7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012 http://slidepdf.com/reader/full/evolution-of-the-islamic-financial-system-in-the-international-context-by 1/47 Evolution of the Islamic Financial System in the International Context RESEARCH & PRESENTED BY YOUSUF IBNUL HASAN PROGRAM CONSULTANT & FACULTY ISLAMIC BANKING & APPLIED FINANCE IQRA UNIVERSITY PAKISTAN
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Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
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7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
accused movement of Islamic finance in the beginning of its birth as an agenda of IslamicFundamentalists, uniting a funding sources to be usefor international terrorism.
First Social Bank formed in 1960 was linked to themovement which was gaining a momentum against
the then Egyptian government during the period of 1958-65 which was also the growing period of Islamic
Financial System.
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Political, Social, Traditional, Commercial,Financial, Business & Economic affairs forIslamic & Non Islamic communities withoutDiscrimination, with Freedom of Choice, Act
and Speech but within defined limits.
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Islamic economics is independent with a separateidentity, having effective economic policies to benefits
humanity with Social Justice
It cover individual interests at Private, Public, Material as
Spiritual.
It identify human lifestyle for Earning, Expenditure,Business, Relationship, Right and Duties Responsibility, inLegal frame.
It emphasis in Unity, Faith Discipline, Moral & Ethical Values, Equality, Love, Transparencies, Cooperation &Sharing in all the Economics, Business, Social and
Commercial affairs in the best interest of humanity. *
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Any earning, income, profit or benefits being earned, taken or receivedthrough wrong means, bad intentions, shady practices or wicked
participation. Such earning, income, profit or benefits are classified as
RIBA.
Riba is immoral, unethical, unjustified commercial, economical,financial, political, social, cultural & traditional practice and activity togain benefit at individual, collective or institutional level.
The above receivables and acts leads to crimes, develop cruelty &exploitation, create self- importance & monopoly, discrimination,inflation & convert pluralistic community into singular society.
*
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Fix rate on principle amount taken in excess without risk,efforts, activity, in exploitation, cruelty, using force and
non transparency in monetary transaction, confirmingguaranteed return is an Interest and a price of money whereas money is only bridge between man andcommodity or services
*
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Principle Finance deducting from the Proceeds of Sales & Services, realizing Gross Profit which then bededucted by Cost of Transaction, declaring the NetProfit which is distributed in Ratio according toinvestment Ratio. Appraisal, Precaution, Trust,Confidence, Experience, Knowledge, Purpose, Will &
Sprit are business ethics that act in realizing profit onthe transaction.
Riba- Interest are the Limitations of financing
Where as Profit is an achievement.
*
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Finance is an intermediary source of money in volume in exchange of the values for ability,
commodity, equity & property in production,manufacturing & trading. It makes the volume of money to support for specific purpose withinspecific period, in between person to person, personto institution or institution with group or institutionon an understanding to share the results of transaction in profit and loss. *
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
In Mid of 19th Century Islamic Financial declared a parallelmonetary system to Conventional System of world
Egypt is the pioneer of Islamic Finance and has the highest volume of contribution in the development of IslamicFinance recognized by the 21st Century s bankers, Jurists
Economists, Bankers and all those who are link to Money Business.
*
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Finance from Egypt penetrated in the other regionalcountries and number of personalities enter as researchers,
scholars, Advocator, professors, jurists and economist in theIslamic Financial Movement .
Egypt now has 14 Islamic banking licenses and several
Islamic finance windows, with approximately 120 BillionEgyptian Pounds of assets in Egypt's Islamic bankingindustry out of Total assets of the entire banking sector areabout 1.3 Trillion Pounds, according to Egypt Central Bank.*
Egypt Influence on financial system
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
In 1977 Pakistan Military Dictator General Zia-ul-Haqtook the initiative in converting Pakistan economic systeminto ZERO Rate of Interest and ask Counsel of IslamicIdeology to give recommendations.
The Counsel drafted a remarkable report on Islamic
Economic and Finance with the contribution of over 400leading Pakistan and international reputed personalities asin almost three years.
*
Pakistan participation
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Finance Committee of OIC declared the report as one of themost authentic documents covering Islamic Economics,
Finance, Banking, Takaful and Jurisprudence .
In 1984 Pakistan moved Modaraba Ordinance & declaredModaraba Financing as NBFI ( Non Banking Financial Institution) with a vision of SME value in economy.
SME penetrated in the international monetary market assolution for economic crises due to Riba Free & Transparent way for Ability support through Capital.
*
Birth of Modaraba in 19th Century
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Ø International Institute of Islamic Banking & IslamicEconomics (IIIB&E) was established in Cairo, Egypt in the mid of seventy in 19th Century for Human Resource Development
Ø International Association of Islamic Banking (IAIB) withHeadquarter in Heliopolis Cairo was formed and initial Membership wastaken by Egypt, Pakistan, Sudan, Turkey, United Kingdom, UAE, Saudi Arabia, Malaysia, Iran, Morocco, Algeria, Senegal, Niger and then with
passage of time Kuwait, Bahrain, Qatar, Oman and Indonesia enter intothe club.
Ø All the credit goes to Dr. Ahmed Al Naggar & his team
*
Institutionalize Support
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
In 1974 on IAIB proposal Islamic Development Bank (IDB) was established to operate on the Shariah principles for
intergovernmental activities in providing funds fordevelopment projects running into member countries withHeadquarter in Saudi Arabia
Dubai Islamic Bank established in 1974 was the second Big
achievement after IDB.The beginning of 80s two groups entered in Islamic Financenamely DMI Group and Al-Baraka Group by registering atBahamas and operation from Switzerland . *
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
TunisiaTunisia's government aims to develop Islamic banking.Central Bank move a plans to allow the banks to operate
"Islamic windows" to segregate money fromconventional operations.
Tunisia adopted Islamic Finance in late 70s by establishing 2 offshore Banking & 1 Financial House
Bank Zitouna establish in 2010 for domestic market with active financing in under Real Estate in Musharka,Equipments on Ijarah & Morabaha for Trade Finance..
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
In 1990 IDB, Central Bank of Morocco and Bank Al-Maghrib hosted a conference on Islamic finance which was
the initiative to bring change in the banking sector.In 2007 Morocco began introducing Islamic bankingproducts in through Moroccan Central Bank by allowingcertain types of Islamic financial products in response togrowing consumer demand.
To mobilize Islamic financial products a draft bill with wasplace before parliament for approval. It will add a chapter tothe Morocco's Banking Law, providing a set of regulationson all Islamic finance products.
*
Morocco …
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Equity Participation to structure CapitalBase an opportunity to common saver
Sukuk
From 2000 to 2011
In 2009 IFC listed first long-term Sukuk an rank first non-Islamic financial organization to issue a Sukuk in the Gulf Cooperation Council for term financing.
German State of Saxony-Anhalt issued Sukuk €100 mil
Islamic Development Bank issued Sukuk $400 mil World Bank issued Sukuk $200 mil
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Islamic Finance In ProjectSadaf, a joint venture between Shell Oil & Saudi ArabianBasic Industries Corporation (SABIC), US $13 in 1995
Rabigh Refinery Petrochemicals Saudi Arabia US$10 Billion
Commercial banks contributed over US $ 28 Bil throughIslamic Financial products in last decade and expected to bethree time more ending 2015.
Morocco has been the largest beneficiary of trade financefacilities from the IDB at ID1.67 billion (US$2.38 billion),followed by Algeria with ID1.49 billion (US$2.13 billion),and Egypt with ID1.38 billion (US$1.97 billion).
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012
Issuers, public & private, may consider tappingthe Islamic capital markets as Islamic finance isasset-based industry and business can fit withthe structures developed in Islamic finance.
High-liquidity of Islamic banks & Islamicinvestment funds, issuers who tap this marketmay be able to obtain relatively favorable pricingrelative to the conventional market
7/29/2019 Evolution of the Islamic Financial System in the International Context - By Yousuf Ibnul Hasan - iCompetences IFC2012