five Islamic Balanced Funds and Islamic Asset Allocation Funds for benchmarking.

– We attempt to evaluate the performance of the KMI-30 Index against the other indices on Karachi Stock Exchange since its launch in 2008.

Some interesting facts emerge through this exercise:

Since inception, the KMI-30 index has provided a return of 41% to its investors.

During the same period, KSE-100 (which tracks the performance of the top 100 market capitalised companies) and KSE-30 (which tracks the performance of the top 30 most liquid stocks based on free float methodology) both underperformed considerably; and, in fact, provided negative returns.

The time when KMI-30 Index was launched concurred with a financial crisis that swept the global markets, which also affected Pakistan’s Capital Market.

Despite these setbacks, the KMI-30 has been able to outperform KSE-100 and KSE-30 by 42% and 60% respectively.

Let us illustrate this with an example.

We take three hypothetical passive investors, each of whom invested a capital of Rs 1,000 in the stock market at the start of the FY’08.

They chose to invest differently however.

Investor A invested in the KMI-30 index, while B and C invested in KSE-100 and KSE-30 respectively.

Investor A’s investment has grown to Rs 1,413.57 yielding 41%.

Investor B’s portfolio was worth Rs 991.97 (a loss of 1%) and investor C lost 19% of his investment, which was worth Rs 806.93.

It can be inferred from the same example that once recovery began in the market, KMI-30 index outperformed the KSE-100 and KSE-30 indices over the entire period.

At times, the gap widened substantially.

URL: http://www.brecorder.com/supplements/88/1187328/

The purpose of the visit was to meet senior officials and project managers of the Wadhwa Group, the joint partners and developers of the project and to see first-hand the progress made on the mixed use development project to date. MEDZ is GFH’s flagship project in India and is comprised of two core components – the Energy City Navi Mumbai (ECNM) and Mumbai IT & Telecom City (MITTIC) projects covering nearly 1,300 acres of prime development land at Navi Mumbai in the Indian state of Maharashtra.

The investors were also given an update on the exit plans. As part of the exit process, GFH recently commenced the payout of the first tranche of investment to its investors.

Alrayes said, “We are very happy to see the amount of progress that has been made to date on the Mumbai Economic Development Zone project after we put in a strategy to partner with a local developer in India.  This development is GFH’s flagship project in India, and our investors are keen to continue seeing progress updates as the work continues.  As part of our re-envisioned business strategy, we are committed to moving our existing infrastructure projects forward towards completion, and achieving successful exits from these projects for our investors.”

URL: http://www.cpifinancial.net/news/post/13917/gulf-finance-house-investors-visit-mumbai-economic-development-zone

The seminar was themed ‘Can Islamic Finance Focus on Productive Economic Activities to Promote Growth & Financial Stability’. President of the Islamic Development Bank (IDB) Group, HE Dr Ahmed Mohammed Ali was the keynote speaker.

The Deputy Governor forecast that Sharia-compliant banking could account for 15-20 per cent of Indonesia’s banking industry within 10 years, from just over four per cent currently. “We are confident Syariah (Sharia) finance will stimulate economic growth to a higher level and enhance the stability of the financial system,” he said at the opening of the Seminar in Bandung.

Indonesia’s Islamic finance assets were worth IDR 214 trillion ($23.2 billion), of which around 69.5 per cent are banking assets. Indonesia has 11 Sharia-compliant commercial banks, 24 Sharia bank business units and 155 Sharia-compliant rural banks (Bank Perkreditan Rakyat) with total assets of IDR 152.3 trillion (about US$16.5 billion).

Halim said Bank Indonesia is ‘very serious’ in its efforts to expand Islamic finance, especially banking, is confident that it could contribute greatly to economic growth, financial system stability and social well-being.

Issues discussed at the Seminar in Bandung included:

• enhancing the role of authorities in realizing the virtue of Islamic finance towards sustainable

economic development;

• revisiting current banking businesses and designing an enhanced banking model with optimal

support for the real sector;

• extending financial services to larger parts of society for more balanced and sustainable

economic growth;

• improving business values through Islamic finance (the preferred values and opportunities);

and challenges and opportunities in developing Sharia-compliant products to promote productive economic activity. Speakers and participants came from more than 11 countries including Turkey, UAE, Saudi Arabia, Bangladesh, Hong Kong, Bahrain, Thailand, Japan, Iran, Brunei, Malaysia, Singapore and Indonesia. The attendees include Board Member of the Central Bank of Turkey, Dr Lokman Gunduz; Head of BIS Asia Pacific, Dr Eli Remolona; Head of OREI, Asian Development Bank, Prof Dr. Iwan Jaya Aziz; the Governor of West Java, Dr (HC) Ahmad Heryawan; the Director General of the Indonesian Debt Management Office, Mr Rahmat Waluyanto; CEO of the
Mr Ijlal Alvi; Dr Milani Zivadjil from the International Monetary Fund; as well as Prof Dr Iraj Toutounchian from Iran, an expert on Islamic Economics and Finance.

URL: http://iina.me/wp_en/?p=1008227

During the conference, Deputy Ruler of Dubai Sheikh Maktoum Bin Mohammad Bin Rashid Al Maktoum and President Minnikhanov cut a red ribbon, signaling the beginning of a new working relationship between the two governments.

Residency in the Alabuga Special Economic Zone, big business in Tatarstan, and other investment opportunities were showcased during the conference, including Tatarstan goods that are available for export.

While in Dubai, Minnikhanov met with UAE Minister of Foreign Trade Sheikh Lubna bid Khalid Al Qasimi. In the meeting, Minnikhanov made it clear that the republic is interested in doing more business with the UAE and other Arab countries.

The Tatarstan President also met with Ahmed Salim al Koshli, Minister of Economic Affairs of Libya’s transitional government. Both sides expressed interest in resuming business relations, which were cut off during the civil war. Before the war, Tatneft was doing 5.4 billion rubles of business in Libya exploring the country’s oil reserves.

In an interview with TV outlet Russia Today, Minnikhanov declared that Tatarstan is interested in attracting more investment from the Middle East. “We have been working in this direction for about two to three years, and I hope that there will be positive results soon,” Minnikhanov said. “Traditionally, we have worked mainly with Europe, but haven’t worked enough with the Arab world and southeast Asia…Our republic is Muslim, and we need to use this factor.”

According to Minnikhaov, Tatarstan is interested in having Tecom Investments help with the integrated development of Smart City, an initiative to build a world-class conference and business center near Kazan International Airport. The company is currently involved in implementing similar projects in Malta and India.

In Dubai, Tatarstan also discussed the possibility of cooperating with Kele Contracting in construction and construction management of major sports facilities, as the company has experience working on Olympic facilities in Sydney.

Minnikhanov’s participation in the AIM conference in Dubai is the latest in a string of recent signs that point to Tatarstan’s commitment to actively seeking out foreign direct investment (FDI).

In 2011, Minnikhanov created the Tatarstan Investment Development Agency (TIDA), a body designed specifically to both encourage the growth of Small and Medium business and increase the level of FDI in the republic. TIDA’s Chief Executive is Linar Yakupov, one of the founders of Kazan Summit, an international Islamic banking and finance conference that was first held in 2009.

Since his agency was created, Yakupov has been aggressively pursuing foreign investment. In March, the agency used its first-ever collegium as an opportunity to host Kazan Invest, an international investment forum billed as a precursor to Kazan Summit, which will be held in May 2012.

Co-hosted by the World Association of Investment Promotion Agencies (WAIPA), Kazan Invest was a day packed full with discussion of how to increase FDI in Russia and Tatarstan. During the forum, TIDA had a Dubai-based architect present a proposal for Smart City, the same exhibition and business center that Minnikhanov wants Tecom Investments to help develop. Overseen by TIDA, Smart City is being developed to make Kazan an even more attractive destination for foreign businessmen.

Since Kazan Invest, Yakupov and his team have logged thousands of frequent flier miles traveling to international FDI and business forums, spreading the word that Tatarstan is ready to do business.

In March, Yakupov visited Malyasia and Indonesia to promote Tatarstan’s investment potential.

In April, he visited Luxembourg and the World Investment Forum in Doha, Qatar. “Republic of Tatarstan is the only region of Russian Federation represented at World Investment Forum in Doha, Qatar,” Yakupov tweeted on his English-language Twitter account, @LinarYakup. At the end of the month, he was in Europe, attending an industrial park seminar in Metz, France. That same month, TIDA First Deputy Robert Galiullin was in Latvia as part of a delegation.

And of course, Yakupov and his team were in Dubai with President Minnikhanov at the AIM conference, where they met with the directors of Masdar City, Dubai Internet City, Dubai Media City, and the Mubadala Investment Company, according to TIDA’s website.

This promotional work was officially branded “Invest in Tatarstan” and launched as a global campaign during the AIM summit in Dubai. The campaign has also recently started working through its new Twitter account, @InvestTatarstan.

“Invest in Tatarstan” is a global campaign, but as Minnikhanov’s visit to Dubai indicates, one of its strategic focuses is deepening links within the Islamic world.

This year’s IV Annual Kazan Summit, now hosted by TIDA, will focus on economic cooperation between Russia and the Organization of Islamic Countries (OIC), which has more 57 member countries.

“Russia has a dialogue with the European Union, Russia has a dialogue with the United States, and we similarly want Russia to have a dialogue with the OIC,” Linar Yakpuov explained in an interview with The Kazan Herald. Yakupov is confident that there is tremendous, untapped economic potential in such a dialogue.

To be held on 18 and 19 May in Kazan “under the patronage” of President Minnikhanov, Kazan Summit will feature a strategic forum, a trade and investment forum, a conference on Islamic economics and finance, bilateral meetings, and roundtables on the role of Islamic finance in the world financial system, dialogue of civilizations, and the role of the press in foreign investment.

Over the past few months, TIDA has gathered a database of more than 79 different investment projects put forward by Tatarstan entrepreneurs. This database of business plans which will be available for Kazan Summit participants to peruse and follow up on during the summit.

URL: http://iina.me/wp_en/?p=1008156

URL: http://www.tradearabia.com/news/BANK_217148.html

Described as having a “medium to high” risk profile, the HSBC Amanah Sukuk Fund, which launched last month, is the first open-ended sukuk fund to be offered by HSBC Group.

Managed by the asset management division of HSBC Saudi Arabia, the fund will invest in a concentrated portfolio of between 15 to 20 sukuks primarily issued from within Gulf Cooperation Council countries, although there are no geographical constraints.

HSBC said the fund would aim to have an average duration of five years or less, with an average risk rating of A-.

The portfolio will be drawn from an investment universe of sukuks approved by the Shariah Supervisory Committee of HSBC Saudi Arabia, money market funds approved by Saudi Arabia’s Capital Markets Authority and Islamic Certificates approved by the Shariah Supervisory Committee.

HSBC said a sukuk “can be classified as the Shariah-compliant equivalent of bonds” and “represent the credit obligation of the underlying issuer”.

The Shariah nature of the product places certain limitations on the fund manager. These restrictions include bans on “conventional” leveraging or hedging, short-selling, securities lending and the use of investment derivatives such as CDS.

The fund has a minimum initial investment of $25,000 (£15,000, aed92,000) and charges an annual management fee of 0.75%, which is reinvested into the fund.

URL: http://www.international-adviser.com/news/products/hsbc-saudi-offers-shariah-compliant-fund

“We firmly believe that very soon a satisfactory solution will be realized on the initiative of the government,” M.I.M Rizvi Mufthie, president of the Colombo-based All Ceylon Jamiyathul Ulama (ACJU) said in Riyadh on Friday. Abdul Cader Al Mashoor Moulana, the Sri Lankan president’s coordinating secretary, was also present at the lecture.

Mufthie, who was adjudged among the 500 most influential Muslims worldwide, was addressing the members of the Sri Lankan Muslim community here on Friday.

The ACJU headed by Mufthie plays an active role as the Islamic religious authority with 3,000 active members under its 22 districts and 15 divisional branches.

The ACJU has recently established a Halal Certification Authority in Sri Lanka and publishes a quarterly magazine, which lists halal certified organizations and products.

Mufthie is a pioneering scholar in the field of Islamic banking and finance. He is also a member of the local Shariah advisory council for a number of Islamic financial institutions in Sri Lanka.

During his speech, the scholar requested Sri Lankan Muslims to be calm and be confident of the steps taken by ACJU in resolving this issue. “Our duty is to make dua (prayers) for the wellbeing of Muslims and resolve this issue amicably through tolerance and compromise with the concerned parties,” he noted.

On April 20, a large group of hooligans staged a mass demonstration at the Khairiya Juma Mosque in Dambulla just before the Friday prayers, barring worshippers from conducting their regular prayers.

Mufthie explained that the mosque premises which was sealed by the security authorities following the incident, was reopened the following day on an initiative taken by Senior Minister Abdul Hameed Mohammed Fowzie and Industry and Commerce Minister Rishath Bathiudeen.

“On the following Friday, Juma prayers were conducted peacefully without any hindrance,” he added.

The Islamic scholar said problems can be resolved peacefully.

“Earlier, Muslims in the Kandy district allowed the Line mosque to be demolished to give way for some city development projects. Similarly, we built the mosque in Nimal Road far away from the stipulated boundary to accommodate the highway that was constructed in the neighborhood,” he added.

“Following the end of the ethnic conflict in Sri Lanka, our country’s President Mahinda Rajapaksa pledged that all Sri Lankans will be treated equally without any discrimination,” he said. “We should have faith in the country’s leaders, who will look after all communities without any prejudice,” he noted.

He said ACJU had a roundtable discussion with all Muslim leaders irrespective of political affiliation and decided to form an action group under the leadership of Fowzie. “We have also formed a legal committee  to look into the legal aspects of the whole case,” he said.

Mufthie stressed that Islam believes in one Ummah and Muslims are bound by the principles of Islam as enunciated in the Holy Qur’an and Sunnah.

Mufthie also addressed the youths at a special lecture held yesterday at the auditorium of the World Assembly of Muslim Youth in Riyadh.

URL: http://arabnews.com/saudiarabia/article626192.ece