Financial Regulatory Forum

COLUMN-Qatar bank ban bad for Islamic finance

By Keith Mullin, Editor at Large, International Financing Review; the views expressed are his own.

LONDON, Feb 18 (Reuters) – Qatar’s decision to ban conventional banks from offering Islamic banking services with immediate effect and to wind down their Islamic windows by the end of the year is an absurd development.

It is disgracefully anti-competitive, counter-productive and there is every likelihood that the government will come to regret it.

The central bank’s reasons for imposing the ban were put down to a host of supervisory and monetary policy issues that were poorly explained and ultimately made little sense. It said the Qatari financial system has “well established Islamic banks… that fulfil local demand on Islamic products”. This is laughable since the country’s top three Islamic lenders – Qatar National Bank, Commercial Bank of Qatar and Doha Bank – are all conventional banks. (more…)

ANALYSIS-Lack of standardisation hobbles Islamic finance

By Shaheen Pasha and Liau Y-Sing

DUBAI/KUALA LUMPUR, May 10 (Reuters) – Wrangling among scholars and wiggle room in interpretation of Sharia principles threaten to derail any attempt to arrive at global standards in Islamic finance, holding back the $1-trillion industry.

Analysts say that unified rules that could have fuelled growth will be difficult to establish given the differences not just between regulators but also between practitioners.

Many global Islamic finance institutions currently look towards guidelines set by Accounting and Auditing Organization for Islamic Financial Insitutions (AAOIFI) but there is no way to force banks or the sharia boards to comply in all cases.

Indonesia passes law on VAT, luxury sales tax

Indonesia's finance minister, Sri Mulyani Indrawati, arrives for the G20 Finance Ministers meeting at the Treasury, in central London September 5, 2009, REUTERS/Dominic Lipinski/Pool      By Dicky Kristanto and Andreas Ismar
JAKARTA, Sept 16 (Reuters) – Indonesia’s parliament on Wednesday passed a revised law on value added tax (VAT) and sales tax on luxury goods, which could boost corporate mergers and spur the country’s fledging Islamic markets.

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Top scholar sanctions Islamic tawarruq structure

A man stands, identifying he has completed an exam to become a religious scholar, at the Jamia Binoria Al-Alamia Seminary Islamic Study School in Karachi July 18, 2009. Over 2,000 men took the annual exams at the madrasa, where 6,000 boys and girls are educated, fed and housed. REUTERS/Athar Hussain (PAKISTAN RELIGION)   By Liau Y-Sing
   KUALA LUMPUR, Aug 11 (Reuters) – Tawarruq must meet the standards of industry body AAOIFI and cannot be a standalone funding tool, a top scholar said, outlining conditions for the use of a structure that has split the sharia banking sector.
(more…)

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