Friday, March 09, 2007

EPF will not manage RHB, Islamic finance in India

EPF will not manage RHB

The Malaysian state run pension fund, Employers Provident Fund (EPF), announced that it will not manage Rashid Hussain Bhd, in which it agreed to purchase a 32.8% stake from Utama Banking Group. The CEO of EPF, Datuk Azlan Zainol, announced that the EPF wants to leave the management of the company "to professional directors and professional management to oversee the running of the bank". This statement, along with the enthusiastic response by Kuwait Finance House suggest that Kuwait Finance House may be involved in managing the bank and the EPF may support KFH's desire to turn RHB into a mega Islamic bank.

Another article in the Business Times (Malaysia) described the problem EPF faces in finding enough assets to purchase with the funds it manages. It is prohibitted from investing outside Malaysia and the supply of government bonds has fallen as the government tries to balance the budget.

Indian Islamic equity

There continues to be a lot of debate about how to determine acceptable financial products for Muslims in India where there are only two Islamic financial services companies in the company and no Islamic banks.

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