The Global Islamic Economy Summit announces title sponsors

Thomson Reuters and the Dubai Chamber of Commerce & Industry, the organisers of the upcoming ‘Global Islamic Economy Summit’ (GIES), announced their partnership with ADIB and Dubai Islamic Bank, who are taking on the role of Title Sponsors of the event.

The Global Islamic Economy Summit announces title sponsors

The Global Islamic Economy Summit announces title sponsors

In addition, the leading Nutrition, Health and Wellness company, Nestlé Middle East, signs up as Diamond Sponsor, while Emirates NBD, Qatar First Bank and the Global University of Islamic Finance (INCEIF) have also signed on as Gold Sponsors, while the Dubai Multi Commodities Centre (DMCC), Afridi & Angell Legal Consultants, Société Générale and MasterCard have signed on as Silver Sponsors.
GIES is held under the patronage of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. While in line with Dubai’s Islamic Economy Strategy announced by His Highness on October 5, the conference also seeks to addresses the challenges and opportunities the industry faces and its contribution to the global economy.
Russell Haworth, Managing Director – Middle East & North Africa, Thomson Reuters, said, “The calibre of sponsors supporting GIES is testament to the local and international interest in the opportunities that the Islamic Economy presents. From leading local, regional and Islamic banks that aspire to become international players, to a European bank that sees a huge opportunity in this sector, to a global food producer, education, consumer credit and legal services providers and the largest free zone in the UAE, our sponsors will be invaluable to the success of GIES.”
Tirad Al Mahmoud, CEO at A DIB said, “At A DIB, we hold an unwavering commitment to playing a role in the development of the Islamic finance industry. We are very excited to be lead supporters for The Global Islamic Economy Summit – an ideal platform to share our core values as an expanding Islamic financial services institution with the wider community in the UAE, region and beyond.”
GIES, Dr Adnan Chilwan, Chief Executive Officer of DIB said. “Being the first Islamic bank in the world, Dubai Islamic Bank is proud to play its role in the Global Islamic Economy Summit. As pioneers of Islamic banking, DIB has been at the forefront of developments in the Islamic financial sector over the past four decades. We have consistently added value to the franchise and contributed to the growth and development of all sectors of the UAE economy. Our vision of becoming the most progressive financial institution in the world is fully in line with the vision of the leadership of this great country. Today, with our rich heritage, unrivalled expertise and tradition of innovation, we are perfectly positioned to play a key role in Dubai becoming the global capital of Islamic economy.”
GIES aims to initiate critical dialogue on the development of the integrated sectors of the Islamic Economy, covering Islamic financial services, Halal food, Halal Lifestyle, Halal Travel, SME Development and Islamic Economy Infrastructure such as standardization and research.
Yves Manghardt, Chairman and CEO Nestle Middle East FZE, commented on the company’s role as a sponsor: “As the leading Nutrition Health and Wellness company, Nestlé is proud to be a partner of the Global Islamic Economy Summit. We have been pioneers in providing a wide range of Halal food options for Muslim consumers around the world, and we are delighted to be part of Dubai’s initiatives to highlight the importance of the Halal sector as a key component of the Islamic economy and culture.”
The Summit will also feature ground-breaking market studies and other announcements such as the winners of the ‘Islamic Economy Award’ which recognises a mix of regional and global leaders from 14 Islamic economy sectors.
GIES will take place on 25th – 26th November, 2013 at Madinat Jumeirah in Dubai. GIES will gather leading thinkers, policy makers and stakeholders from around the world to lead a discussion on the future of the Islamic economy.

GIB named best sukuk arranger

Bahrain-based Gulf International Bank (GIB) was recently named the “Best Sukuk Arranger” for the year 2011 by Dubai’s Islamic Business & Finance magazine.

According to the magazine, which conducted a survey of the world’s best Sukuk arrangers, nominees for the awards were short-listed from hundreds of top Islamic financial services providers and professionals.

Tens of thousands of votes were cast by the readers of the magazine and the registered users of its website.

The magazine distributed its annual Islamic banking awards to the winning banks during a ceremony held recently in Dubai.

GIB has developed considerable expertise in originating and placing regional Sukuk issuances in the GCC, a statement said.

GIB’s strength in this area originates from long standing relationships with regional issuers and investors, experience of structuring Shariah-compliant instruments and the ability to distribute transactions regionally, it added.

Dr Yahya Abdullah Alyahya, GIB’s chief executive officer, said: “We are pleased to receive this prestigious award that recognizes our leadership and achievements in the field of Sukuk arrangement and issuance.

We are committed to further strengthen GIB’s status as a leading investment bank in the GCC.”“This new award comes as an addition to other awards the Bank has received during the past 12 months.

This reflects GIB’s leadership and the market’s confidence in its capability to provide innovative debt and corporate advisory solutions,” he added.

Islamic Banking: Developed by Indians, flourishing in other countries

Malegaon: A professional researcher on India-centric socio economic and political databases Shafeeq Rahman while stating that the core system of the interest-free banking, widely termed as the Islamic Banking System, is developed by economists of the Indian subcontinent expressed surprise over the fact that the region has gained nothing from it.

“The conceptual framework of Islamic banking is mainly developed by the Islamic economists of the Indian subcontinent; in particular, the complete non-interest banking module was developed for the first time in 1969 by Nejatullah Siddiqi though the business of Islamic banking flourished in West Asian countries, Iran, Malaysia and Indonesia”, Shafeeque Rahman wrote in a recent article published in Tehelka.

Mohammad Nejatullah Siddiqui is a leading Indian Islamic scholar, whose specialisation is Islamic Economics. Author of numerous books and a recipient of the King Faisal Award for Islamic Studies, he has taught at the Aligarh Muslim University (AMU) and the King Abdul Aziz University, Jeddah. He was a Fellow at the University of California, Los Angeles and Vesting Scholar at the Islamic Development Bank (IDB) Jeddah.

Stating that Islamic Banking is now fast spreading its wings to other parts of the world, Shafeeque Rahman wrote, “The client network is now expanding beyond the conventional Muslim countries to European and other non-Muslim territories. In UK, it is estimated that $18.4 billion business was done by the end of 2008. According to newest Global Islamic Finance Report 2011, the Islamic finance industry is valued at $1.14 trillion and is growing at a rate of 10 per cent. It was worth a mere $150 billion in the mid-1990s.”

“Apart from Islamic banks, mainstream banks and financial institutions are opening Islamic product windows to woo Muslim consumers. For instance, HSBC has HSBC Amanah for its Islamic financial services. The governments of Iran, Pakistan and Indonesia have officially adapted to Islamic policies to run their banking and finance structure. And due to its cosmopolitan society, Malaysia follows the parallel Islamic system alongside conventional banking”, he wrote.

Shafeeque Rahman further wrote, “Banking without interest is a long term demand from Indian Muslims that has not been fulfilled so far due to the existing statutory and regulatory framework of Indian banking, which does not allow such an alternate system. Besides interest, a key point of contradiction is that conventional banks in India facilitate only intermediary services while banks have to be involved in trading and business activities in the Islamic banking system. Indian Muslims have seen several unsuccessful experiments in the unorganised sector and through the registration of NBFCS and cooperatives but the lack of government regulatory supervision has led to the failure of major interest-free banking initiatives.”

“The non-availability of an interest-free banking option has distanced many Muslims from banking products and services. The Reserve Bank of India (RBI) data report for March 2010 indicates that banking participation in Muslim- concentrated districts is below the national average. They lack in banking access, infrastructure availability and low credit-deposit (CD) ratio”, he wrote.

Islamic Banking believed to be an interest-free, participatory and ethical banking system, has been an emerging global paradigm of the banking system since the last quarter of the twentieth century. The essential feature of Islamic banking is the prohibition of taking and giving of interest in all form of banking and financial transaction. In place of an assured return on loan amount by the interest rate in the conventional banking system, the Islamic form of financing advocates the profit-loss sharing module. Taking a risk is the only provision that entitles one to profit, if there is no risk of loss then there is no assurance of profit to the depositor or the financer.

OIC event to be curtain raiser for series of events hosted by Bank Negara

BANK Negara will be hosting a series of events in November in conjunction with the Meeting of Central Banks and Monetary Authorities of the Organisation of Islamic Cooperation (OIC) member countries.

Organised in collaboration with the Statistical, Economic, Social Research and Training Centre for Islamic Countries (SESRIC), the OIC series will, among others, comprise the annual Experts’ Group Workshop and the Governors’ Meeting of Central Banks and Monetary Authorities.

The events, from Nov 14-17, will be held at Sasana Kijang, the central bank’s newly established centre for excellence in knowledge and learning in central banking and financial services as well as for the promotion of regional and international collaboration.

The OIC Experts’ Group Workshop and the Meeting of OIC Central Banks and Monetary Authorities will provide an opportunity for member countries and the heads of their institutions to share and discuss issues of mutual interest.

The meeting this year will focus on the theme Central Banking and Financial Sector Development, covering the framework for central bank and sound financial sector development that will support and catalyse sustainable economic growth in developing economies.

Among the dignitaries attending the OIC Central Banks and Monetary Authorities meeting are Islamic Development Bank president Dr Ahmad

Mohamed Ali Al Madani, Islamic Financial Services Board chairman Faris A. Sharaf, Central Bank of Bahrain governor Rasheed Mohammaed Al Maraj,

Central Bank of Republic of Turkey governor Dr Erdem Basci, Central Bank of UAE governor Sultan bin Nasser Al-Suwaidi, State Bank of Pakistan governor Yaseen Anwar, SESRIC director-general Dr Savas Alpay and OIC Secretariat director of economic affairs department Gholam Hossein Darzi.

Highlights of the event include keynote address entitled Accelerating Financial Sector Development for Economic Growth: Distilling Global Lessons for OIC Member Countries by Shaukat Aziz, former prime minister of Pakistan.

Dr Martin Redrado, former governor of Central Bank of Argentina will deliver keynote to discuss on Central Banking in the 21st Century: Implications on Economic and Financial Globalisation.

Bank Negara will also be hosting the fifth annual Islamic Financial Intelligence Summit organised by The Banker Magazine and Financial Times. The summit serves as a platform for members of the private sector to discuss the latest developments and opportunities in the global Islamic finance space.

It aims to provide unparalleled information and analysis on the emerging trends of Islamic finance as furnished by the Top 500 Islamic Financial Institutions Report.

As the only ranking of its kind, the report’s research offers a unique insight into the strength of Islamic banking and finance and provides a verifiable benchmark for the sector.

It details the geographical distribution of institutions with syariah compliant assets and the Top 500 rankings by both institution and country.

A wealth of data from the report will be presented via speaker addresses and interactive panellist sessions.

These will cover the global and regional growth forecasts of the industry and address current issues such as liquidity management, the untapped potential in new markets, and the development of syariah-compliant products, as well as the future of the Islamic finance industry.

Looking ahead to the event, Brian Caplen, The Banker Magazine’s editor said: “Islamic finance is an increasingly important area of international finance which stood up well in the crisis.

“Both our annual conference and our Top 500 Islamic Financial Institutions report have become well established in the industry calendar. For this year we are looking forward to the most comprehensive data set yet in the ranking as well as ground breaking discussions at the event. We hope as many as possible can join us on the day.”

The summit will bring together more than 450 invited guests from both the advanced and emerging economies, including senior members of the financial and corporate community and senior central bankers.

At the event, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz will present her keynote address entitled The New Islamic Finance Landscape. Her speech will highlight issues on fostering a culture of sustainable growth, the globalisation of a previously niche market and growth trends witnessed in Asia.

Zeti said : “This gathering of practitioners from the international financial community is timely in light of the continued growth of Islamic finance in this highly challenging international financial environment. Islamic finance continues to expand facilitating greater economic and financial linkages between Asia, the Middle East and other emerging economies.

“This Summit serves as an important platform to deliberate on developments and opportunities as well as emerging trends that will shape the future landscape of Islamic finance.”

The OIC series of events will also see the Islamic Financial Services Board (IFSB) holding the 4th Islamic Financial Stability Forum in conjunction with the 19th Meeting of the Council of the IFSB at its offices at the Sasana Kijang.

The Forum, themed Strengthening Financial Safety Nets in the Islamic Financial Services Industry’, will draw on the participation of the IFSB Council members and representatives of the supervisory and regulatory authorities from among the IFSB member countries as well as the OIC heads of central banks and monetary authorities.

The OIC is the second largest inter-governmental organisation in the world after the United Nations with 57 member states. The present OIC Charter was adopted in 2008, laying down the objectives and principles and fundamental purposes to strengthen the solidarity and cooperation among member states.

The charter, among others, highlights the organisation’s aim to safeguard and protect the common interests and support the legitimate causes of the member states and coordinate and unify member states’ efforts in view of the challenges faced by the Islamic world in particular and the international community in general.

It also ensures active participation of member states in the global political, economic and social decision-making processes to secure their common interests and strengthen intra-Islamic economic and trade cooperation in order to achieve economic integration leading to the establishment of an Islamic Common Market.

HSBC Amanah to add 16 new branches by 2013

KUALA LUMPUR (Oct 12, 2011): HSBC Amanah Malaysia Bhd plans to open 16 new branches by 2013 to tap the increasing demand for Islamic financial services, said HSBC Bank Malaysia Bhd CEO and HSBC Amanah Global CEO Mukhtar Hussain.

He said five new branches will be opened by year-end in Old Klang Road, Kuala Lumpur; Bangi, South Cheras and Sungai Buloh in Selangor and Kota Kinabalu in Sabah. Currently, the bank has 10 branches nationwide.

“We are investing in high quality premises and good locations, which are designed to serve our customers. Obviously, our customer base will grow reflecting the size of our network and through customer demand,” Mukhtar told reporters after the official opening of HSBC Amanah’s 10th branch in Wangsa Maju here today.

“We see continued growth in Islamic finance, which is part of the national agenda. Already today, in the financial services industry in Malaysia, between 20% and 22% of the assets are syariah-compliant,” he said, adding that Islamic banks may control over 40% of banking assets here in the next 10 years.

“Our investment in Islamic finance reflects our confidence in the market opportunities and clearly our growth also recognises the demand of our customers for Islamic finance as a mainstream form of finance in the country,” he said.

Islamic Finance to Reduce Fiscal Deficit in India

At a time when economic recovery needs more stimuli by the Government of India (GoI), there is also an urgent need to safeguard the economy from the debt trap because the GDP growth rate fell to 6.7% in 2008-09 from 9% in 2007-08; the debt servicing reached 58.83% of the total expenditure for the year 2008-09. It means maximum receipts are now spent for debt servicing which accounted for 15.87% of the Gross Domestic Product (GDP), while the debt receipts were 9.78% of the GDP in 2008-09. Even the interest payments were 21.39% of the total expenditures by GoI and 5.77% of the GDP in 2008-09. Notably the revenue deficit in 2008-09 is already 30% due to high debt serving ratio to total revenue expenditure.

In an attempt to find the actual reasons behind the high fiscal deficit, it is observed that the increased debt receipts by GoI to finance revenue expenditures (especially high debt servicing); increased subsidies on food, fuel and fertilizer; and rural development through schemes like NREGS, farmer’s loan waiving scheme and Sarva Shiksha Abhiyan are the three most important factors of high fiscal deficit. Since there is a need for more stimuli to counter recession in the economy, it is expected that the plan expenditures may further increase whereas due to recession, the revenue receipts may decline. This decrease in revenue receipts and increase in plan expenditure may increase the fiscal deficit to an unwanted high level. Working upon different options to reduce the fiscal deficit, it is found that Islamic finance can reduce the fiscal deficit even if revenue receipts decline and plan expenditures increase.

Islamic financial products have a great role to play in reducing the fiscal deficit in emerging economies by replacing the debt based investments for infrastructure with funds mobilized through equity based Government Securities for infrastructure projects. Let’s see how Islamic finance may help us reduce our present fiscal deficit.


Notably the total revenue expenditure is 142.92% of total revenue receipts reflecting 30.03% revenue deficits. The major cause of this high revenue deficit is high debt service ratio to total revenue expenditures. For a developing economy like India, in the proposed plan we project increasing capital expenditures, but in the revised estimates of 2008-09 budget, the revenue expenditure is 89% and the capital expenditure is just 11% of total expenditure; all due to high debt servicing ratio (66%) to total revenue expenditure. Notably the interest payment alone is 24% of total revenue expenditures. So, with capital expenditure being as low as just 11% of total expenditure and debt serving being as high as 59% of total expenditure, how can we go about planning to foster inclusive growth?

Debt Finances crossed the Planned Estimates:

The debt based finances for investments under 11th five year plan document was proposed to be 48.42% of total receipts for 2008-09, whereas the revised budget estimates reveal that the debt receipts were 96.38% of total capital receipts in 2008-09. This reflects our inability to mobilize targeted amount of non debt receipts, causing high fiscal deficit due to interest payments over borrowed debt receipts.


According to 11th plan documents, projected investments in 2008-09 should be of Rs. 321,579 crores while total plan capital expenditure in the revised budget observed just Rs. 41,301 crores. So the plan capital expenditure is just 12.84% of targeted investment in 2008-09. This shows our inefficiency to make budget development pro inclusive growth and to foster growth. So, it is better that GoI reduce debt borrowings which ultimately increases revenue deficits; and shift the focus on infrastructure investments to stimulate the economy at a time when GDP growth rates and employment growth rates are falling.

Actual Debt Receipts are 210% of the planned Estimates:

Since the revised estimates on debt receipts (Rs. 326,515 Crores) is already 210% of estimated requirements of debts (Rs. 1,55,704 Crores) by year 2008-09 as projected in 11th five year plan documents, the GoI should seriously think about this increased debt receipts. The funds utilized for debt servicing (Rs. 530,010 Crores) are already 162% of debt receipts to finance fiscal deficit (Rs. 3.26.515 Crores), the GoI should revisit its budgeting. How good is it to increase the debt receipts at a time when Indian industries are looking for more affordable credits from banks to meet the challenges after the global meltdown?


In year 2008-09 the deficit budget cost an amount of Rs. 192,694 crores to GoI which was paid as interest over the debt receipts borrowed to finance the deficit budget. This may be called as loss to GoI because had there been equity based receipts against debt receipts, GoI would have saved this amount.

Financing Fiscal Deficit through subsidized bank loans is not good

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