Deloitte, FAA collaborate on Islamic finance training

The Deloitte Islamic Finance Knowledge Center (IFKC) has signed a cooperation agreement with the Finance Accreditation Agency (FAA), an organization supported by Bank Negara Malaysia and Securities Commission Malaysia, which promotes leading practices in Islamic finance training development.

Deloitte, FAA collaborate on Islamic finance training

Deloitte, FAA collaborate on Islamic finance training

The initiative aims to provide quality assurance and accreditation in Islamic finance executive education by having Deloitte IFKC professional training programs benchmarked against best practices and adhere to the highest standards of quality through reviews by international experts around the world.

The collaboration with the FAA complements Deloitte’s existing capacity programs with industry stakeholders. The program strives to enhance opportunities for practitioners in the Middle East and elsewhere to benefit from an international quality assurance framework developed for the financial service industry.

“Our capacity program strategy aims to work diligently and closely with the Islamic finance industry and help diffuse high standards of good practices in all aspects. This program has particular emphasis on quality of professional training and executive education,” said Joe El Fadl, Financial Services Industry leader, Deloitte Middle East.

“In today’s highly dynamic and evolving financial system, establishing business relations to strengthen the financial institutions cannot be overemphasized. FAA enters this significant partnership to reach this goal which supports the agenda in bringing the best practices to the industry at the same time promoting quality learning within the Financial Services Industry,” said Dr. Amat Taap Manshor, Chief Executive Officer of the FAA.

The IFKC and FAA cooperative initiative recognizes the importance of upholding quality learning in Islamic financial service industry.

Three main objectives are identified in this partnership:

1. To standardize Quality Assurance and Accreditation ‘QAA’ framework in the Islamic financial service industry.

2. To foster more widespread understanding about QAA in training and executive education, incorporating core local practices, leveraging on our joint expertise and insights.

3. To increase awareness about the opportunities to benefit from participation in capacity building and talent development.

© The Saudi Gazette 2013
© Copyright Zawya. All Rights Reserved.

More support for Islamic banking urged

While Islamic banking will keep on growing, it needs more concerted action at the inter-governmental and industry level, Standard Chartered Saadiq Malaysia chief executive and global head of consumer banking Wasim Saifi said.

More support for Islamic banking urged

More support for Islamic banking urged

Increased competition has resulted in a widening of the Islamic product offering, bringing it within the scope of larger numbers of Muslims, Saifi said, talking to the Gulf Daily News (GDN), our sister publication, on the sidelines of the World Islamic Banking Conference (WIBC) 2013, which concluded at the Gulf Hotel’s Gulf Convention Centre yesterday,

“As the Islamic banking proposition became more attractive, Muslims converted from conventional banking at a rapid pace, spurring the industry to make products offered even more sophisticated,” he said.

“Whether in terms of access, technology, products or services, they expect nothing less than they have been getting from conventional banks, and Islamic banks are responding,” he added.

He said what helped the growth along was the fact that to bank in a Sharia-compliant way, Muslims no longer needed to sacrifice the convenience, products and services they had been used to.

The increasing regulatory support, with governments in many markets like Bahrain actively encouraging the development of a healthy Islamic banking ecosystem, also helped.

The next big step for the global Islamic banking industry will be to close the gap with conventional banking when it comes to the range of products and services on offer, he said.

“Islamic wealth management is clearly lagging behind, with Sharia-compliant funds comprising less than 0.25 per cent of total assets under management.

“It is a classic chicken-and-egg story,” Saifi added.

“To attract wealthy Muslim clients, you need a competitive range of products and services, but to get this, you need scale.”

However, he feels, with the strong growth in Islamic assets, and Islamic banking providers putting increased pressure on fund managers to respond, there is a good chance Islamic wealth management will catch up within the next few years.

For all the industry’s recent growth, Islamic banking still represents a fraction of total banking assets globally, and the great majority of Muslims (roughly only one in every eight Muslims with a bank account, banks Islamic) still bank conventionally.

Penetration remains low in some of the world’s largest Muslim countries.

According to Saifi, the most obvious reason for this is a simple lack of awareness of what Sharia banking has to offer.

“Regulatory barriers also persist in some countries,” he said. “While different markets will develop at different speeds, support from governments and regulators will help keep up the pace of change. Opening markets to international Islamic banks will help, too.”

International providers tend to accelerate development in individual markets with their ability to migrate best practice, product sophistication and banking expertise between geographies.

“At Standard Chartered, for example, we work with regulators in a number of countries to help develop their framework for Islamic banking, using our experience from other markets.

“StanChart Saadiq has ambitious long-term plans in the Islamic finance sector in Southeast Asia, Middle East, South Asia and Africa,” he said.

“We will continue to further drive business momentum across our footprint, working with existing and new markets to build and strengthen the bank’s Islamic banking services and products under the Saadiq franchise,” he added. – TradeArabia News Service.

Onward to Islamic finance and halal industry 2020

Rushdi Siddiqui (Participation finance/Banking) / 2 December 2013.

Onward to Islamic finance and halal industry 2020

Onward to Islamic finance and halal industry 2020

In one week, Dubai hosted two major Islamic finance conferences — the Global Islamic Economy Summit, or GIES, under the patronage of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai; and the World Islamic Retail Banking Conference, or WIRBC.

At the GIES, Islamic Development Bank president Dr Ahmed Ali Madani was given the Lifetime Achievement Award for his contribution to the development of the Islamic economy. At the WIRBC, former prime minister of Pakistan Shaukat Aziz was given the Global Islamic Finance Leadership Award 2013.

Also in the same week, Dubai was voted as the host city of World Expo 2020 over three other G-20 countries, which were Brazil, Russia and Turkey.

This showcases two extremely important points: one, Dubai, as expected, has recovered from the effects of the global economic crisis and has created a more impactful buzz on the global stage; and, two, Islamic finance and the halal industry are back in the spotlight with a more interesting story with support of its core stakeholders — delegates and sponsors.

Query: Is Dubai an indicator for the pulse of Islamic finance and the halal industry going forward?

Altitude, attitude and aptitude:

At a jet-engine altitude of 35,000 feet, the $1.3 trillion Islamic finance and $2.7 trillion halal industries are the new Brics story — growth stories in growth markets with growth demographics. Thus, there is a story here for financial intermediation linked to the real economy, including halal, deploying savings into “ethical” investments and insuring all aspects of the above.

At a helicopter level of 3,500 feet, it’s about establishing the blueprint on the road ahead with sign posts. It’s not about making Islamic finance bulletproof from market forces, which cannot be done, witness lessons from the bankruptcy of Arcapita, but establishing an enabling infrastructure that allows for the internationalisation of the phenomenon.

At the the grassroots level of three feet, it’s about making it conventionally-efficient on financing (cost of capital/credit and longer tenure and terms), expanding bandwidth of investing asset classes (market performance, but de-coupling from conventional counterpart benchmarks), insuring (achieve size by consolidation and building re-takaful to address premium leakage and customer service (as status quo not acceptable).

It’s also about establishing an environment for innovation, which implies access to risk capital, like crowd funding as part of financial inclusion. It’s about good governance and transparency, as there is confidence crisis after the financial crisis. It’s about establishing human capital development, which is as important as standardisation for Shariah, tax, accounting and regulations.


The GIES exceeded venue capacity at Mina Salaam, with 3,000-plus delegates, and only a minor drop in attendance on the second day. There was a buzz and electricity in the atmosphere about Islamic finance and the halal industry that has not been seen, heard or felt in many years.

Emerging markets guru Mark Mobius from Franklin Templeton, clearly articulated that Dubai, a “new” normal, is the best place in the region for ease of doing business and for investments, and on par with many financial capitals.

The 21st-century thinking about the two niche markets is being slowly shaped by Dubai’s ambition of becoming the capital of an Islamic economy. It’s about “beyond” halal food and Islamic finance, as now we are defining, describing and (Muslims) demanding their own products and services.

It’s about (Muslim) consumerism and the hundreds of billions of dollars behind it, from farm, food, finance, fashion, pharmaceuticals, fragrances/cosmetics, travel, hospitality, supply chain logistics/distribution, and so on. The market is there, but the approach is haphazard, hence, the focus on certification and accreditation (for halal) and standardisation (for Islamic finance), i.e., rules of engagement and enforcement, is a good starting point.

Certification and standardisation provides linear progression. For example, it removes uncertainty, which provides efficiencies, resulting in economies of scale, that attracts new entrants with their liquidity that expands the market, providing basis for consensus (if not harmonisation), which then develops the market.

Thus, it can be said the birth of the Accounting and Auditing Organisation for Islamic Financial Institutions, or AAOIFI, in 1991 began the process of removing uncertainties for Islamic financial institutions.

But, the rules are only effective if they are clear, easily available and accessible, and consequences for non-compliance or deviation.

The halal industry has two possible ways forward: one, halal industry stakeholders follow the path and process of establishing their own AAOIFI; or, two, have the AAOIFI expand its mandate/bylaws to the include halal industry and top it up with additional resources. Furthermore, as the IDB is one of its founders, the Lifetime Contribution winner, Dr Madani, should be easy to approach.

Finally, as Dubai does not host any Islamic finance industry bodies, it’s a good opportunity for the winner of World Expo 2020 to have an immediate imprint and impact on the way forward for the halal industry.


Islamic finance got a facelift at the GIES, as many speakers challenged the status quo and injected the halal Industry as an asset class consideration. Today, Muslims (and non-Muslims) are consumer investors in halal company products; they should also be stock investors in the same companies.

A graph, comparing three MSCI indexes — world index, Islamic world index and food production index from 2009 to end of October 2013 — showed that the food index outperformed the Islamic index and us more stable than a conventional index, and it had higher dividend payout, hence, ideal defence sector play.

Furthermore, an opportunity exists to refinance the riba-based balance sheet of many halal companies with sukuk and insure them with Takaful, hence, end-to-end halal offering and convergence with Islamic finance.


Islamic finance and the halal industry are $4 trillion Brics-type opportunity, and countries embarking on getting a piece of it via Dubai Expo 2020 must start planning, including defining their role of a sunset market participant that becomes a market regulator.

The Expo is a great opportunity for both Islamic finance and sukuk, much like the 2022 Fifa World Cup.

Islamic finance to grow more

Issac John / 30 November 2013

$1.4b industry’s expansion seen at double-digits, with Malaysia and GCC to lead.

Islamic finance to grow more

Islamic finance to grow more

The industry in the GCC constitutes 28.7 per cent of assets at $445 billion as of 2012. — KT file photo.

Led by Malaysia and the GCC — the two regional heavyweights and pioneers of the industry — the $1.4 billion global Islamic finance industry is set for a double-digit growth.

“Undeterred by the uncertain recovery elsewhere in the world’s financial markets, global growth of the Islamic finance market has continued unabated this year,” Standard & Poor’s said.

In its report “Islamic Finance 2014: We Expect Continued Double-Digit Growth, And A Push For Regulation And Standards”, S&P said worldwide, Shariah-compliant assets are estimated at upward of $1.4 trillion are likely to sustain double-digit growth in the coming two to three years.

Despite more than a decade of heady growth, the industry is still in a formative stage. “But we believe it’s only a matter of time before it achieves critical mass, as the pool of assets broadens and deepens, and enhances liquidity,” said Zeynep Holmes, regional head of Eastern Europe of Middle East and Africa at Standard & Poor’s.

“Nevertheless, the speed at which the industry matures and joins the mainstream comes down to how market participants address a classic imbalance between supply and demand.”

S&P pointed out that Islamic finance remained a demand-driven market, with scarce supply, still hampered by a limited range of Islamic financial centres and their various regulatory frameworks.

“In our view, expansion and enhancement of existing centers, and a more transparent regulatory environment could build the momentum for the growth needed to break into the mainstream.”

The ratings agency said it believed that regulatory efforts to accommodate Islamic finance and the establishment of additional industry bodies at national levels will take centre-stage starting in 2014. Interestingly, newcomers in the industry — such as Oman, Turkey, and Nigeria, for instance — have started to trace the footsteps of fast-growing pioneers, such as Malaysia.

Rasameel confident on sukuk pipeline

DUBAI — Kuwait-based Rasameel Structured Finance expects a flurry of Islamic financing activity in the Gulf next year, in particular from corporations looking to tap the market for Islamic bonds, its chief executive said.

“There is an increase in activity, Dubai in particular and in the region in general, so we see a recovery coming up and I would expect to see more corporates come to market,” said Issam Al Tawari, Rasameel’s chairman and managing director.

The firm is working on corporate deals mainly in Kuwait and Dubai, including a sukuk for a healthcare company in the UAE that will fund the completion of hospitals and a research centre, he said in an interview. — Reuters.

“Right behind the newcomers, a long line of countries is aspiring to enter the market, with the continent of Africa in the forefront.”

“The gradual building out of local and regional regulatory frameworks and establishment of standards ought, in our opinion, to minimize the barriers that are preventing the industry from achieving its full potential. Globally accepted standards, we believe, are necessary for growth of the industry,” Holmes said.

According to Ernst & Young, Islamic banking assets are to grow to $1.8 trillion in 2013 and beyond $2 trillion by 2014. The industry in the GCC constitutes about 28.7 per cent of assets at $445 billion as of 2012 and registered a growth of 14 per cent over 2011.
Global sukuk issuances reached about $140 billion in 2012. Worldwide year-to-date issuance dipped 25 per cent from last year to $77.4 billion, as of September 22, 2013.

The global Takaful market is estimated at $12 billion as of 2011, and it is expected to touch about $25 billion by the end of 2015. Takaful insurance premiums in the GCC is expected to reach about $15.38 billion by the end of 2016.

TheCityUK’s UK Islamic

DIB-Dar Al Sharia named 'Best Sharia Advisory Firm' at Islamic Finance News awards for fifth consecutive year

November 21, 2013

ENP Newswire – 21 November 2013 Release date- 20-11-2013 – Dubai Islamic Bank (DIB) announced that its Sharia consultancy subsidiary, Dar Al Sharia Legal & Financial Consultancy LLC (DAS) has been named ‘Best Sharia Advisory Firm’ and ‘Best Islamic Consultancy Firm’ in the Islamic Finance News – Best Services Providers Poll 2013.

Dar Al Sharia named 'Best Sharia Advisory Firm' at Islamic Finance News awards for fifth consecutive year

Dar Al Sharia named ‘Best Sharia Advisory Firm’ at Islamic Finance News awards for fifth consecutive year


DIB-Dar Al Sharia named 'Best Sharia Advisory Firm' at Islamic Finance News awards for fifth consecutive year

DIB-Dar Al Sharia named ‘Best Sharia Advisory Firm’ at Islamic Finance News awards for fifth consecutive year



Established in 2007, Dar Al Sharia provides Sharia, legal and financial consultancy and advisory services for all types of Islamic finance transactions in the region and around the world. In a very short period, the firm has become one of the most renowned and trusted Sharia consulting firms globally.

The Islamic Finance News Best Service Providers poll honors leading institutions in the Islamic financial services industry. Dar Al Sharia has continued to win ‘Best Sharia Advisory Firm’ since 2009, and ‘Best Islamic Consultancy Firm’ since 2010. ‘Over the past five years, Dar Al Sharia has continued to enhance its products and services by developing its enormous depth of talent, including Sharia scholars, lawyers, bankers, trainers and auditors.

Winning both these awards consecutively over the years is indicative of how we have gained an unrivalled level of expertise in the industry and how we continue to exceed client expectations,’ said Sohail Zubairi , Chief Executive Officer, Dar Al Sharia. ‘We are extremely honored to be recognized for our efforts in this regard and I would like to thank our customers for their continued confidence in our services, DIB for its strong support and the Dar Al Sharia team for the excellent performance over the years’. [Editorial queries for this story should be sent to [email protected] ] ((Comments on this story may be sent to [email protected] ))
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Yurizk Released Ground Breaking Research Report On Human Capital Development in Islamic Finance

GIFE 2013 reveals critical insight on Global Islamic Finance Education status and human capital development for Islamic Finance industry.

Yurizk Released Ground Breaking Research Report On Human Capital Development in Islamic Finance

Yurizk Released Ground Breaking Research Report On Human Capital Development in Islamic Finance

United States, November 20, 2013: Yurizk, the leading provider of information in Islamic Finance education has released an independent special report last week on Global Islamic Finance Education and human capital development in Islamic Finance industry.

Global Islamic Finance Education 2013 (GIFE 2013), the special research report released by Yurizk has revealed the current status of Islamic Finance education globally and critical challenges the industry is facing in terms of human capital development and long term sustainability. Research findings from GIFE 2013 shows that 85% of the educational and awareness initiatives on Islamic Finance are potentially contributing towards skill building for the industry, and only 15% initiatives in education and knowledge dissemination is potentially facilitating research and development.

“GIFE 2013 is a wake up call for all the stakeholders of emerging Islamic Finance industry. This report is an exclusive and timely one for the mass of the industry and if you are looking for a comprehensive insight of Islamic Finance Education sector – this is the document for you,” said Mr. Muath Mubarak, Head of Finance and Corporate Strategy of First Global Group.

Human capital development is a critical challenge for Islamic Finance industry and previously there was no comprehensive study that addresses the major issues and at the same time backs the insight with collective data. GIFE 2013 bridged that gap of information and brought critical insight into the challenges facing Islamic Finance industry in human resources development and the industry’s long term sustainability.

M. Kabir Hassan, tenured Professor in the Department of Economics and Finance at the University of New Orleans, who gives lectures and workshops in the US and abroad on Islamic Finance and edited several books on Islamic banking said, “Yurizk has filled a vacuum in bringing this GIFE 2013 report that details the current state of Islamic finance education in the world. There is an estimated current need of 50,000 professionals for the Islamic banking industry. I have reviewed the report before its release and it followed a sound methodology to derive its conclusions. The education sector and industry will benefit from this report.”

Key findings from GIFE 2013 reveal:

There are 742 institutions globally that are involved in education and knowledge dissemination in Islamic Finance

Pakistan, Malaysia, United Kingdom, United States, and United Arab Emirates are among the top countries by number of Islamic Finance education and knowledge services providers

85% initiatives within Islamic Finance education and knowledge services are potential contributor towards skill building or professional development in the industry and 15% educational and knowledge dissemination initiatives are potential contributor towards research and innovation.

United Kingdom leads Islamic Finance education in Europe with 53% of the total Islamic Finance education and knowledge services providers in the region.

United Arab Emirates leads Islamic Finance education in MENA region with 30% of the IFEKSP (Islamic Finance Education and Knowledge Services Providers) in the region.

Spokesperson from a leading Islamic Finance training provider, Ethica Institute of Islamic Finance expressed, “Yurizk has performed an excellent service for the Islamic finance industry by making previously hard to find raw data on education available in its Global Islamic Finance Education Report.”

The research report highlights key challenges that are affecting Islamic Finance education and the industry’s growth and long term sustainability concerns. The report also contains views and opinions of industry Thought Leaders, Academic Scholar, Practitioners on various issues of Islamic Finance education. Findings from GIFE 2013 were presented via live global webcast by Sadia Karim, Founder and CEO of Yurizk and attended by industry practitioners from North America, Europe, Middle East, Africa and Asia.

About Yurizk

Yurizk is the leading source of global Islamic Finance education information for the stakeholders in Islamic Finance industry. Yurizk houses the largest database of Islamic Finance education and knowledge services providers worldwide. Based in the United States, Yurizk facilitates education and knowledge dissemination in the Islamic Finance industry by bridging the gap in access of information between education providers and education seekers in the industry through creative promotional initiatives. Yurizk brings critical insight for the academic and business stakeholders in the Islamic Finance education industry through its research services.

Yurizk Media Relations
+1 302 525 2004
[email protected]

© Press Release 2013

A big question mark in the Islamic finance industry

Is Islamic finance reaching the poor?

Apparently, it is a matter of pleasure that the global volume of the Islamic finance industry has crossed the USD1.3 trillion threshold, which is definitely providing the best and compatible sources of finance with interest-free modes.

A big question mark in the Islamic finance industry

A big question mark in the Islamic finance industry

According to a careful estimate, there are more than 2,000 Islamic financial institutions that are offering Islamic banking, Islamic insurance (takaful), Islamic funds, mudaraba, Islamic bonds (sukuk), and Islamic microfinance. Meanwhile, some other institutions actively provide Islamic financial services on different modes in adherence to Shariah principles of Islamic finance.

Yet if we look into the market share of the above-mentioned institutions, we get shocked and depressed for a while with the fact that Islamic banking and finance has been nearly confined to the “rich people” and as per the ideology of capitalism.

The profit urge has captured the Islamic financial industry and discriminated against the underprivileged people, letting them be deprived from Islamic financial services. Keeping in view these facts, it can be simply said that commercialism has captured Islamic finance institutions in such a way that business and finance with and for the poor has gone astray from their agenda.

According to the facts and figures from a March report by Consultative Group to Assist the Poor (CGAP), an associated institution to the World Bank, the global volume of Islamic microfinance has reached USD 800 million with service to about 1.3 million beneficiaries.

While as per the latest research (July 2013) conducted by AlHuda Centre of Excellence in Islamic Microfinance, the global volume of Islamic microfinance has reached at USD1 billion. The total number of Islamic microfinance Institutions stands at more than 300 globally, yet Islamic microfinance constitutes less than 1 percent of the overall USD1.3 trillion assets that comprise the Islamic finance industry. This, in itself, is a big question mark on Islamic finance industry and proving its misfortune.

These stated facts and figures give rise to different question such as: is social segmentation between poor and rich 1 percent to 99 percent? Does Islamic finance have financial resources only for the rich people? Not for the poor? Is Islamic finance an option only for the particular segment of society? Furthermore, is it justice system of Islam?

As per the analysis of Islamic finance in the light of Islamic teachings, we get into the heart of Islamic ideology towards finance, which aims at justice, cooperation, and welfare of the poor and financially deprived people of society with its best principles. Islam is in name a revolution, starting from the poor and ending at with the same.

If we have a look at comparative study of different religions regarding the viewpoint of poverty, then we come to know that poverty alleviation is not only a social responsibility in Islam, but rather a religious obligation as well. Zakat, charity, sadqa, fitr, ushur and qarz-e-hasan are all amongst the key religious responsibilities of Muslims, whereas it is a social responsibility in other religions rather than a religious one, a responsibility recognized and branded in the name of “Corporate Social Responsibility” (CSR). These institutions are doing good work for poverty alleviation and social development in the whole world. Unfortunately, the Islamic financial industry has widely ignored its social or religious responsibilities.

If we look at world poverty, we get surprising facts and figures. Currently, 46 percent of world poverty exists in the Muslim World, while the Muslim population in the world is 26 percent[SO1] . The United Nations have marked 26 out of 57 member countries of the Organization of Islamic Countries (OIC), as the least developed countries. Current statistical information is highlighting that the poverty in the Muslim World is increasing day by day.

In serious observation, it can be said that this is caused by no or little response of poor people to microfinance facilities because of interest; none or limited Islamic Microfinancing facilities provided by Islamic financial institutions; and finally, the least attention and interest of International Donor Agencies (UNDP, World Bank, IFC) towards Islamic microfinance. All of which, in turn, is throwing the Muslim world into an era of poverty.

As per the praiseworthy analysis of economics experts of the modern age (Mr. Tariq Ullah and Mr. Ubaid Ullah 2008), 650 million Muslims in the world are living below poverty line with less than USD2/per day income. On the one hand, only 1.3 million Muslims out of 650 million were aided in alleviating their poverty through Islamic microfinance services, whereas the remaining 649 million Muslim, living in poverty, are still looking for any financial assistance through Islamic way.

The Islamic finance industry is facing lot of criticism in different aspects, namely the acceptability of Islamic finance as a whole, but also through internal objections from Shariah scholars and conflicts in Shariah related issues. These are seen as the main challenges to the Islamic finance industry. But the issue of neglecting the poor is very critical, and if not resolved, can damage and bring a perpetual loss to the Islamic banking and finance industry.

Optimal results for the economic prosperity of Islamic finance can be ensured if Islamic microfinance institutions are established by the Islamic finance industry. Although Islamic microfinance can be energized by utilizing the available charity amount of the Islamic banking and finance industry–which is worth millions of dollars–tools such as alia zakat, sadqaat, waqf, and other Islamic microfinance products such as murabaha, musharaka, salam and istisna’, can be used prolifically for poverty reduction and social development.

Our Shariah scholars are also responsible for pursuing and insisting that the Islamic financial institutions execute and promote Islamic microfinance.

Otherwise, there is a definite chance of rumors that Islamic banking and finance services are only for rich people, creating the discrimination of “Do Have and Have Not” and ensuring that the industry ultimately benefits only rich people.

About: Muhammed Zubair Mughal is Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (CIBE) and has been working consistently for the last nine years towards poverty alleviation through the Islamic microfinance concept. He can be reached at [email protected]

© Business Islamica 2013

UK leads in Islamic finance education, indicator shows

The UK is the global leader in Islamic finance education with over 60 institutions offering Islamic finance courses and 22 universities offering degree programmes specializing in Islamic finance, according to Thomson Reuters Islamic Finance Development Indicator (IFDI), a numerical measure representing the overall health and growth of the Islamic finance industry worldwide.

 UK leads in Islamic finance education, indicator shows

UK leads in Islamic finance education, indicator shows

Malaysia and the UAE, both established global Islamic finance hubs, followed the UK in terms of a comprehensive Islamic finance education infrastructure. Malaysia has 50 course providers and 18 universities offering degree programmes, while the UAE has 31 course providers and nine universities offering degree programmes. Pakistan was placed fourth, with 22 course providers and 9 universities offering degree programmes. The IFDI recorded 420 institutions offering courses in Islamic finance and over 113 universities offering Islamic finance degrees.

Malaysia also led in terms of research published on Islamic finance in the last three years, with 169 research papers, of which 101 were peer reviewed. The UK and USA followed with 111 research papers (56 peer reviewed) and 73 research papers (39 peer reviewed) respectively. A total of 655 research papers were issued globally on Islamic finance in the last three years, of which 354 were peer reviewed.

Khaled Al-Aboodi, chief executive officer, Islamic Corporation for the Development of the Private Sector, said: “These findings are a perfect example as to how and why the IFDI can identify the critical growth components of the Islamic finance industry. Our research shows that countries that build their educational infrastructure can benefit most from the growth of their Islamic finance industries. Through their research and thought leadership countries, like the UK, Malaysia and the UAE have the potential to significantly influence the direction of the regional Islamic finance sector.”

Sayd Farook, global head of islamic capital markets for Thomson Reuters, said: “Research is an important metric used by the IFDI to assess the depth of knowledge dimension within the Islamic finance industry. Our initial research indicates that the industry lacks the availability of in-depth research which, in turn, limits innovation and development. Thomson Reuters is committed to leading the charge in information and analysis to support the global Islamic finance industry.”

Earlier this year, Thomson Reuters and ICD announced the creation of the ICD- The IFDI, which will be officially launched at the Global Islamic Economy Summit, aims to expand the scope of Thomson Reuters’ universe of Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry. The indicator measures five key components – quantitative development, governance, social responsibility, knowledge and awareness.

Russell Haworth, managing director, Middle East & North Africa, Thomson Reuters, said: “This indicator, the first of its kind for the Islamic Economy, will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry. The development of Islamic finance educational infrastructure will be a key driver for the establishment of the Islamic finance industry, which is why we chose the topic for our first IFDI analysis.”

The Global Islamic Economy Summit, organized by Thomson Reuters and the Dubai Chamber of Commerce & Industry, will take place on November 25-26 2013 in Dubai, United Arab Emirates.

Talent gap overshadows Malaysia’s Islamic finance growth

Finding a job is often harder than expected for graduates hoping to enter Malaysia’s Islamic banking industry, the world’s second-largest with $124 billion (RM390 billion) in assets – employers are proving choosy about qualifications.

Talent gap overshadows Malaysia’s Islamic finance growth

Talent gap overshadows Malaysia’s Islamic finance growth

Thousands of students, a large number of them Muslims from across the globe, have flocked to the many Islamic finance courses offered in Malaysia, seeing them as springboards to a career.

Malaysia has an estimated 50 course providers and 18 universities which offer Islamic finance degrees, and it boasts the largest academic output globally.

The country has published 169 research papers on Islamic finance in the last three years, according to data from Thomson Reuters.

But while the Malaysian Islamic banking industry’s output in monetary terms is growing about 20% annually, employment in it is expanding at less than half that rate – even though an additional 22,400 jobs are needed to support the growth, according to a blueprint for the financial sector prepared by the central bank.

Malaysia is experiencing a problem faced by Islamic finance sectors around the world: training and qualifications often do not provide the levels of specialism and sophistication that employers need.

The problem is limiting growth of the industry and, some say, stifling innovation that is necessary to bring Islamic finance fully into line with religious principles, and prevent its products from merely being pale reflections of conventional financial instruments.

“A common misunderstanding of these young graduates is that they believe there is such a thing as a generic job in Islamic finance. In reality, the industry is looking to employ specialists,” said Raymond Madden, chief executive of the Asian Institute of Finance (AIF), set up by Malaysia’s central bank to develop human capital for the region’s financial industry.

This means graduates are often inadequately equipped, and few in the industry are actively trying to solve the problem, he said. “It’s a major issue – nobody wants to take ownership of training graduates in areas that are most needed by the industry,” added Sofiza Azmi, AIF’s head of strategy and development.

The Islamic finance sector’s need for specific skills in risk management as well as internal audit and governance, plus a basic grounding in sharia law, is not being communicated, she said. “Moving forward you need to understand where the banks are going, how they are going to expand, what their plans are.

Then you can map out their talent needs.” One reason for the skills mismatch in Islamic finance is the youth of the industry; it was born in its modern form in the 1970s, and in many countries has only become a mainstream industry in the past decade.

The industry has moved into relatively complex areas, such as Islamic money market instruments and hybrid Islamic bonds with equity-liked characteristics, only in the last few years.

The fragmentation of Islamic financial regulation, with sharia boards and national regulators in various countries taking different approaches to some core products and concepts, may also be an obstacle to effective training.

Employers could provide some of that specialised training, but banks in Malaysia have so far been reluctant to do so because of the time and cost involved. Instead they tend to poach skilled staff from rivals, a quicker and cheaper alternative.

“The banks will have to step up. If they need people specialising in areas, they will have to train internally,” Azmi added. Universities also need to revamp their curricula to suit industry needs, but it inevitably takes a long time to evaluate and implement changes, she said.

Malaysian authorities have responded by trying to intervene directly in the job market; the International Centre for Education in Islamic Finance (INCEIF) was set up by Malaysia’s central bank in 2009 to help with training.

But Syed Othman Alhabshi, INCEIF’s chief academic officer, said the centre’s signature Chartered Islamic Finance Professional qualification, a one-year postgraduate programme, had only attracted a handful of industry executives to its staff.

Only five of the centre’s full-time lecturers boast actual exposure to the sector and most have retired from active involvement in the corporate world, he said. The centre’s 12-member professional development panel, which meets quarterly, has only two Islamic bank heads, from Bank Islam and OCBC Al-Amin.

About 60% of INCEIF’s graduates find employment within six months, according to an internal survey, the centre said, declining to provide further details of the survey.

While the centre’s programmes have evolved over time, its graduates are not designed to be specialists, so the task of further training falls on banks, said Syed. “Our first job is to train them. If they can get a job here, its fine. But if not, we can’t do much. It’s up to the employer whether they want to take the extra mile.”

Syed added that job opportunities for Islamic finance graduates were limited partly because companies such as Maybank Islamic, the largest Islamic bank in Asia, did not need large workforces as they could leverage staff from their parent firms – in Maybank’s case, Malayan Banking. AIF hopes a new advisory panel comprising representatives from across the industry can close the gap.

A new Financial Services Talent Council, being planned by the central bank, is to include individuals from the education ministry, Islamic banks and universities, in the hope of setting a national agenda for the industry’s talent needs.

“If you’ve got this diversity of people to discuss a particular issue, you’ll be able to come up with a better solution,” Azmi said. Many foreign students expect easy access to Malaysia’s job market when they obtain local Islamic finance qualifications, but some are turned down because banks face costly, time-consuming visa requirements to hire foreign students.

“They waste one year here, and many of them are upset with this,” said Omar Alaeddin, an INCEIF graduate and current member of its student representative council. So many students return to their home countries with Malaysian Islamic finance qualifications.

This has the benefit of spreading knowledge globally, but the students can also have difficulty finding jobs back home.

“At the beginning they come here thinking there are hundreds of banks and employees,” said Alaeddin, who teaches risk management and sharia auditing at Universiti Kuala Lumpur. “Then some go back and work in their previous jobs, which have nothing to do with Islamic finance.” – Reuters, October 29, 2013.

Not enough law firms in Islamic finance

An analyst says that although Malaysian claims to be on of the biggest sukuk markets in the world, there are not more than a dozen lawyers in the country that can handle the transactions.

Not enough law firms in Islamic finance

Not enough law firms in Islamic finance


The legal fraternity in Malaysia should pay more attention to serving the Islamic finance industry, which is suffering a brain drain to more lucrative markets such as the Gulf Cooperation Countries, Zaid Ibrahim & Co head of Islamic Financial Services Practice Madzlan Hussain said.
The lack of law firms and lawyers involved in Islamic banking and finance in the country opens up opportunities for an enlargement of the playing field and calls for the right institutional programmes to produce the necessary manpower, said Madzlan.

“While we claim that we are one of the biggest sukuk markets in the world, there are not more than a dozen lawyers in the country that can handle sukuk transactions,” Madzlan said.

He said with the growth of the Islamic finance industry, legal fraternity should look at ways to encourage a greater segment of lawyers to join the sector with the right incentives.

“It is imperative that Malaysia create the right framework and incentive to ensure that there are sufficient qualified people in the industry, that is if Malaysia is to further impose its dominance as a leading international financial centre,” Madzlan said in an interview with The Malaysian Reserve.

He said while the legal infrastructure in the country for Islamic Finance is strong, there is still room for improvement. “We need to look at both the hardware and software of the legal framework and enhance it,” he said.

He said the hardware legal framework entails having suitable laws and framework which is adequate but the software entails having the right people to manage the software and there is a shortage resource in this area.
Malaysian regulators have set the bar higher for Islamic finance and takaful industry, preparing to release a brand new legal framework for Islamic finance in 2013.

The new legal framework is expected to further liberalise the industry, and will encourage more firms and lawyers to be involved in the legal aspects of the industry.

Malaysian Islamic finance regulators, such as the Islamic Finance Services Board, have also introduced new rules over the last two years, aiming at giving a boost to the Islamic finance sector, which Malaysia has set to become a new growth sector for the nation’s economy.

However, these plans will be hurt by the dearth of talents, and the lack of incentives for local law firms to be interested in the industry.

Mazdlan said the biggest challenge for the industry is having adequate human capital that can help Malaysia spur the growth of the industry.

“We have not done enough or fast enough towards creating adequate human capital in the industry,” he said.
“Malaysia has to invest sufficiently in education and training to create the right kind of people in the industry. We need to increase our investment in education and training,” he said.

He said the biggest challenge for Malaysia will be the internationalisation of the industry where we can create sufficient pool of talents not just for the country but also export our talents to other countries with Islamic jurisdictions.

“Right now our talents are being pitched and if we don’t replenish them sufficiently, than the dearth of talent pool in the industry can retard our progress towards becoming a successful Islamic hub in the world,” he said