Saudi’s IDB Group pitches for Islamic finance in India

MUMBAI: Saudi Arabia-based Islamic Development Bank (IDB) Group will approach the RBI to highlight the benefits of tweaking rules to allow Islamic finance in India. The meeting comes ahead of Prime Minister Narendra Modi's visit to the Kingdom of Saudi Arabia next month.

Khaled M Al-Aboodi, CEO of the Islamic Corporation for the Development of Private Sector (ICD) — an arm of the IDB, said that he would discuss with the RBI how Islamic finance could complement the existing banking activity. 

Highlighting the advantage of Islamic finance — an interest-free method of providing capital — Al-Aboodi said that there was no excess leveraging in such assets and banks would always have some security. According to Al-Aboodi, in terms of distress Islamic finance worked well as the financier operated as a partner with the businessman.

"During the 2008 global financial crisis, Islamic finance banks had been affected at a much lesser level," he said. IDB has advised other countries that have managed to tweak rules to enable interest-free financing. One of the regulations is facilitation of leasing and buyback of assets by financiers.

Al-Aboodi, who was in India ahead of Modi's visit to Saudi Arabia, said that although IDB lends only to 56 member countries, it worked together with India in getting Indian vendors for projects in developing markets in Africa. "We play a role similar to the Exim Bank's, by financing Indian imports among member countries," said Al-Aboodi. He added that Indian companies were in a position to provide affordable technology.

In India, the IDB is engaged in social development initiatives. One such initiative likely to be signed during the PM's visit is a $50-million financing of mobile medical units in the country. The financing will be through a non-government organization which has been identified for the purpose.

The IDB Group has been present in India since 1983, when it started a scholarship programme under which 4,190 students have benefited, he said, adding it has also helped 250 other projects in the country.

(The Times Of India Business / 17 March 2016)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India: Muslims set for Eid with zakat to help needy

RAIPUR: Muslims are bracing up to donate a portion of their savings as zakat-al-fitr as they eagerly wait for news about sighting of moon that would mark end of month-long Ramzan fasting and beginning of Eid celebrations.

On the eve of Eid, several Muslim families were preparing for the zakat, meant to help poor and underprivileged.

Raipur's biggest Madrassa hopes to collect over Rs 1.5 crore from its 2.5 lakh Muslim population as Zakat-al-fitr this year.

"Zakat al-fitr is obligatory on every Muslim. They are required to pay as charity 2.5% of gold or savings they possess that doesn't serve as basic food. Zakat is given after performing Eid dua and before breaking the fast by head of the family. Muslim law considers it as an income tax paid to help the deprived ones including gareeb, yateem, bewa (poor, orphan and widows) and others in the name of Allah-tala," Maulana Mohd Ali Farooque of city's biggest Madrassa Israul Muslimihin told TOI.

Anticipating for a raise of 20% in collection this year, Farooque said that Fitrah (fitr) was given in form of 2.45 kilogram of wheat or equivalent amount on behalf of each member of family. Zakat is a process of purification of soul on individual level and a cure against miseries. Rich are obliged to come in contact with poor and the poor with even less fortunate, he said.

Among dozen families that distribute free rations, clothes, money and fees for education, Javed Khan's family plans to begin shopping for clothes they give as charity to family of servants and poor for the whole year. Shelling around a Rs 1 lakh on Eid the Khan family in Raipur encourages charity and feed more than 100 people on day.

"According to Islam, a part of all the savings and gold that we possess is for the needy ones. While there were many who aren't honest to shell out stuff, our family serves for the whole month. Starting from servants at home, neighbours, relatives, society and Madrassa, Zakar-al-fitr is given to all Muslims we know," said Khan.

Similarly, Siddqui family in Durg pays to students for professional courses in engineering, medical and MBAs till they finish the course. "Now that we have been practicing this for last 20-25 years, students who have lost their parents approach us for help. Islam gives importance to education and equal rights to all," Rasheed Siddqui said. Meanwhile, Monday night is going to be a late night shopping affair for most families which would be followed by midnight gathering and namaz (prayers) at mosque if the moon is sighted.

(The Times Of India / 29 July 2014)
---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India: Hyderabad trust uses zakat to promote education

A Muslim trust here is showing the way how a collective system of 'zakat', an obligatory system of charity in Islam, can lift the community out of poverty and illiteracy. 

Though many organisations collect zakat and use it for the poor and needy, the Hyderabad Zakat and Charitable Trust is delivering tangible results in the area of education.

 More than 25,000 students are studying in educational institutions run by the trust in Telangana, Andhra Pradesh, Karnataka and Maharashtra. Started in 1990, the trust, headed by philanthropist Giasuddin Babu Khan, has so far helped over 400,000 students graduate. Many of them are now engineers, doctors, lawyers and chartered accountants. 

"The trust has done a lot of work in education. We have so far spent Rs.110 crore on our activities," Mohammed Ziauddin Nayyar, trustee, Foundation for Economic and Educational Development (FEED), a part of Zakat Trust, told IANS. 

Zakat, one of the five pillars of Islam, is a mandatory charity for every well-to-do Muslim as a measure to remove economic inequality.

According to Islamic scholars, every Muslim whose assets reached 'anisab' or minimum value (current market price of 60.65 tolas of silver) has to pay 2.5 percent Islamic annual tax on his wealth. Most Muslims pay this during the holy month of Ramadan. 

For want of a collective system of zakat, the money gets scattered among individuals and charity groups. The Hyderabad trust is trying to show how zakat, if properly channelled, can achieve its purpose of eradicating poverty and backwardness. 

The trust, which believes that education is the most powerful weapon to battle poverty, has adopted 105 government-run Urdu medium schools. Over 3,000 students also study in its five English-medium high schools in Telangana.

 Focussing on excellence in education, the trust last year set up the Hyderabad Institute of Excellence (HIE) to hone the skills of 10th standard toppers from poor and needy families. More than 250 students are studying in 11th and 12th standards at its sprawling 120-acre campus near Hyderabad. 

They are also receiving coaching for entrance exams for professional courses. HIE will also have a high school from next year. "HIE is in line with the vision of Giasuddin Babu Khan to provide world-class facilities to poor but bright students so that they can excel and become assets," said Nayyar. The trust also helps the poor and needy with financial assistance to make a living. This Ramadan it distributed ration and clothes to 3,000 widows to help them celebrate Eid. 

The young widows were given packets worth Rs.950 to Rs.2,000. The trust also motivates young widows to re-marry and provides an assistance of Rs.25,000 each. It has helped in re-marriage of 120 widows. Last year, the trust received over Rs.9 crore zakat. 

It has a network of 60 employees to identify the deserving. The families of Babu Khan and Abdul Aleem Khan, who heads FEED, contribute the maximum for the trust. Hyderabadi Muslims settled in the US and the Gulf also make a sizable contribution. "After seeing our activities and the transparency, more NRIs are coming forward to contribute," Nayyar said. The trustees, however, feel that what the trust receives is not even one percent of the zakat Muslims can pay in Hyderabad and other parts of Telangana.

 According to Babu Khan, the potential of zakat collection in Telangana is Rs.1,000 crore but the actual collection and distribution is only Rs.100 crore. Community elders say only 10 percent Muslims pay zakat to institutions, mainly madarsas, while 90 percent pay to individuals who approach them. "They don't even check whether those seeking zakat are really poor and needy. Thus the really deserving who don't beg are deprived," said a member of Jamaat-e-Islami, which is active in distributing zakat. Activists also rue the fact that many wealthy Muslims don't pay total zakat. "If all Muslims pay zakat in full and it is channelled properly, the community can overcome the problem of poverty," said Nayyar.

(One India News / 23 July 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

H Abdur Raqeeb on The Need for Islamic Banking in India

India's central bank is reviewing regulations on Islamic banking in Asia's third-largest economy.

The Reserve Bank of India has set up an internal committee to examine the matter, unnamed sources told Firstbiz.com.

The RBI has reportedly set up a three-member panel comprising senior RBI officials Rajesh Verma, a deputy general manager with the Department of Banking Operations, Archana Mangalagiri, general manager, Non-banking Supervision and Bindu Vasu, joint legal adviser.

Islamic banking is practiced in several countries, including in the UK, which in June issued an Islamic bond that attracted orders in excess of £2bn ($3.4bn, €2.5bn) from global investors.

What is Islamic Banking?

Islamic banking follows the Shariah law. The model differs from conventional banking in that it does not accept deposits, only investments, which essentially make banking a venture capital activity. The model also encourages interest free loans in a bid to boost financial inclusion.

Islamic banking is also based on profit and loss-sharing; the model forbids the payment and receipt of interest and prohibits investment in businesses that are considered sinful – such as adult entertainment or the production of alcohol.

Speaking to IBTimes UK, H Abdur Raqeeb, General Secretary, Indian Centre for Islamic Finance (ICIF) told us how India stands to benefit from the roll out of Islamic banking.

Q: Do you think that India is a key place for growing the Islamic banking market and why?

AR: The misconception among many Indians is that Islamic banking caters to only the Muslim population. The model promotes financial inclusion. India's small farmers and petty traders for instance are still not part of the banking system despite over 40 years of nationalisation of the country's major banks. They cannot go to the capital markets to raise money. Islamic banking can cater to [the millions] outside the commercial banking system.

In addition, Muslims' savings are not being ploughed back into the Indian economy as a large section of the Muslim population here does not bank with commercial lenders.

Q: What needs to be done in terms of rolling out Islamic finance in India?

AR: Political will is necessary. The government has to take a decision on Islamic banking and the RBI has to regulate it. The central bank has to look into it.

We have been pleading with the government and have met Finance Ministry officials in the previous [Congress Party-led] regime.

Moreover, we don't have to use the term 'Islamic banking' in India. We can refer to it as alternate banking, which is what the UK calls it. Or, we could call it participatory banking, which is what they call it in Turkey.

Q: But, if India adopts Islamic finance on a broader scale, will this mean that a lot of the legal framework will have to change?

AR: Not much actually. We in India can borrow and benefit from examples of Islamic banking in the UK or in Singapore.

India Reforms

The question about whether India should allow Islamic banking has been debated for long.

In 2008, India's Planning Commission roped in Raghuram Rajan, the present RBI governor and a former Professor at the University of Chicago, to head its High Level Committee on Financial Sector Reforms (CFSR).

The CFSR, tasked to identify 'real sector reforms', recommended that New Delhi 'permit the delivery of interest free finance on a larger scale, including through the banking system.

(International Business Times / 22 July 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India: Islamic financial institutes beneficial to infra

AHMEDABAD: Infrastructure is at the top of the newly appointed Prime Minister's priority list, and it can get a facelift from various Islamic financial services due to features likes avoidance of charging interest on principal (Riba), according to a study undertaken at Cept University. 

Yash Majeethia, MTech, infrastructure engineering and management, faculty of technology, Cept University, and Tushar Bose, assistant professor, faculty of technology, Cept, have authored a study, 'Islamic Financial Instruments an Opportunity for Financing Infrastructure in India' that has been published in 'Journal of Business Management and Social Sciences Research' recently. 

According to the study, introduction of Islamic finance can play a crucial role in order to bridge the gap and support India in achieving anticipated growth projections, especially in infrastructure sector; as operations in Islamic financial system are characterized by avoidance of Riba, the money invested cannot be channelized in other areas. 

India has an estimated infrastructure funding deficit of Rs 14,60,784 crore for the twelfth five year plan (2012-2017). "Islamic finance services can be banking or non-banking in nature. It is not limited to any community and can be benefited from irrespective of religion. One can see it as participatory banking," Majeethia said. 

Kerela is the first state that has come up with an Islamic non banking financial services company in the country in 2013. It has already received clearances from the Reserve Bank of India, Security and Exchanges Board of India and the Waqf board. Similar models can be run in other parts of the country too. 

Why Islamic financial institutions? 

Islamic financial institutions rest their objectives and operations on the Shari'a law, Islamic law, based on a verse of the Holy Quran that says "Allah has allowed only legitimate trade and prohibits interest". It is based on the philosophy of risk sharing; both lender and the borrower share the risks as well as the returns that are incurred from a project. This discourages fixed returns in terms of predetermined interest rates known as Riba. 

Secondly, it emphasizes on socially responsible investment, characterized by avoidance of Riba, avoidance of Gharar (involving in activities relating to uncertainty or speculation), avoidance of Zulm (oppression of one party by the other), avoidance of Haram (discouragement of services and goods which contradict the Islamic value), introduction of Zakat (laying a specific predetermined Islamic tax on various activities) and focusing on Halal (activities that are religiously permissible).

(The Times Of India / 17 July 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India: Scholars decry 'zakat' to fake organizations

HYDERABAD: Leading scholars of Islam in the city have advised Muslims to exercise caution in giving away zakat or mandatory charity as there has been a growth of 'spurious' institutions collecting alms for personal gains.

"Make thorough inquiries about the institution before you dole out zakat. Several instances have come to our notice where people posing as madrasa (religious school) representatives have been collecting money. Although you have good intentions, your deed is going waste as it is not reaching the deserving institutions," said Syed Khaja Moizuddin Ashrafi, main sermoniser at Kishanbagh mosque. Zakat is being misused by the collectors in several cases, other scholars said. Zakat, according to Islam, is mandatory charity deduced at the rate of 2.5 per cent from the annual savings of a Muslim and distributed either among the poor or on education, mainly during Ramzan.

According to noted philanthropist Giasuddin Babukhan, if properly organized and motivated, the Muslims in Telangana could raise zakat to the tune Rs 1,000 crore. But the actual collection and distribution of zakat is in the range of only Rs 100 crore.

"Collection of zakat and its distribution has not been organized. Every person who takes out zakat gives it away to whoever he or she feels is deserving," he said.

Babukhan's Hyderabad Zakat Charitable Trust has been able to raise Rs 10 crore from a single resource of zakat every year.

"The potential is huge provided Muslim community decides to take up zakat as a compulsory system to help eliminate poverty and provide education," he said.

Asharafi is active on social media mobilising people to give zakat to the "genuinely poor and needy institutions." Unfortunately, those who give zakat neither have the time to verify the authenticity of people who knock at their doors nor the institutions they represent.

Consequently, in many cases, zakat ends up in the coffers of fictitious madrasas and other fake welfare organizations.

A senior academic with Jamia Nizamia, Maulana Imtiyaz Ahmed, said zakat can be distributed among eight categories- the poor, destitute, those burdened with debt, pilgrims without support system and religious schools among others.

According to Ahmed, owing to the intrusion of suspect characters in the zakat collection, the amount of charity to recognized madrasas has declined substantially over the years.

General Secretary of the Deeni Madaris Board (Board for religious schools) Maulana Khalid Saifullah Rahmani, said about 20,000 children are studying in about 200 madrassas in GHMC limits. "In the last few years, some prosperous Muslims have begun to give zakat to welfare associations breaking their tradition of supporting madrassas because of cases of cheating," he said.

Appealing to Muslims to support madrassas, Maulana Rahmani lauded the trend to donate zakat to one's own relatives. "Madrasas are not only providing education to children but also food and shelter. Give zakat to such religious schools," he said.

(The Times Of India / 16 July 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

FDI likely to boost India’s Islamic finance market

Foreign direct investment is likely to boost India’s Islamic capital market in the coming years as participatory finance is gaining popularity in the country.

A Delhi-based Indian business group said it was seeking Islamic finance to establish a buffalo meat plant in Bihar at a total cost 265 million Indian rupees ($4.33 million).

“We hope the success of our project will encourage more entrepreneurs to carry out participatory ventures making use of interest-free funds available in India and the Middle East,” said Shahid Ahmad, director of ABZ Agro Foods.

Speaking to Arab News, Ahmad highlighted the growing prospects for Islamic finance in India.

“Such ventures will help mobilize funds of those who do not want to deal with interest and will contribute to boosting the country’s real economy,” he said.

Asked why he opted for Islamic finance despite loan offers from several commercial banks, he said: “It was primarily because of my religious faith that prevents me from dealing with interest-based finance.”

He emphasized that investors in the buffalo project would gain good profit, not less than 27 percent, much higher than interest received from bank deposits. “Shareholders in our project are considered our partners.”

Ahmad said the project would benefit a lot of people in Bihar, especially the poor.

“It will also boost related industries such as transportation, packaging and animal farming,” he added.

The government has offered to give a subsidy of Rs.53 million to support the project while developers are contributing Rs.52 million.

“We would like to mobilize the fund required for the project on a participatory basis through equity shares and foreign direct investment, which is permissible as per the Indian laws,” Ahmad said.

The group is seeking funds from potential Saudi and Indian private investors, offering two million equity shares worth Rs.160 million to start the project.

He thanked the Jeddah-based Indian Forum for Interest-Free Banking (IFIB) for taking the initiative to promote the project among potential investors in the Kingdom.

V.K. Abdul Aziz, secretary-general of IFIB, said existing Indian laws allow entrepreneurs to make use of the huge Islamic funds.

“All religions, including Hinduism, Christianity and Islam have prohibited interest, even if it is one percent,” he told Arab News.

He hoped that more businesses like ABZ Agro Foods would come forward to utilize untapped interest-free funds available from Muslim NRIs, and Gulf businessmen and businesswomen.

“We have got vast scope to mobilize funds from all over the Middle East to meet India’s financial requirements to carry out its development and expansion projects,” Aziz said.

“If this (buffalo) project is successfully implemented, it will enhance the reputation of Islamic finance and encourage more entrepreneurs to make use of this facility on a large scale,” the IFIB official said, adding that all Indians would benefit from this participatory scheme.

Mohammed Shakir Qureshi, another director of ABZ, said financial experts have emphasized the project’s feasibility and profitability.

Indian meat is very much in demand in world market. India accounts for 57 percent of the world’s buffalo population.

“Only two to three percent of buffalo meat is currently processed and the industry is growing at an annual rate of 25 percent,” he said. We’ll get cheaper raw material and will be able to supply quality meat,” he added.

(Arab News / 20 March 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India takes key step toward full-fledged Islamic banks

THIRUVANANTHAPURAM: India is planning to set up a body to fine-tune and promote Islamic finance before issuing license to start full-fledged banking operations, according to one of the country's senior ministers.

“The formation of the entity is an important step forward. We need to set a framework for rules for different financial products to be offered by these banks or through the Islamic banking windows,” said Rahman Khan, India's minister for minority affairs.

He was talking to Arab News on the sidelines of the international seminar on Interfaith Harmony and Tolerance in Kuala Lumpur organized by the International Islamic University Malaysia (IIUM) in association with Kerala-based Ma'din Academy recently.

“We will introduce a financial product like Tabung Haji which would be a great relief to those who want to undertake the pilgrimage,” said the minister, who has aggressively been pursuing the idea ahead of the general elections two months away.

Tabung Haji, Malaysia’s Haj management system, provides an opportunity for Haj aspirants to systematically invest money that grows and allows the depositor to undertake the pilgrimage to the holy cities of Makkah on its maturity.

The money is reinvested in Shariah-compliant vehicles that give reasonable returns.

“It mainly goes into infrastructure funding. We build roads, bridges and other basic infrastructure using this fund. There are big office complexes and housing projects that it has funded,” said Rajah Mohammed Abdullah, chairman and chief executive officer of the Muslim World Biz, which holds global summit on Islamic finance here every year.

Last year, India's central bank, Reserve Bank of India, decided to give license to non-banking financial companies to offer Shariah-compliant products and Cheraman Financial Services Limited (CFSL), launched by Kerala with the support of prominent expatriate entrepreneurs in the Gulf, was first to get the RBI license.

Khan wrote to the RBI Governor, Raghuram Rajan, saying it was the duty of the State to facilitate every citizen to practice and follow their religion under the Constitution and the governor, while accepting his view, wanted certain amendments to the laws concerned. Khan has urged the ruling party leadership to expedite the process before the elections.

“This is a great development everybody was looking forward. It'll help India attract a lot of foreign and domestic investments in infrastructure development and other core areas,” said Siddeek Ahmed, one of the directors of the CFSL.

India needs huge investments to put its economy back on track and to give the much-needed push to its ambitious infrastructure development plans. The Islamic finance is estimated to be a US$2.1 trillion industry by the end of this year and it is seen as a small but decisive step towards opening up the sector to interest-free banking.

“I personally hope that the proposed Haj fund will ultimately lead to the undesirable practice of government offering subsidy to Hajj pilgrims,” said Ahmed, who heads the Saudi-based ITL-Eram group.

“Cheraman did not to set up such a fund because we found the government funding was not desirable as its sources of income include liquor and gambling”.

Nonresident Indian billionaires based in the Gulf, P Mohammed Ali, PNC Menon and CK Menon, are among other directors of the NBFC that follows Islamic principles in which the state government holds 26 percent equity.

It was not allowed to accept deposits from the public or offer retail banking services, which needs amendments in Indian laws, making it inaccessible to ordinary citizens who want to make small investments.

In fact, Raghuram Rajan, the chairman of the RBI, was serious about banking sector reforms that would pave the way for full-fledged Islamic banks and Islamic banking counters at commercial banks like in many other countries, especially in Europe.

In 2008, a high-level committee on financial sector reforms headed by Rajan recommended interest-free finance and banking in the “interest of inclusive and innovative growth” and suggested taking measures “to permit the delivery of interest-free finance on a larger scale, including through the banking system”.

Islamic banking and finance is now present in over 75 countries including Australia, France, the UK, Hong Kong, Singapore, Luxembourg, South Africa, Sri Lanka and Malaysia, which claims to be its capital.

In India, there are a lot of Muslims who did not claim interest on deposits or give them in charity and, according to a 2009 study there are unclaimed interest worth Rs50bn lying in Kerala banks alone.

Cheraman, named after the king who is believed to have built India’s first mosque in the Kerala town of Kodungallur, plans to offer leasing and equity-finance products under Islamic principles to begin with.

It has already started funding startup companies and infrastructure projects and floated the Rs 2.5bn Cheraman Fund, a private equity fund with a minimum of Rs10 million set by Securities and Exchange Board of India (SEBI) per investor.

It also has a subsidiary Cheraman Infrastructure for “channelizing ethical investments for developing world class industrial, social and residential infrastructure” in Kerala.

This business vertical focuses on infrastructure development activities through Build Operate and Transfer (BOT) and other related modes.

The company targets development of industrial and knowledge parks, standard design modules, logistics parks, special economic zones, electronic parks, roads and urban transportation, social infrastructure like hospitals and educational institutions, housing and shopping malls.

(Arab News / 18 Feb 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India, China may step towards Islamic finance

LAHORE - India and China may step towards the Islamic finance in 2014 where more than 200 million Muslim populations are in compatible search of a financial system with their religious beliefs and thoughts. There is no doubt that international financial crisis will not hit the Islamic finance industry but due to the Arab Spring, Islamic finance industry has faced recession in some countries of MENA but there are chances of revival in 2014.

These views were expressed by Islamic Finance expert, Zubair Mughal who is also CEO of Al Huda Centre of Islamic Banking and Economics (CIBE) while commenting on Islamic finance industry in 2014. According to him, Islamic finance will grow with rapid pace in the year 2014 and its volume will pass through $ 2 trillion where Islamic banking keeps 78%, Sukuk 16%, Takaful 1%, Islamic Funds 4% and Islamic Microfinance has 1% share in the Islamic Finance industry. In the year 2014, Dubai and London will be in competition to be the global hub of Islamic Banking and Finance while Kuala Lumpur will also attempt to be in this contest but the Islamic finance industry can be grown more through synergizing approach and alliance with industry stakeholders rather than setting any competition.

He said that the Islamic finance industry growth will go on double digit in 2014 which will turn the $ 1.6 trillion volume of Islamic finance industry in December 2013 to US $ 2 trillion by the end of 2014 including North African countries (Tunisia, Libya, Morocco, Senegal and Mauritania etc), rising trends of Islamic finance in Europe and UK, also the rising and substantial share of international market of Sukuk shall contribute to it.

He said that Sukuk will grow rapidly in 2014 and Muslim countries including non-Muslim countries e.g UK, China, South Africa and Europe etc will also get benefit from it which will enhance the growth in Islamic finance industry but Takaful Industry is not supposed to have any substantial breakthrough.

It is being hoped that 2014 will prove better period for Islamic Microfinance industry as different international institutions including Islamic Development Bank (IDB) have declared it a potential tool for poverty alleviation around the globe. He also added that Islamic finance industry may face recession in certain countries including Indonesia while in Nigeria and Tunisia it may face some problems on religious and political grounds. He said that the Islamic finance initiatives in America and Canada including Latin American countries (Brazil, Argentina and others) have been taken and it is hoped that Islamic Funds market will come into existence in these regions by the year 2014.

To a question, Zubair Mughal said that there are multiple opportunities in Association of Southeast Asian Nations (ASEAN) countries to promote Islamic Finance, through which Halal Industry can be flourished rapidly in the region.

He stated that Islamic Finance and Halal Industry are complement to each other. Micro and Small Medium Enterprises (MSME’s) can be energized by utilizing Islamic Finance concept in the region which will be cause to reduce in poverty and ultimate socio-economic prosperity in the ASEAN member Countries. Presenting an analysis on ASEAN countries including Malaysia, Indonesia, Brunei Darussalam, Loa PDR, Myanmar, Singapore, Thailand and Vietnam, he stated that the approximate total population of ASEAN countries is 600 million including the Muslim Population more than 40% (240 million) which is a potential indicator for Islamic Finance growth whereas in Malaysia, Indonesia and Brunei Darussalam already have significant contributions in Islamic Banking, Takaful, Sukuk and Islamic Funds, while Philippines and Thailand are being considered as future potential markets for Islamic Banking and Finance in ASEAN countries.

He explained that Islamic Banking and Finance is the system not a religion which can be utilized by Muslim and Non-Muslims to get absolute benefits from the best services of Islamic Banking and Finance as its best example is the South Africa where Muslim population is less than 2% of the whole population but it has more than 5 Islamic Banks, 13 Islamic Funds and 2 Takaful companies working actively, which are equally famous among Muslims even non-Muslims communities because of their best practices and services.

He said that Philippines is an important country of the region with having 100 million populations, approximately, containing Muslim population by more than 7% which bears it out that there are momentous chances for the promotion of Islamic Finance and, apparently, government of Philippines found active in this concern and it will, definitely, energize Islamic Banking and Takaful in result.

(The Nation / 06 Jan 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com