Islamic Banks in Pakistan agree upon mechanism of Islamic inter-bank market
Islamic banks have recently achieved a major milestone towards development of an interbank market for Islamic banks.
Meezan Bank recently hosted a meeting of Shariah advisors and product development experts of all full-fledged Islamic banks to decide upon the mechanism for inter-bank placement amongst Islamic banks and to move towards the development of an Islamic inter-bank market.
After careful deliberation, standardized agreements – namely Interbank Musharaka and Interbank Wakala Agreements – were finalized and it was agreed that henceforth only these standard contracts would be used by the Islamic banking industry.
This achievement is an important milestone towards development of inter-bank market for Islamic banks and will pave the way for the long awaited Islamic benchmark rate as an alternative to KIBOR. The meeting was attended by Shariah advisors / product development heads of Meezan Bank, BankIslami, Dubai Islamic Bank, Emirates Global Islamic Bank and First Dawood Islamic Bank.
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Shariah-compliant water fund set to launch
Bahrain-based Robeco Middle East has announced that it will be launching one of the world’s first Islamic water funds.
The launch will be in association with their boutique SAM, one of the world’s leading asset managers in the field of sustainability investments, and in conjunction with Gatehouse Bank, one of the leading Islamic banks.
It will offer, on a global basis, the first-ever Sharia-compliant investment strategy in the area of water.
This investment strategy offers professional investors with a long-term investment horizon the opportunity to participate in the worldwide growth of forward-looking, sustainability-oriented companies involved in the entire value chain of water, while adhering to Sharia norms.
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Abu Dhabi Islamic Bank introduces innovative Shariah compliant VISA card
Abu Dhabi Islamic Bank, one of the leading banks in the region, has launched today a pioneering new Sharia’a compliant covered card for small to medium-sized enterprises (SMEs). (Covered card is the Shari’a compliant equivalent to credit card)
Offered in Platinum and Gold versions, the VISA card, which is the first of its kind in the UAE, provides SME customers with a line of finance up to AED 250,000. The new card also provides SMEs with an easy and modern payment tool that can help them control their expenditures, improve their accounting management and access their funds more conveniently.
Cardholders can use the new cards, which are accepted for purchases and for cash withdrawals through ATM & Points Of Sales globally, as a substitute for less efficient and more risky cash and cheques. In addition, customers can also utilize the line of credit by an instant transfer of funds to their current account withAbu Dhabi Islamic Bank through Internet banking or phone banking.
There are an estimated 230,000 SMEs registered in the UAE working in various industries including manufacturing sector, retail sector, real estate and business services.
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Three-tier banking model proposed for Islamic banking in Malaysia
A three-tier banking system is needed in Islamic banking to further strengthen the industry, an economist suggested.
"The first tier is to be like the conventional bank, where people put their money in the bank, and where the bank gives money to meet their type of transactions.
"The second tier is like a Mudarabah type of institution or Mudarabah company, where people put their money and combine it and try and develop different things. This model is very much applicable for SME financing, where a person has the idea but does not have the money, (while) and another person has the capital. They can combine using the Islamic principle.
"The third tier is like the venture capital or Musyarakah, where big infrastructure projects financing (is involved)," Professor Dr. M. Kabir Hassan of New Orleans University said.
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CEO of DIFC Authority calls for greater innovation in Islamic Finance
Nasser Al Shaali, the CEO of the DIFC Authority called on financial centres across the world to coordinate their efforts to promote innovation in Islamic Finance products.
Addressing an audience of financial professionals from around the world on the first day of the London Sukuk Summit 2008, Al Shaali said financial centres should work together to address weaknesses in legal and institutional frameworks that are hampering product innovation in Islamic finance.
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