Category Archives: Islam and finance

‘Gulf States Funding Islamic Organisations in the Netherlands’

More than 30 Islamic organisations in the Netherlands have either received or requested financial assistance from several Gulf States, namely Kuwait and Saudi Arabia.

For years, the Dutch government has made sure this information never saw the light of day –  until now.


CBC: Muslim students struggle to pay tuition due to religious law

Under Sharia, Islamic religious law, charging interest, known as Riba, is forbidden.

For Muslim students facing the high cost of post-secondary education, abiding by that law can pose a serious obstacle.

Video at link.

If they don’t want to pay interest, let them go to university in a Muslim country.


Islamic banking set to boom in Canada

Expert says it would be a win-win, opening Canada to more Shariah-compliant capital investment

After emerging largely unscathed from the financial crisis that hammered North American and European financial institutions, Islamic banking has momentum.

Worth $1 trillion in assets, Islamic banking is being lauded by British Prime Minister David Cameron and supported by Canada’s Conservative government, major banks and credit unions, leading business schools and influential Muslims across the country.

Islamic banking — which bans interest payments, pure monetary speculation and investing in such things as alcohol, gambling, pornographic media and pork — is being sold as the next big thing in financing for Canada, which is home to just over a million Muslims…

…“I think many Muslims in Metro Vancouver are excited about the idea of Islamic banking. In general, I think it’s a good idea,” says Luay Kawasme, director of the Vancouver Muslim Community Centre…

…“By opening more to Islamic finance,” he says, “Canada will be able to attract significant amounts of Shariah capital into its energy and natural resources sectors — on a win-win basis.”

Hejazi notes the pressure for Islamic banking is also simply arising out of the country’s demographic religious shift. Muslims already account for seven per cent of the population of Metro Toronto and five per cent of those in Metro Vancouver.

The Muslim population of Canada, he says, is projected by 2030 to mushroom to more than 2.7 million.


Standards, low profit hamper Islamic banks

The Islamic banking industry is being hampered by low profits and “mediocre” customer satisfaction despite impressive growth, officials and financial executives say at a financial conference in Bahrain.

The sector, which provides banking services compliant with Islamic sharia law, has doubled in size over the past four years and is now worth more than $US2 trillion ($A2.16 trillion).

But a study by EY (formerly Ernst & Young) released at the World Islamic Banking Conference in Bahrain this week found that Islamic banks run at significantly lower profit margins than their conventional peers.

The study, conducted on Islamic banks in nine countries including Saudi Arabia, Malaysia and Kuwait, found that their return on equity was 19 per cent lower than traditional banks in the same markets.

This could cost shareholders billions of dollars in forgone profit, it said…

You mean Islamic finance is not going to replace capitalism after all?


Guardian: ‘Could Islamic finance save capitalism?’

Is there a place for ethics and morality in the global economy? Should we continue to rely on governments to tweak at the margins of financial regulation, or is there a credible argument that a root and branch reformation is required – a revolution in capitalism?

Anthropologist and co-founder of the Occupy Wall Street movement David Graeber believes – along with an increasing number of leading intellectuals – that the world’s reliance on our current banking system has had a catastrophic impact on society, leading to an increasing divide between rich and poor, an increase in contemporary versions of debt bondage, and perpetuating the idea that credit creation is a mark of human progress…

…Intellectuals such as Mufti Taqi Usmani, a renowned scholar of Islamic jurisprudence, contend that Islamic economic theory may have some answers to the thorny dilemma of balancing the free market with protection of the vulnerable.

Indeed, the Prophet Muhammad in his last sermon before he died emphasised human and property rights to his followers, leaving them to codify the ethical principles he had bequeathed through the word of God and the documented precedent of his own life. This codified law is known as sharia and is perhaps more misunderstood today than at any time in its history…

When Europe’s barbarous principalities once slumbered through their Dark Ages, the Islamic world experienced an age of scientific, literary and philosophical enlightenment, borrowing whatever was good from the cultures around them and building on it. Islamic scholars in medieval Baghdad and Cordoba developed rules and mechanisms to encourage entrepreneurship, leading to the dissemination of financial innovations along the Silk Route and into southern Europe. These were the roots of modern capitalism, but somehow along the way the protection of the weak became forgotten…

Harris Irfan is author of “Heaven’s Bankers: Inside the Hidden World of Islamic Finance” and managing director at EIIB-Rasmala, a boutique investment bank.


Australia: Melbourne man accused of funding Islamic State refused bail

A Melbourne man accused of funding terrorism has been refused bail after he allegedly told police he did not believe he had committed a crime and sent money to ‘protect his brothers and sisters’.

Hassan El Sabsabi, 23, is charged with sending $16,000 in 11 installments to an unnamed individual overseas to fund their travels to Syria and Turkey.

El Sabsabi was arrested at his Seabrook home in police raids in September, and had been under observation for eight months when AFP officers were tipped off by an international law enforcement agency that he was allegedly sending money to an American fighter in Syria.

Police are reported to have tracked El Sabsabi’s communication with the man through Skype and Facebook, but he maintains that he does not believe he did anything wrong…

Just another bro trying to help the Islamic cause! Isn’t diversity grand?


Canada’s financial intelligence agency gets ‘useful’ data after attacks

(Reuters) – Canada’s financial intelligence agency asked institutions to quickly report suspicious transactions in the wake of two deadly attacks this week and has received data “useful to our intelligence efforts,” a spokesman said on Friday.

The Financial Transactions and Reports Analysis Centre (FINTRAC) was set up in 2000 to combat money-laundering and ensures the compliance of 31,000 financial entities doing business in Canada.

It sent a message to all 31,000 on Wednesday – the day of the second fatal attack – stressing the need for quick reports.

Asked whether FINTRAC had noticed any suspicious transactions linked to the attacks this week, spokesman Darren Gibb said: “What we have received from businesses following our message has been useful to our intelligence efforts.”


Saudi’s National Commercial Bank pledges conversion to Islamic bank after pressure from scholars

Grand Mufti of Saudi Arabia, and head of the Council of Senior Religious Scholars

Oct 20 (Reuters) – Saudi Arabia’s biggest bank has responded to criticism of its operations from Islamic scholars by pledging to convert itself into a full-fledged Islamic bank within about five years.

The decision, made as the bank launches a $6 billion initial public offer of its shares, the largest-ever equity sale in the Arab world, shows how Saudi Arabia’s conservative brand of Islam can have a big impact on business decisions in the kingdom.

State-owned National Commercial Bank (NCB), which has about $116 billion of assets, currently has a mixed business — most of it conforms to Islamic principles such as bans on interest payments and pure monetary speculation, but some of it involves conventional banking. Some other banks in Saudi Arabia are also mixed.

Last week some members of Saudi Arabia’s highest religious body, the Council of Senior Scholars, said investing in NCB’s share offer was not permissible because too much of its business was non-Islamic.

“Religion comes above every thing,” Sheikh Abdullah al-Mutlaq, one of the members, told state television…

I wonder how they got away with the bank being partly un-Islamic this long?


Greenfield: ISIS Duplicates USSR’s Collectivization of Farmers

They might be different brands of evil, but ISIS and the USSR have the same idea when it comes to agriculture…

From Wikipedia:

Zakāt, “that which purifies”) is the practice of taxation and redistribution, including benefits paid to poor Muslims, imposed upon Muslims based on accumulated wealth. It is obligatory for all who are able to do so, and it is considered to be a personal responsibility for Muslims to ease economic hardship for other Muslims to eliminate inequality among followers of Islam. The practice is one of the Five Pillars of Islam, and it is the only pillar which enjoins Muslims to submit to Islamic statism.


Next up for a sharia-compliant government bond: Luxembourg


How long before this church in Luxembourg becomes a mosque? Assuming it is not one already of course.

Luxembourg this week hosted a series of meetings with bond investors in Europe, Asia and the Middle East, with a view to issuing what would be only the fourth sovereign Shariah-compliant bond from a non-Muslim country…

Sukuk bonds trade, clear, settle and are rated in a similar way to non-Shariah compliant bonds, but are structured to abide by Islamic law by avoiding making conventional interest payments. This means they are usually backed by assets or cash…

Earlier this month, Hong Kong issued a $1 billion five-year sukuk that bankers involved said was heavily oversubscribed despite only paying a 2% yield. The U.K. in June also issued a £200 million five-year sukuk. Bankers said that while the proceeds weren’t instrumental to U.K.’s funding position, the deal was symbolically important, and would likely contribute to the capital’s aim of becoming a hub for Islamic and Asian finance…

Like the U.K., Luxembourg—a small financially sound nation of just half a million people—is unlikely to need the funding, rather choosing the format as part of its quest to become a more globalized financial marketplace…