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Thursday, 17 May 2012

Brunei: More graduates needed in local Islamic finance sector

BANDAR SERI BEGAWAN - Brunei needs to encourage more Syariah graduates to enter the finance sector if it wants to become a legitimate player in the Islamic finance industry, said an expert here yesterday.

Executive Director of Malaysia-based International Syariah Research Academy for Islamic Finance Dr Mohamad Akram Laldin said building human capacity is the key to developing Brunei's niche in the market.

"The challenges are integrating the Syariah knowledge and market knowledge. We need to have more Syariah graduates to go into the area and understand the market."

"We need people who are able to run the business, who are capable, and can plan. I believe with the establishment of Centre for Islamic Banking, Finance and Management (CIBFM), Brunei has taken a very good step," Dr Akram said on the sidelines of yesterday's International Conference on Islamic Finance held in the capital.

CIBFM was officially launched earlier this year and offers a range of short courses for banking and finance staff to acquaint them the tenets of Islamic finance.

"We have started seeing more and more people who are trained in Islamic finance coming up. This is a very good sign... The majority (of the) population of Brunei are Muslims, so that is another encouraging factor to improve manpower," he said.

However, working in the English language medium has proven difficult for Syariah graduates and remains a barrier to them entering the finance sector, said Dr Akram.

Accustomed to using Malay and Arabic in their professional lives, graduates will need to become proficient in English as it remains the language medium of finance globally.

"Syariah graduates sometimes feel very uncomfortable using English. I believe we can slowly overcome this."

The need for staff well-versed in Islamic finance becomes more pressing with non-Islamic banks entering the fray.

Dr Akram, who also acts as a consultant for HSBC Brunei, said the bank is also entering the "Islamic window" by drawing up Syariah-compliant financial products.
"In most jurisdictions this is allowed, only in some places such as Qatar they do not allow (conventional banks to offer Islamic finance products). They will have what they call an Islamic window."

Southeast Asia can capitalise on the growing Islamic finance sector, projected to be valued at US$2 trillion by 2017, he added.

"In Southeast Asia, each and every country has their own strength... From what I can see, in Brunei, maybe wealth management, in Malaysia, we have sukuk, in Singapore corporate and investment banking, Indonesia, because of the huge population base retail banking."

(Asia One Business / 16 May 2012)

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Islamic banks urged to be 'entrepreneur-friendly'

BANDAR SERI BEGAWAN - Islamic banks should be more "entrepreneur-friendly", said His Royal Highness Prince Hj Al-Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister's Office, by offering a variety of Syariah-compliant financing methods that will help Muslim businesses become successful.

"Such efforts support His Majesty's wishes to enhance the 'Ease of Doing Business' in the country," he said at the International Conference on Islamic Finance held at the Rizqun International Hotel yesterday.

In a sabda, the crown prince said while the industry must fulfil the tenets of Syariah law, it must still be able to compete with the conventional finance industry to offer customers benefits, particularly those that require financing facilities.

He also mooted the creation of a regulatory system for the Islamic finance industry with comprehensive legislation and guidelines to support it.

"Regulations and legislation in the conventional financial system still need to be improved and upgraded," he said.

"At the same time, we need to create a regulatory system with comprehensive rules and legislation (within the Islamic finance industry)."

HRH lauded Universiti Islam Sultan Sharif Ali (UNISSA) for organising the "timely" event, encouraging scholars and experts from the region to come up with sound solutions to further develop the Islamic finance system.

Quoting statistics, the crown prince noted that the industry is undergoing rapid growth with assets valued at US$1.1 trillion - at an annual growth rate of 15 to 20 per cent - and is predicted to reach US$2 trillion in three to five years.

With public confidence in conventional finance shaken after the global economic crisis, and many countries still in a fragile financial state, Islamic finance offers an alternative to investors, he said.
The three-day conference will host scholars and experts from Brunei, Malaysia, Singapore, Indonesia and Kenya and is jointly organised by UNISSA and the International Shari'ah Research Academy for Islamic Finance, Malaysia.

(Asia One Business / 16 May 2012)

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Islamic financial system can boost economy

Karachi—The fast-growing Islamic finance industry (IFI) holds the potential to contain unemployment and boost economy if an efficient and effective monitoring mechanism is in place.

Dr Ali Hasan Hamdani, an economist associated with a local private sector university in a statement received here on Tuesday said IFI industry needed creativity and guidance to ensure Shariah compatibility and integrity of the products offered in the country.

He said around five per cent share held by IFI in Pakistan indicated that masses need to know difference between Islamic and conventional products.

The economist recommended that all the details of the Islamic products, internal compliance, methodology and conflict of opinions should be openly discussed and masses be sensitized about it.

He also suggested need for a good risk management system that is important to protect the interests of investors and institutions.

“The industry must be open to criticism and listen to the clients to win approval,” he said.

Dr. Hamdani said there was an equally urgent need to educate masses as well as investors to boost Islamic finance.

“Islamic banks should not compete or compare themselves with conventional banks,” he suggested and cautioned that financial institutions must not offer services through sub-contractors who lack knowledge of Islamic finance.

A properly developed Islamic financial system can reduce miseries of humanity by bailing out ailing economies in the world claimed the economist.

(Pakistan Observer / 16 May 2012)

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