Central Asian and African Countries are the New Destinations of Islamic Finance: Zubair Mughal

Islamic Banking and Financial Industry Lacks Better Human Resources

29/06/2012

Muhammad Zubair Mughal, CEO, AlHuda CIBE is speaking at The First International Forum on Islamic Banks and Financial Institutions, at Jordan

The First International Forum of Islamic Banks and Financial Institutions held under the patronage of His Excellency, Dr. Fayez al-Tarawneh– Prime Minister of Jordan has come to end today in Amman; the Capital city of Jordan. The Forum was jointly organized by General Council of Islamic Banks and Financial Institutions - Bahrain and Strategy - Jordan. In this forum, different topics like Emerging trends of Islamic Banking in Arab Countries, Legal and Taxation matters of Islamic banking, Role of International Institutes in Islamic Banking and finance and Importance of Education and awareness of Takaful and Islamic banking etc. were discussed. A good number of Experts & Professionals from different countries like Pakistan, Malaysia, Palestine, Indonesia, Bahrain, UAE, Qatar, Saudi Arabia etc. participated in this mega forum. While addressing to the concluding session, Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics, Mr. Muhammad Zubair Mughal said that presently, Islamic banking is growing at a very rapid pace and the Central Asian Countries (Kazakhstan, Afghanistan, Tajikistan, Uzbekistan, Kyrgyzstan, Azerbaijan) and African Countries (Nigeria, Tanzania, Kenya, Ghana, Tunisia, Senegal etc) are its new destinations of Islamic Banking and Finance where the rapid increase in the demand of Islamic banking is being observed and majority of these countries are providing shield to Islamic banking and finance industry by bringing alterations in Laws through parliaments. While presenting the review of present Islamic Finance Industry, he said that the market of Islamic finance has reached to $1.3 Trillion, in which the share of Islamic banking is 77% ($1 Trillion), share of Sukuk is 14% ($180 Billion), share of Islamic Funds is 5% ($64 Billion) and share of takaful is 1% ($12 Billion) whereas the share of other Islamic financial products like Islamic Leasing, Mudarabah Companies, Islamic Microfinance and Islamic REITs is 3% ($44 Billion). He said that in comparison with the rate of growth of Islamic Banking; the Islamic banking graduates are not being produced accordingly due to which there is a lack of supply of Man Power than the demand of Islamic Banking and finance which should be resolved immediately. He said that not only new Experts of Islamic banking and finance should be produced to be utilized in the emerging market of Islamic banking and finance but the non-qualified personnel in Islamic banking and staff of conventional banks should be changed into Islamic Financial experts so that Islamic banking could be run by qualified Islamic bankers. He further said that Islamic banking and Finance should not be only for well-off, Business personnel or middle class but its benefits should also be disseminated to poor through Islamic Microfinance so that they could get rid of poverty and live their lives respectfully through proper employment.

AIG, Mitsui expand in Malaysia

Malaysia is attracting global companies such as American International Group Inc and Mitsui Sumitomo Insurance Co seeking to tap growth in the country’s US$4 billion Islamic insurance market.

Mitsui Sumitomo said on Jan. 28 it’s in talks to buy a stake in a local operator offering takaful, or Shariah-compliant insurance. New York-based American International formed a joint venture with Alliance Bank Malaysia Bhd in January, four months after winning a licence from the central bank.

The entrance of more insurance firms will increase the pool of funds looking for longer-maturity debt in Malaysia as the government embarks on a 10-year, US$444 billion development program. Malaysia is giving tax incentives to foreign companies setting up takaful businesses and has eased ownership rules in domestic institutions to aid growth in the industry.

“Insurers are in the best market because of its depth and liquidity,” Mohd. Farid Kamarudin, who helps manage RM1.3 billion (US$428 million) of Islamic assets at Kuala Lumpur-based AmInvestment Management Sdn Bhd, a unit of the fourth-biggest underwriter of sukuk last year, said in a Feb. 7 interview. “This is the only market where you can buy sukuk with maturities of up to 20 years or 30 years.”




Ownership limits

Takaful accounted for 10.9 per cent of Malaysia’s total insurance market as of September, central bank Deputy Governor Mohd Razif Abd Kadir said in Kuala Lumpur on Jan. 28. In contrast, Islamic banking makes up 20 percent of the total banking industry.

Takaful is based on the Shariah principle of mutual assistance, where two parties agree to pay into a fund that will be used to assist each other in times of need.

Assets held by operators of Shariah-compliant insurance in Malaysia reached RM12.4 billion at the end of 2009, with RM3.52 billion raised in premiums, central bank data show.

Courtesy by: Business Times