Nissan to lay off thousands of workers as sales drop    Trump picks Susan Wiles as White House chief of staff    Three charged in connection with Liam Payne's death    Israel passes law to deport relatives of attackers, including citizens    Monkey mayhem in South Carolina after 43 primates escape research facility    Russian anti-war teenager faces five years in jail after failed appeal    Uproar in Ghana after president unveils his own statue    BD and INS partner to elevate standards of infusion care in MENAT    Qassim emir launches 52 health projects costing a total of SR456 million    Dubai Design Week launches its 10th edition, celebrating creativity and innovation    Fakeeh Care Group reports 9M-2024 net profit of SR195.3 million, up 49% y-o-y driven by solid revenue growth and robust profitability    GASTAT: Passengers of public transport bus and train soar 176% and 33% respectively in 2023    HRT does not impact life expectancy — UK health body    Liam Payne's body to be flown back to the UK    Arab leaders and heads of state congratulate US President-elect Donald Trump    Neymar suffers muscle tear, out for 4-6 weeks    Suspect arrested for banking fraud totaling SR493 million as Nazaha pursues corruption charges    Al Nassr secures 5-1 victory over Al Ain to edge closer to knockout stage    Al Ahli extends perfect start with 5-1 victory over Al Shorta    Mitrovic's hat-trick leads Al Hilal to 3-0 victory over Esteghlal    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Global Islamic finance industry under study
Published in The Saudi Gazette on 16 - 09 - 2015

MANAMA — The World Islamic Banking Conference (WIBC), considered by many as the Islamic financial services industry's compass for over two decades, continues to live up to its reputation after officially announcing today that its 22nd annual edition will provide industry leaders with a unique opportunity to critically assess Islamic finance's 40-year history. This coming December, regulators, CEOs, scholars and other leaders from the Middle East, East Asia, Africa and Europe will assess and reflect upon the achievements, challenges and opportunities in the rapidly growing Islamic finance industry, currently amounting to $2 trillion.
WIBC will take place on Dec. 1-3, 2015 at the Gulf Hotel in Manama. While it cannot be denied that Islamic finance has grown tremendously in the past 40 years from a very small base, there is a growing belief that the industry's progress should not be assessed purely on asset growth. As such, the industry is being called to address several questions. Should there be a shift away from asset and profit growth towards other variables such as Islamic authenticity and social & economic value? How can Islamic finance advance a truly profit and loss sharing system in parallel to complying with global prudential standards (e.g. Basel III)? How can the industry develop a new regulatory architecture to support small and medium sized enterprises (SMEs), as well as asset-backed financing in order to complement asset-based structures and public infrastructure investment financing?
The momentum for historic discussions on these matters is building up to December's WIBC, which will include a much anticipated power debate between some of the industry's preeminent leaders. They will address the core question of how the current system can converge with its original proposition. Datuk Professor Rifaat Ahmed Abdel Karim, CEO of International Islamic Liquidity Management Corporation (IILM), Noor Abid, Board Member of Kuwait Finance House Group, and Tirad Al-Mahmoud, CEO of Abu Dhabi Islamic Bank (ADIB), are only a few of the pioneers who will address the landmark gathering of more than 1500 attendees.
With regards to the question of convergence, Noor Abid, a leading advisor to the Islamic finance industry for over two decades, stated: “Islamic financial institutions (IFIs) need to structure their business models in such a way that the socioeconomic objectives go hand in hand with commercial and profitability goals.” Acknowledging WIBC as the definitive platform for shaping industry dialogue, he explains further: “There are now conclusive studies suggesting that doing good to the society you serve, has the potential to generate positive long term economic performance. It is time that IFIs calibrate their objectives and performance measures such that they are able to serve their communities in a positive manner, while aiming for high quality returns.”
He concludes by suggesting next steps: “one way forward for the development of Islamic finance based on its true principles would be to adopt some of the leading practices from the impact investment communities and incorporate integrated reported initiatives”
International standard setting organizations such as the Accounting and Auditing Organization for IFIs (AAOIFI) and the Islamic Financial Services Board (IFSB) have been formative in helping the industry develop a more “integrated” approach, coupling profitability and values.
However, while the relevant standard setters may issue appropriate frameworks or standards, it is essential to secure joint commitment from all stakeholders within the system. This is partly because of the sheer challenges of adopting both international and industry standards. There is growing concern about a disconnect between what is required by international prudential standards (e.g. Basel III) and the principles of Islamic finance. For instance, Islamic financial institutions have an affinity towards investment management, as well as credit provision to underserved segments (e.g. micro and small and medium sized enterprises (MSMEs)). Financing of MSMEs and the risk charges imposed on profit and loss sharing assets by Basel III regulations mean that Islamic banks, while benefiting from greater prudential stability, will drift further away from credit provision to the real sectors.
Making the case for tapping into this market segment, he continues: “Given that the global Muslim population represents at least a quarter of the global population and Shariah-compliant assets of $2 trillion represents only a small fraction of the total global financial assets, there is tremendous opportunity for Islamic banks to target this population thereby increasing financial inclusion.” In Tirad's view, the way to increase financial inclusion is for Islamic banks to expand their “reach outside major urban centers by investing in microfinance initiatives and through alliances with the relevant governmental institutions.”
Resolutions of the critical matters that the Islamic finance industry faces will be moderated by Dr. Sayd Farook, Vice Chairman and CEO of Middle East Global Advisors, the conveners of WIBC throughout its 22-year history. As such, it is perfectly apt that this year's WIBC, focusing on the industry's assessment of its 40th anniversary, will take place under the theme ‘New Realities, New Opportunities'. — SG


Clic here to read the story from its source.