ISLAMIC FINANCE TODAY – LATEST ISSUE

03rd November 2009

Insha Allah the latest issue of ‘Islamic Finance Today’ Magazine will be released next week.

Editor Mr. Asiff Hussein states that the negotiations are underway to take this magazine to the Global market.

May Almighty Allah make it a success.

FIRST BARAKAH INVESTMENTS – YET TO MAKE AN IMPACT

03rd November 2009

First Barakah Investments that was to bring in new capital of LKR 250 Million in October, did not materialise. It is learnt that Inshal Allah the new capital will be introduced during November.

Mr. G. Sivajothi is the Chairman and Mr. L. Jamaldeen is the Executive Director. Mr. M.M. Rajabdeen is also one of the Directors.

According to company website http://barakah.lk, Mr. Shibly Aziz, President Counsel, also has joined as a consultant.

Following scholars are in the Sharia’a Board.

• Ash-Shaikh Moulavi Niyas Muhammed – Chairman     
  Founder and Managing Director of Ihsaniya Arabic College, Colombo. Member of the Executive Committee of All Ceylon Jamiyyathul Ulama and  serving on Shari’ah Supervisory Boards of various Islamic Financial Institutions.         

• Ash Shaikh H. Abdul Nazar – In House Shari’ah Supervisor

• Ash Shaikh Thayyoob Mufti – Al Hashimi Al Malahiri
  PhD in Islamic Shari’ah. Lecturer in Ihsaniya Arabic College, Colombo, Sri Lanka  

• Ash Shaikh Rais Mufti – Representative Central Province

• Ash Shaikh Omardeen Moulavi – Representative Central Province

• Ash Shaikh Burhan Moulavi – Representative Central Province

It has 4 branches in Kollupitiya, Pettah, Sarikkamulla and the ladies branch.

Mr. M.I.M. Razeek who was the Managing Director/CEO resigned recently and now functions as a consultant.

FIRST GLOBAL INVESTMENTS – CHANGES TAKING PLACE

03rd November 2009

We have seen many changes taking place at First Global. Mr. M.H.M. Faizer, who assumed duties as a strategic advisor couple of months ago has ended his service.

The Deputy CEO Mr. S.H.M. Faraaz who joined First Global recently  is in the process of addressing the operational issues. The new capital infusion is expected towards early January 2010 to facilitate obtaining Finance Company Licence to comply with the regulatory issues.

Mr. Faraaz has about 20 years banking experience. When he was at Seylan Bank had an opportunity to serve in Oman. He also worked for Thomas Cook before joining Amana Investments.  Mr. Faraaz has following qualfications in his profile. MBA,BBA,AMABE,DIBM,DHRM,DIM,PGDIIB.

He has a big task on his shoulder to streamline the process to facilitate obtianing the regulatory approvals.

AMANA BANK OPENING DELAYED

30th October 2009

Amana Investments that received provisional licence to open a commercial bank was supposed to commence banking operations in October. However, due to certain constraints, things did not work according the plan. They have requested permission from Central Bank to extend the period. Their Malaysian investors also were in Sri Lanka recently. It is also learnt that the aditional capital is coming from Kuwaiti investors. Insha Allah Amana Bank, the first Islamic Bank in Sri Lanka may open the doors in January 2010.

As we all know ‘every thing in the hands of Almighty Allah.’

Therefore please include in your prayers that May Almighty Allah make things easier for them.

FIRST ISLAMIC BANK IN SRI LANKA

Amana Investments has received the provisional Licence to
commence banking operation. At present Amana is raising
capital of Rupees 2.5 billion, by private placement. Each
share has been priced at Rs. 5/- with a minimum investment
of 1000 shares.

Insha Allah the bank will be launched towards October 2009.
Once opened it will be the first fully fledged Islamic Bank
in Sri Lanka.

ISLAMIC FINANCE TODAY

‘Islamic Finance Today’ is a Quarterly Magazine published by
Pioneer Publications – Sri Lanka. Since launch of its first Issue
in September 2006, it has published many articles on Islamic Finance.

Listed below are the titles of the articles. Previous issues of the
magazines could be purchased from Pioneer Publications subject to
availability. 

For enquiries, Please send an email to the editor Mr. Asiff Hussein on
email address: asiffhussein@yahoo.com with a copy to azharhome@hotmail.com 

Click here for more details.

 http://azharseylan.wordpress.com/islamic-finance-today/

Islamic Finance Interest Group to lobby for Budget blessings

23rd September 2009

By Santhush Fernando

Sri Lanka’s industry umbrella set up to develop alternative finance- Islamic Finance Interest Group, will hand over its proposals to the Government, to be included in the forthcoming Budget Proposals 2010 scheduled for November this year.

Speaking to The Bottom Line, member of the Islamic Finance Interest Group and Principle of leading audit firm- KPMG Ford, Rhodes, Thornton & Co. Suresh Perera, said that the Interest Group would meet today (26th August 2009), where the members would be presented with the recommendations. The Group is hopeful that the government would take a proactive role in the hitherto market-driven Islamic Finance industry, and jumpstart promoting Sri Lanka as an investment hub in Islamic Finance.

“We would be meeting on Wednesday (26th August 2009) to enlighten the members on our proposals. Thereafter we hope to present these proposals to the government to be included in the Budget Proposals for 2010. We would also request the Securities and Exchange Commission (SEC) of Sri Lanka, the possibility of introducing sukuk (Islamic bonds),” Perera said.

Currently the global Islamic finance industry stands at a staggering Rs. 110 trillion (US$ 1 trillion) and is expected to increase fivefold to a Rs. 550 trillion (US$ 5 tn) in twenty years time, Dharshan Bijur, Director- Corporate Finance, Islamic Finance and Investments of KPMG (England) said.

However until now the industry was market-driven and the industry players expected the government to actively engage in developing the industry through proper regulatory framework, he added.

Speaking exclusively to The Bottom Line, Prakash Jerome, an analyst of RAM Ratings Lanka Ltd, a leading Sri Lankan rating firm which organized the ‘Sukuk: Alternative Financing in Sri Lanka-2009’ Conference held yesterday (25th August 2009)  said that although the potential within Sri Lanka not been ascertained so far through a comprehensive study, it was thought be nearly Rs. 100bn.

“Although unsubstantiated, industry players estimate the country to have a potential of nearly Rs. 100bn. Muslims comprise nearly 7 per cent of Sri Lanka’s population, but do not have many Sharia’a -compliant investment options within the country, so most of the funds earned are re-invested in their businesses or in the informal economy,” Jerome said. “However the regulatory framework conducive for Islamic Finance should be in place. For instance since some Islamic Finance products are more like an investing in a business, the present high tax regime would be disadvantageous to those capital providers. Furthermore Ijara (Islamic leasing) has features of both an operating lease as well as a financial lease, so accounting policies should also be streamlined along with tax policies of the government,” he added.

Speaking at the Conference, Mohamed Ismail Shariff of Skrine & Co.- a law firm specialising in Islamic financing in Malaysia said that there was immense potential for Islamic finance as an alternative system of financing not only for Asia, but all over the world. “However there are lots of misconceptions to the effect that Islamic Financing is a system difficult to comprehend and to implement. But proper application of Sharia principles leaves room for lot of innovation. In Malaysia itself there are over 100 Islamic finance products,” he said.

Source: http://www.thebottomline.lk/2009/08/26/news27.html

Islamic banking worldwide ‘what is in it – for All of Us

A presentation made at the   2nd International Conference & Exhibition on Islamic Banking and Finance – Lahore, Pakistan. 25th August, 2008 by Muhammad Ikram Thowfeek

BOC AN-NOOR – BANKING SERVICES

01st October 2009

 The Bank of Ceylon (BOC), State-owned commercial bank has introduced (Sharia’a) compliant banking under the brand of ‘BOC An-noor’. The essence of Sharia’a compliance has been ensured with a Sharia’a Supervisory Board (SSB) comprising of eminent Sharia’a scholars in the country, separate firewall to protect the serenity of the unit and by applying the deposits to generate only Sharia’a permitted earnings. Well-experienced, dedicated and professional staff have been assigned to serve you.

BOC An-noor – products are common for any Sri Lankan, irrespective of their faith.

 You can access your BOC An-noor  Accounts to deposit or withdraw funds through:

• More than 300 branches island-wide
• More than 150 extension officer
• More than 130 BOC ATM points

 At present BOC An-noor  offer only Current Accounts. These are Sharia’a compliant Current Accounts where you deposit your money in your account under the concept of Qard (loan) and the bank to own these deposits while enabling the depositor to withdraw on demand.

 For BOC An-noor Currents Accounts, Overdraft facility will not be allowed under any circumstances.

 Further information could be obtained from following contact numbers

 Mr. Nilam                   + 011 2205030

Mr. Abdullah              +011 2205038

Mr. Bishry                   + 011 2205036  – Manager – Islamic Banking

Email: ibu@boc.lk

PEOPLE’S LEASING COMPANY – ISLAMIC FINANCIAL SERVICES UNIT

01st October 2009

 Peoples’s Leasing Company – Islamic Financial Services Unit, commenced in October 2005, entered the market three months later, and completed its third year of operations on a successful note.

The Islamic Financial Services Unit (IFSU) obtained Qard loan from People’s Leasing Head Office to commence its operation. According to the arrangements, loan funds would be repaid, once IFSU mobilizes own funds through Sharia’a based investments. Head office funds which stood at financial year 2007/2008 at LKR 661 million stands at LKR 291 million as at 31^st March 2009. The Net profit was LKR 19 Million and the Gross income was LKR 210 million for the for the year under review

Ijarah has formed the major component of the products and services offered by the IFSU, and is mainly utlised in the sphere of vehicle leasing. Ijarah revenue for the financial year 2008/2009 had been LKR 123 Million. The total Ijarah receivable portfolio now stands at LKR 719 Million.

Murabaha income as of 31^st March 2009 is LKR 81 Million. Murabaha facility mainly extended for used vehicles, equipment, machinery and other assets.

 The Mudaraba portfolio as at 31^st March 2009 was 551 Million.

 PLC IFSU now operates only in Colombo and Kandy and are very successful. Plans are underway to extend the services to seven other locations including, Batticaloa, Trincomalee, Pettah, Anuradhapura, Galle and Matara the other one may be in Kalumunai. The dawn of permanent peach in Sri Lanka after nearly three decades is expected to spur economic growth throughout the nation and specially in the Northern and Eastern provinces which augurs well for the industry.

PLC also has established strategic partnership with Amana Investments Ltd. The LKR 500 Million First Sukuk Bond that was to be issued in collaboration with the First Global Investments was postponed due to procedural delays with regard to regulatory authorities.

PLC has finalized arrangements acquire a Finance Company in order to strengthen and diversify its Islamic Financial Services and Insha Allah this will become a reality very soon.

Sharia’a Supervisory Board comprises

Ash Shaikh  Mufthi M.I.M. Rizwe
Ash Shaikh M.M.A. Mubarak
Ash Shaikh H. Abdul Nazar
Ash Shaikh Mufthi M.H.M. Yoosuf
Ash Shaikh M. Fazil Farook
Ash Shaikh M. Murshid Mulaffar

In-House Sharia’a supervisor is Ash Shaikh M. Usama A. Razak

Senior Manager Mr. A. Imruz Kamil who heads the unit stated that Islamic Finance Interest groups have taken action to propose amendments to the taxation and is confident that it will be successful. If everything goes well it will be a big boost to the growth of Islamic Finance industry in Sri Lanka.

Mr. M I M Razeek resigns from First Barakah

01st October 2009

Mr. M.I.M. Razeek, Managing Director – First Baraka Investments has
resigned from the Board. However, he will continue to extend his
services to First Baraka as a consultant.

First Baraka Investment presently undergoing a re-strucuring under the new Chairman Mr. G. Sivajothi. They have applied for the Finance Company Licence and are awaiting CBSL approval.

First Global Investments to offer Islamic Financial Advisory Services

25th September 2009

First Global Investments commences Islamic Financial Advisory services with the assistance of internationally acclaimed team of resource personnel. Following services will be offered.

• Setting up Islamic Banking windows, independent branches or subsidiaries from scratch
• Identifying product gaps in the Islamic market
• Training and building a career in Islamic Banking & Finance
• Assessing potential market appetite or size for different types of products
• Product Due Diligence
• Selection of appropriate internationally acclaimed Sharia’a Consultants and Supervisory Boards for ultimate issuance of product Fatwa, as well as for annual comprehensive Sharia’a review/audits.

First Global Group is presently undergoing a re-structuring process under the guidance of Mr. M.H.M. Faizer, who has been appointed as a Strategic Advisor. Mr. Faizer was the First CEO of Amana Investments.

In the meantime Mr. Sabri Abdul Cader who was the CEO of First Global has resigned and Mr. Faraz Hameed has joined First Global Investments as Deputy CEO.

LOLC expand its Islamic arm with more services

24th September 2009

LOLC through its subsidiary Lanka ORIX Finance Company Ltd. established a dedicated Islamic Business Unit LOLC AL-Falaah in late 2007 in an effort to ensure this area of financing is handled in accordance with Sharia’a laws, thereby guaranteeing consistency with Islamic principles and concepts at all times.

“LOLC Al-falaah” recently introduced the country’s first Mudaraba Savings account. The salient features of this savings account includes an electronically updated pass book which can be accessed through any one of the company’s branches, an industry first ATM card which is linked up to the “Maestro” network thereby enabling access internationally. All Islamic financing facilities are available through anyone of the company’s 35 branches and service centres located island wide and this Mudaraba Savings account is accessible from more than 350 Locations countrywide.

Lanka ORIX Finance Company Ltd. is registered under the Central Bank of Sri Lanka to offer Sharia’a Financing and since its launch in late 2007 for past three years they have been offering Ijara (Leasing), Murabaha (Trade Financing), Diminishing Musharaka (property/Project Financing).

LOLC Alfalaah is facilitated with its own infrastructure such as IT, Documentation and Financial Accounting which are based on Shari’ah principles. While the dedicated Islamic Business Unit is currently operating under the supervision and expert guidance of the Sharia’h Supervisory Board comprising of the eminent Islamic Scholars Shaik M. Fazil Farook and Shaik M.Murshld Mulafar and Shaik Mufti Jakhura.

The LOLC Group with their inherent spirit of innovation, professionalism and dynamism always caters to the needs of the different segments in the financial services market and focus on expanding its scope. Due to rapid product innovations and the strategically placed branch network the company has been able to gain a significant market share and is keen to propagate Islamic Financing around the country. In the future the unit is also considering moving into other areas of business such as Pawning and Micro financing. LOLC is also looking into the possibilities of taking this concept to that of the liberated areas in the North and East for which there is good potential to develop this concept.