The European Islamic Investment Bank (EIIB) will offer wakala, a product used in the Middle East, but not yet in Europe, is similar to a money market account where deposits are used in investments and a commission and a share of profits are paid to depositors. Using wakala is one way in which the use of murabaha for financing can be reduced from current levels (estimated at 80 percent of all Islamic financial transactions) and the use of equity instruments encouraged.
Central Bank of Bahrain governor calls for transparency in Islamic finance
In another speech, this one give at the Euromoney Islamic Finance Summit in London, the Central Bank of Bahrain governor Rasheed Al Maraj warned of dire consequences for the future of the Islamic financial industry are not created. Mr. Al Maraj described how:
"Investors must clearly understand the nature of the investment they are entering into, including in particular the potential downside risks to their capital. The allocation of costs and the calculation of profits must also be transparent. Furthermore, these must reflect in a fair manner the relative contributions of shareholders and customers. If these areas are not successfully addressed, then certain parts of the industry risk damage to their credibility, which in turn may discredit the industry as a whole."
This movement to increased transparency, with the goal set higher than minimum regulatory standards will do a great deal to safeguard the industry's reputation and increase its credibility as an ethical industry.
Three Middle Eastern banks eye Indonesian Islamic banking market
Three banks, Al Baraka Islamic Bank, Qatar Islamic Bank and Al Salam Bank, plan to expand their operations into Indonesia. This follows moves by Kuwait Finance House to expand into Asian markets through Malaysia.
Dubai Growth Fund (Enmaa') Class A announced
Asset management and investment banking firm 3i Capital Groupannounced the launch of a $100,000,000 Shari'ah-compliant fund, part of an AED1 billion ($272 million) Dubai Growth Fund. The funds will be invested in high growth equities and pre-IPO firms and will follow the guidelines of the Dow Jones Islamic Market Index
Other News
A description of the offering and listing of Dubai Holdings' $2.46 billion sukuk.
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