Islamic Banks To Adopt Standardised Master Agreements

KUALA LUMPUR -- The Association of Islamic Banking Institutions Malaysia (AIBIM) has adopted two standardised interbank master agreements for deposit-taking and placement transactions.

Its president, Datuk Zukri Samat, said the standardised agreements were Interbank Murabahah Master Agreement (IMMA) and Master Agency Agreement (MAA).

He said just like any other money market products, the success of commodity murabahah-based instruments would depend a lot on the existence of a standardised document as well as universally-acceptable structure and widely recognised by the market.

"Understanding this prerequisite, AIBIM, at the request of and driven by its members, has developed common and standardised documents, comprising the MAA and the IMMA, which can be used by Islamic banking institutions for their interbank transactions involving deposit-taking and placement," he said.

Zukri said this in his speech at the launch of the master agreements by Bank Negara Malaysia governor, Tan Sri Dr Zeti Akhtar Aziz, here today.

The MAA and IMMA are bilateral agreements between the deposit-placing entity (DPE) or the principal and the deposit-taking entity or the bank.

As an agent, the bank will receive instructions from the principal to buy commodities from suppliers.

He said the purchase by the DTE or the bank would be effected upon spot payment and immediate delivery by suppliers.

"Upon conclusion of the commodity purchase by the bank on behalf of the principal, the bank may subsequently offer to purchase the commodities from the principal on a deferred cash payment basis, at an agreed sale price that takes into consideration the initial purchase price and the profit amount," he said.

Zukri said the sale would then be effected upon acceptance of the offer by the principal.

"Eventually, the adoption of both IMMA and MAA should help set the stage for a critical mass of Commodity Murabahah-based financial transactions ahead of the anticipated launch in July 2009 of Bursa Malaysia's Commodity Murabahah House, an international spot commodity platform," he said.

CIMB Islamic Dali Equity Growth Fund awarde best Malaysian Fund by Failaka Advisors

KUALA LUMPUR, 14 APRIL 2009 - CIMB-Principal Asset Management Berhad (CIMB-Principal) Recently Won The Best Malaysian Equity Fund Award For The Outstanding Performance Of Its CIMB Islamic DALI Equity Growth Fund. The Award, Presented By Failaka Advisors At The 4th Annual Failaka Islamic Fund Awards, Recognises CIMB Islamic DALI Equity Growth Fund As The Best Malaysian Equity Fund (Three-Year) Based On Its Performance As At 31 December 2008.

Failaka Advisors is the recognised leader in Islamic fund research, offering institutions and private investors access to a wealth of information on Shariah-compliant investment funds. Established in 1996, Failaka was the first company to monitor the performance of Shariah-compliant funds worldwide. It has then expanded its products and services to include advisory services and an online database and guide for Shariah scholars.

Read more: CIMB Islamic Dali Equity Growth Fund awarde best Malaysian Fund by Failaka Advisors

Islamic finance slows as global crisis impacts hubs in Malaysia, Gulf

DUBAI: Islamic finance is slowing as the global financial crisis hits its hubs in Malaysia and the Gulf, but the sector now has a chance to move on to Western economies seeking to boost their financial centers. Regulatory differences still plague efforts to build cross-border Islamic banking, and harmonization among different schools of thought is one of the nascent industry's main obstacles as it looks to grow in European countries with large Muslim communities.

"There is a need for petrodollars in the West so more countries will be pandering to the rhetoric of Islamic finance to try to recycle petrodollars to their own financial capitals, be that London, Singapore or Kuala Lumpur," said Mahmoud al-Gamal, chair of Islamic Economics at Rice University.

In a sign that cultural barriers may be coming down, some experts see sovereign wealth funds injecting cash into global financial centers with the aim of advocating Islamic finance.

As the industry expands into non-Muslim or secular states, the need to educate others about the sector has become greater.

With much high-flying banking talent available after the collapse of the Western banking system, a shortage of staff with Islamic finance knowledge may no longer be a challenge.

Read more: Islamic finance slows as global crisis impacts hubs in Malaysia, Gulf

A stronger player

If there is one player that has the potential to shake the way Islamic finance is done in Malaysia, it could be HSBC. The bank’s Islamic finance operation gained a boost when it opened a separate Islamic subsidiary named HSBC Amanah Malaysia Berhad. The new bank, a wholly-owned subsidiary of HSBC Bank Malaysia Berhad, was incorporated in February 2008 and began operating on August 24.

HSBC Amanah Malaysia opened two standalone branches in November. With the opening of these additional touchpoints, customers of both HSBC Amanah Malaysia Berhad and HSBC Bank Malaysia can conduct their banking transactions at these new branches in addition to HSBC’s existing 40 branches nationwide and can enjoy use of the Internet banking and call centre.

HSBC has been operating conventional banking in the country for years and since 1994 has offered Islamic financial services as well. In late 2007, HSBC Bank became the first locally-incorporated foreign bank in Malaysia to be awarded a licence by Bank Negara Malaysia to set up an Islamic banking subsidiary.

Read more: A stronger player

Malaysia, London Islamic finance alliance

MALAYSIA and London can pave the way towards bridging Islamic financial markets between the East and the West, according to Bank Negara Malaysia's governor Tan Sri Dr Zeti Akhtar Aziz.

She said the global financial crisis had highlighted several structural weaknesses and imbalances in the international financial system.

"Whilst Islamic finance is not insulated from the effects of the current environment, the Syariah principles and values that underlies Islamic finance provides an important underlying foundation," Zeti said at the two-day Euromoney 8th Annual Islamic Finance Summit on "Islamic Finance and Global Financial Stability" which began yesterday in London.

Read more: Malaysia, London Islamic finance alliance

Foreign Islamic fund managers given Malaysia go-ahead

KUALA LUMPUR - Malaysia's market regulator on Thursday approved three new foreign fund managers to start Islamic operations in the country.

The Securities Commission gave its nod to Aberdeen Islamic Asset Management Sdn Bhd, BNP Paribas Islamic Asset Management Sdn Bhd and Nomura Islamic Asset Management Sdn Bhd, the agency said in a statement.

The companies are already active in the conventional asset management market in Malaysia, the commission said.

Islamic finance shuns products related to pornography, alcohol or tobacco and is based on Muslim law.