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Monday, 6 January 2014

Islamic Banking and Financial Services

With Islamic Banking gaining popularity in the modern financial sector, at least three books on this subject hit the stalls in India in 2013

 The first book ‘INTEREST-FREE BANKING by Nazir A Nazir and Khurshid A Butt was published by Department of Business and Financial studies, Kashmir University. The second book GLOBAL ECONOMIC CRISES and ISLAMIC PERSPECTIVE by B Syed FazalHuq published by The New College, Tamil Nadu, and the third ISLAMIC BANKING and FINANCE authored by Ismail and Rehman. 

 The first two books are the outcome of international conferences where a variety of papers, rich in content, were presented. The third book is the result of academic venture undertaken by the young author.

 The first book is spread over nineteen chapters and the second accommodates fifty seven chapters on different sub-themes duly supported by empirical evidences. The third one presents conceptual framework in ten comprehensive sections. 

 In totality these books put forward intellectual discourses on various themes and come up with workable solutions from Islamic economics, banking and finance perspective, to so many issues of contemporary relevance as detailed hereunder:

• Regulatory framework and institutional mechanism for Islamic finance, banking and insurance,
•Islamic micro-finance models, social responsibility and sustainable development,
•Legal and regulatory challenges for developing an interest free economy,
•Recent economic melt-down and solutions available in Islamic Finance.
• Entrepreneurship development and interest free banking in 21st century,
• Islamic perspective and responses for global economic crises,
• Role of Zakat in reducing the gap between haves and have-nots,
•Growth and distributive justice in the economic system of Islam,
•Industrial cluster development through Islamic finance perspective,
•Scope and challenges for Islamic banking for inclusive growth and social uplift,
•Prudential approach for investment in shariah compliant share market and Islamic indices ,
• Role of Islamic banking in framing an egalitarian society,
• Islamic fund- asset management- venture capital- insurance-housing finance, etc. 

 Islamic banking and finance primarily focuses on value addition through an effective and productive process to widen the gap between input and output. This system has zero tolerance for wastage of resources and the people associated put in dedicated efforts to their best capabilities in order to enrich the process. The value addition thus generated is mutually shared by all the stakeholders as agreed upon by them on fair basis.

 At present there is shortage of human resource in Islamic Banking and Finance to run such institutions. 

 No doubt some scholars have done commendable research work in this branch of knowledge for award of doctoral degrees and now are working in different international universities and Islamic banks. Institute of Objective Studies, New Delhi has been putting in sustained efforts to sensitize the general public across the country with regard to Islamic banking and finance and organizes seminars, workshops and conferences for the academics and financial experts. 
 Islamic economics-banking-financial services and Islamic accounting are now comprehensive courses of study and have gained an independent status of academic 

discipline. To develop human resource in this branch of knowledge is quite essential in the context of employability. An additional degree or Diploma must be obtained by all those who want to work in Islamic financial institutions across the globe. 

 In this context it may be said that Aligarh Muslim University offers Masters Programme in Islamic Economics. Post Graduate Diploma in Islamic Economics and Finance (PGDIEF) is offered by Al-Jamia-al-Islamia, Kerala. However, both these programmes are transacted through formal mode of education to make stay of learners on the campus mandatory. 

 All the three books offer a very interesting read as the text is well drafted in a lucid style. 

The editors, contributors and authors of these books deserve appreciation for their sincere and serious efforts for discussing the issues pertaining to humankind and attempts they made to analyse vital economic crises confronting the global economy. The books under review can prove of great academic utility to research scholars, banking practitioners, subject matter specialists, policy makers and business academics. 

 Based on the bibliography, webliography and references to the context forming an essential part of these books one interested in will be in a position to develop a good personal library on the subject.

(Kreater Kashmir / 05 Jan 2014)
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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)
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