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Thursday, 20 March 2014

Bahrain asked to focus on Islamic banking in Pakistan

KARACHI: Bahrain should look into unmatched business opportunities in Pakistan with a special focus on project-based financing and Islamic banking, said President FPCCI Zakaria Usman while speaking at a meeting of Bahrain-Pakistan Business Council on the eve of three-day official visit of Bahrain’s King Sheikh Hamad bin Isa bin Salman Al-Khalifa to Pakistan.

Bahrain’s Minister of Industries and Commerce Dr Hassan A Fakhro, Bahrain’s Minister of Transport Kamal Muhammad Ahmed, Chairman Bahrain Chamber of Commerce and Industry Khalid Almoayed, Federal Minister of Commerce Khurram Dastagir Khan, former President FPCCI Zubair Ahmed Malik VPs FPCCI Khurram Sayeed, Babar Khan Durrani, Sheikh Imtiaz and Adnan Adeel and large number of businessmen of both the countries were also present on the occasion.

Zakaria Usman said that Pakistan is the closest neighbour of Bahrain in region that has a vibrant economy, 413 financial institution, and facility of low cost of living but bilateral trade remained modest to $400 million which is tilted in favour of Manama.

Almost 400 Pakistani companies are working in Bahrain and the number is rising which prove that the size and economic structure of both the brotherly countries is different but they are sharing many similarities.

The FPCCI chief said that Pakistan is emerging from economic and political turmoil after more than a decade and are experiencing new economic beginning to move Pakistan forward which is a great opportunity for foreign investors.

Zakaria Usman said that Bahrain has central location in gulf with a highly diversified economy and that enhanced linkages will boost flow of investments. Pakistan can learn from Bahrain’s economic diversification and expertise in energy sector.

The business leader said that an early trade treaty between the two countries would benefit each other as Pakistani textiles should find place in US market due to Bahrain’s FTA with America and Manama can explore markets neighbouring Pakistan.

He also stressed that Pakistan is an ideal market for investments, especially in the light of GSP plus status which has been granted for a decade. He also emphasised that Pakistan offers best investment opportunities in the region while is has been introducing new concepts for investments.

Pakistan offer best investment policies as almost 700 foreign companies operating in and making profits in Pakistan, a heaven for investors and a country of four seasons with population of youth standing at 60 percent.

Many MoUs were signed on the occasion including one between FPCCI and Bahrain Chamber of Commerce.

(Daily Times / 20 March 2014)
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FDI likely to boost India’s Islamic finance market

Foreign direct investment is likely to boost India’s Islamic capital market in the coming years as participatory finance is gaining popularity in the country.

A Delhi-based Indian business group said it was seeking Islamic finance to establish a buffalo meat plant in Bihar at a total cost 265 million Indian rupees ($4.33 million).

“We hope the success of our project will encourage more entrepreneurs to carry out participatory ventures making use of interest-free funds available in India and the Middle East,” said Shahid Ahmad, director of ABZ Agro Foods.

Speaking to Arab News, Ahmad highlighted the growing prospects for Islamic finance in India.

“Such ventures will help mobilize funds of those who do not want to deal with interest and will contribute to boosting the country’s real economy,” he said.

Asked why he opted for Islamic finance despite loan offers from several commercial banks, he said: “It was primarily because of my religious faith that prevents me from dealing with interest-based finance.”

He emphasized that investors in the buffalo project would gain good profit, not less than 27 percent, much higher than interest received from bank deposits. “Shareholders in our project are considered our partners.”

Ahmad said the project would benefit a lot of people in Bihar, especially the poor.

“It will also boost related industries such as transportation, packaging and animal farming,” he added.

The government has offered to give a subsidy of Rs.53 million to support the project while developers are contributing Rs.52 million.

“We would like to mobilize the fund required for the project on a participatory basis through equity shares and foreign direct investment, which is permissible as per the Indian laws,” Ahmad said.

The group is seeking funds from potential Saudi and Indian private investors, offering two million equity shares worth Rs.160 million to start the project.

He thanked the Jeddah-based Indian Forum for Interest-Free Banking (IFIB) for taking the initiative to promote the project among potential investors in the Kingdom.

V.K. Abdul Aziz, secretary-general of IFIB, said existing Indian laws allow entrepreneurs to make use of the huge Islamic funds.

“All religions, including Hinduism, Christianity and Islam have prohibited interest, even if it is one percent,” he told Arab News.

He hoped that more businesses like ABZ Agro Foods would come forward to utilize untapped interest-free funds available from Muslim NRIs, and Gulf businessmen and businesswomen.
“We have got vast scope to mobilize funds from all over the Middle East to meet India’s financial requirements to carry out its development and expansion projects,” Aziz said.

“If this (buffalo) project is successfully implemented, it will enhance the reputation of Islamic finance and encourage more entrepreneurs to make use of this facility on a large scale,” the IFIB official said, adding that all Indians would benefit from this participatory scheme.

Mohammed Shakir Qureshi, another director of ABZ, said financial experts have emphasized the project’s feasibility and profitability.

Indian meat is very much in demand in world market. India accounts for 57 percent of the world’s buffalo population.

“Only two to three percent of buffalo meat is currently processed and the industry is growing at an annual rate of 25 percent,” he said. We’ll get cheaper raw material and will be able to supply quality meat,” he added.

(Arab News / 20 March 2014)
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