EIIB-Rasmala launches Islamic trade finance fund

Nov 19 (Reuters) – EIIB-Rasmala, a venture between London-based European Islamic Investment Bank and Dubai’s Rasmala Group, has launched a sharia-compliant trade finance fund as a low-risk investment product, the firm said on Tuesday.

EIIB-Rasmala launches Islamic trade finance fund

EIIB-Rasmala launches Islamic trade finance fund

Islamic trade finance remains a tiny part of global banking business, but it is gradually attracting interest among banks and asset managers because of the rapid growth of global trade, including in Gulf economies.

The Cayman-domiciled fund is linked to emerging market trade transactions and the firm hopes to attract $100 million into the fund over the coming year, said Eric Swats, head of asset management at EIIB-Rasmala.

The fund targets a return of 4 percent with low volatility as the firm continues to expand its sharia-compliant product range, Swats added.

Since last year, EIIB-Rasmala has launched three Islamic funds including a leasing fund and a sukuk fund seeded with $25 million of the company’s own capital.

Earlier this year, Kuwait-based Asiya Investments launched an Islamic trade finance fund with $20 million in seed capital, aiming to cater to small Asian manufacturers.

http://www.reuters.com/article/2013/11/19/islamic-finance-trade-idUSL5N0J41H820131119

Islamic Bank, Jaiz, Opens Doors to the Public

After months of controversy generated by the introduction of the non-interest banking in the country, also known as Islamic banking, Jaiz Bank Plc quietly opened its doors for business on Friday, January 6, 2011 in Abuja, the Federal Capital Territory (FCT).

The bank, which has its head office in Kano House, Central Business District, Abuja, has been offering banking services for about a month, ditto its branches in Kaduna and Kano which were also opened simultaneously.

The commencement of interest-free banking business has obviously ended months of speculation and suspense associated with the birth of a new form of banking in the country. Indeed, the controversy surrounding interest-free banking may have caused Jaiz Bank to open without the usual pomp and ceremony associated with conventional banking marketing gimmicks, to herald commencement of business.

Jaiz’s eventual emergence follows repeated failures in the past to begin operations more than five years after it launched itself into the public consciousness to raise funds from the capital market. The bank, which has as one of its promoters a former chairman of First Bank of Nigeria Plc, Alhaji Umaru Mutallab, was actually incorporated on April 1, 2003 as a public limited liability company with an authorised share capital of N2.5 billion.

The Central Bank of Nigeria (CBN) eventually announced on June 20, 2011 that it had issued Jaiz Bank an approval-in-principle to operate as an Islamic bank – the first financial institution to be so licensed. It was thereafter, given six months to comply with the apex bank’s capitalisation requirement, among other criteria, in order to receive the final licence.

But much furore arose from the introduction of Islamic banking last year when the CBN Governor, Sanusi Lamido Sanusi, lent his support to the project, arguing that it was no different from conventional banking, with the non-interest banking service as a product niche. Controversy, however, was stirred when he said banks that offer such products would have to adhere to the tenets of Islamic commercial jurisprudence and must have a Sharia Advisory Committee

THISDAY, however, learnt that Jaiz Bank may have hastily commenced business under pressure and may not have been fully prepared to market its presence in the Nigerian economy. This, it was gathered, has impacted on the bank, resulting in the low patronage in its Abuja banking hall which was unusually quiet when THISDAY visited Wednesday.

When this newspaper visited the bank’s head office which also houses its Abuja branch, there were only two banking product offerings: the corporate account and individual current account while other offerings such as internet banking and saving accounts, among others were said to be on hold for now.

Sources at the bank said it intends to also operate the children’s account, fixed deposit account as well as offer a range of services including internet banking and ATMs among others.

The CBN’s decision to introduce Islamic banking in the country had been greeted with criticisms from members of the public, especially Christian leaders who suspect that it was a ploy to Islamise the country.

Amidst the heated debate, some persons had suggested that the word “Islamic” be replaced with a more receptive phrase such as “non-interest” banking in order to douse the anxiety of those who were uncomfortable with it.

THISDAY checks further revealed the CBN has also encouraged the amendment in the nomenclature for Islamic banking by using the phrase, “non-interest banking” more often. But a marketer with the bank, who would not want to be named said: “Whether you call it non-interest or Islamic banking, the fact still remains that the principles cannot be changed because our model is firmly rooted in Islamic principles.”

But there are yet other hurdles to cross for Jaiz and other non-interest banks to follow suit. The source added that Jaiz is at the moment running skeletal services because it still needs to get some approvals from the CBN before it can proceed full steam ahead.

The source further explained that a good number of Nigerians were yet to fully comprehend the basic principles of the institution, adding that some still see the bank as strictly an Islamic affair.

According to him, the bank would not be interested in investing in start up businesses and would also shun “unethical” ventures such as prostitution, beer-selling business, gambling, and cigarette manufacturers, among others.

Although Managing Director/Chief Executive Officer of the bank, Alhaji Mustapha Bintube, could not be reached for comments, the source said the bank’s operations would be consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics which prohibits fixed or floating payment or acceptance of specific interest (usury) or fees for loans.

The source also admitted that further public enlightenment would be needed to create awareness so Nigerians could take advantage of interest-free services to actualise their target economic objectives.

But whether Jaiz has fully started commercial services or not, by opening its doors, a definitive statement has been made: Islamic or non-interest banking has become a reality in Nigeria and has come to stay.

 

http://www.thisdaylive.com/articles/islamic-bank-jaiz-opens-doors-to-the-public/108886/

Kerala dances round Islamic banking

Kerala Finance Minister K M Mani reveals plans for special counters to be opened in state treasuries to collect interest-free deposits, saying the state Government was ‘not against’ the idea of Islamic banking

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Despite Kerala’s apparent willingness to embrace Islamic finance, the Reserve Bank of India and the central Government has made it clear that Islamic banking may not be implemented under current legislation. The state legislature is, therefore, moving ahead with opening special counters in the state treasuries. Industries Minister P K Kunhalikutty said that the deposits mobilised would be invested in productive sectors. The returns made from such investments will be shared among the stakeholders.

Earlier in July, Kerala Chief Minister Oommen Chandy has offered full support to interest-free banking system based on the Islamic principles. “The Kerala government will extend full support and cooperation to the interest-free banking system so that it may be used for the development of the state and we will try to attain the central government’s approval for it”, he said while inaugurating a national seminar on Interest-free Institutional Mechanism for Banking, Finance and Insurance held in Thiruvananthapuram on 4 July 2011. Continue reading

Ignorance, Islamic banking, and Sanusi's NASS presentation

When one compares the meeting of the House of Representatives with the Central Bank of Nigeria (CBN) Governor on Islamic banking and N150,000 cash withdrawal limit introduced by the CBN and the United Kingdom’s Commons media committee hearing on the phone hacking scandal of Rupert Murdoch’s News of the World Corp, one easily understands that ignorance is a major factor responsible for the weakness of our democracy which continues to live in the nascent abyss.

At the said meeting, the law makers openly confessed their low level of awareness on both issues, particularly the cash withdrawal limit showing that very little research had been done ahead of the meeting.

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Egypt’s Salafists to found their first Islamic bank

Egypt’s Salafist party, El-Nour, has called for the founding of its first bank in its first economic conference


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Egypt’s Salafist party, El-Nour, in it’s first economic conference, called for the founding of a bank on behalf of the party that aims to contribute to the Islamic banking sector.

The bank will be based on funding for small and medium enterprises as one of the quick keys to help the youth sector.

The participants agreed at the conference, which was held on Sunday 24 July under the title ‘Egypt’s economic revolution blooms’, on the need to establish an Islamic Chamber of Commerce as a mechanism for economic reform, as well as attempt to attract the high capital members of the party. Continue reading

Muslim leaders vow to defend Islamic banking

MUSLIM leaders in their hundreds, under the aegis of the Supreme Council for Shari’ah in Nigeria, in Kaduna, on Sunday, said they would defend Islamic banking in Nigeria with the last drop of their blood.

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They said since interest free banking was successfully practised in the United Kingdom (UK) and other Christian dominated countries, they would resist any attempt by the Christian Association of Nigeria (CAN) to frustrate the implementation of the banking system in Nigeria.

Speaking at a press conference shortly after their meeting at the Arewa House, Kaduna, the national president of the Supreme Council for Shari’ah in Nigeria (SCSN), Dr Ibrahim Datti Ahmed, warned that Muslims in the country would no longer keep quiet and allow others to blackmail the interest-free banking about to commence in September. Continue reading

Islamic banking ‘ll threaten national unity – Cleric

By Wale Akinola

LAGOS – Amid the controversy triggered by the decision of the Central Bank of Nigeria, CBN, to introduce Islamic banking in the country, Bishop John Alagbala Osa-Oni of Vineyard Christian Centre, Lagos, has said the banking model was a potential threat to national unity.

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Osa-Oni consequently wants the CBN authorities to drop the idea of the non-interest banking system. Continue reading

Sharia-compliant Islamic Banking in India, a wealthy proposition

Gold, two steps ahead: how the rich keep getting richer. New gold rpt Globally, Islamic finance is estimated to be worth about $300 billion, growing at 20% annually. With this growth, the need for Shariah compliant financial products has also increased. The product offerings are similar to normal banking products; however the main difference is that the funds collected are not for the purpose of accumulating/ paying interest or invested in any negative businesses that harm morality of the society. The basic principle of Islamic banking is the prohibition of interest.

India with a 13% Muslim population, the highest in a non-Islamic country, should have been in the forefront of Islamic banking initiatives, but it is yet to be permitted here. It will hugely benefit the Indian economy by attracting investments from the cash rich Middle Eastern economies on the lookout for new investment destinations. Five Indian companies, Reliance Industries, Infosys Technologies Wipro, Tata Motors and Satyam Computer Services figure in the Standard & Poor’s BRIC Shariah Index. Continue reading

Islamic bank a time bomb – Akinola

ABEOKUTA – THE immediate past Primate of the Church of Nigeria (Anglican Communion), Rev. Peter Akinola has described the proposed Islamic banking in Nigeria as a time bomb, saying “it can lead to the disintegration of the country.” islamic baking,alkinola,negerian,banking,abeokuta,interset free banking,shariah banking,world banking trend,negerian banking Speaking yesterday in Abeokuta during the 2011 Youth Harvest of the St. Michael Anglican Church, Obantoko, the Primate said that Islamic banking would further compound the problems of Nigeria amidst the Boko Haram menace. Continue reading

Evolution and trends in Islamic banking

By Omoh Gabriel
Non interest banking, Islamic banking or participant banking is banking  activity that is consistent with the principles of Islamic law  (Sharia) and its practical application through the development of Islamic economics . Sharia prohibits the payment or acceptance of specific interest or fees known as Riba  or usury  for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also Haraam  (forbidden). Interest-free banking seems to be of very recent origin. The earliest references to the reorganisation of banking on the basis of profit sharing rather than interest are found in Anwar Qureshi (1946), Naiem Siddiqi (1948) and Mahmud Ahmad (1952) in the late forties, followed by a more elaborate exposition by Mawdudi in 1950.

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