azerbaijan: emerging market islamic banking and finance
azerbaijan: emerging market islamic banking and finance
azerbaijan: emerging market islamic banking and finance
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NEWS<br />
NEWHORIZON October–December 2008<br />
Express Bank extends<br />
Islamic card across Russia<br />
Prominent Indians in<br />
support of Islamic <strong>banking</strong><br />
Express Bank, a regional<br />
Russian bank, which has been<br />
issuing Islamic debit cards in<br />
the Russian republic of<br />
Dagestan since July, intends to<br />
launch the product across the<br />
whole country, by making it<br />
possible for customers to apply<br />
for the card online. The roll<br />
out is a response to the<br />
popularity of the card in<br />
Dagestan, a predominantly<br />
Muslim area. The terms of the<br />
card have been designed in<br />
collaboration with the<br />
Spiritual Council of Muslims<br />
in Dagestan. According to a<br />
spokesman from the bank, the<br />
product has also proved<br />
popular with many Christians<br />
<strong>and</strong> Jews in Dagestan.<br />
To comply with Shari’ah <strong>and</strong><br />
at the same time with the<br />
Russian <strong>banking</strong> legislation,<br />
Kremlin of Kazan, Russia<br />
the accrued interest will not<br />
be paid into the cardholder’s<br />
account, but instead will be<br />
donated to charitable causes,<br />
primarily child healthcare,<br />
purchase of hospital<br />
equipment <strong>and</strong> modern<br />
diagnostic <strong>and</strong> life support<br />
apparatus for maternity wards.<br />
This will be the only card of<br />
its type on the <strong>market</strong> in<br />
Russia, though it will not be<br />
the first foray by a Russian<br />
bank into Shari’ah-compliant<br />
<strong>finance</strong>. Badr-Forte Bank,<br />
the only Islamic bank to have<br />
been established in Russia,<br />
offered a similar interest-free<br />
debit card after opening in<br />
1991. However, Badr-Forte<br />
had its license revoked in<br />
2006, with many Russians<br />
considering the decision<br />
controversial.<br />
Amar Singh, a member of<br />
parliament <strong>and</strong> general<br />
secretary of the Samajwadi<br />
Party in India, is to meet the<br />
Indian government to<br />
encourage the growth of<br />
Islamic <strong>banking</strong>. Singh said he<br />
will press Indian Prime<br />
Minister, Dr Manmohan<br />
Singh, face to face on the issue,<br />
while attending a gathering of<br />
economists <strong>and</strong> intellectuals at<br />
the India Islamic Cultural<br />
Centre in New Delhi. Abdur<br />
Raqueeb, director of the<br />
Centre, also strongly<br />
supported Islamic <strong>finance</strong>,<br />
saying that opening the door<br />
to the industry would<br />
immediately unleash trillions<br />
of dollars in foreign direct<br />
investment.<br />
Raqueeb went on to say that<br />
an Islamic <strong>banking</strong> system has<br />
already been introduced in<br />
many nearby countries,<br />
including Singapore, Malaysia<br />
<strong>and</strong> Japan, <strong>and</strong> that investors in<br />
the Gulf region were less keen<br />
than previously to invest in the<br />
West. India, Raqueeb believes,<br />
should be an attractive target<br />
given the level of economic<br />
growth in the country. Raqueeb<br />
stated that, since Islamic <strong>finance</strong><br />
is based on equity <strong>and</strong> justice, it<br />
should be an antidote to the US<br />
sub-prime mortgage crisis, <strong>and</strong><br />
that it should decrease<br />
inequalities in the country. A<br />
report by Raghuram Rajan,<br />
former chief economist of the<br />
IMF (International Monetary<br />
Fund) will also be submitted to<br />
the government, calling for the<br />
encouragement of Islamic<br />
<strong>finance</strong> in response to the<br />
financial exclusion of India’s<br />
Muslims. There are<br />
approximately 150 million<br />
Muslims in India, equal to<br />
about 13 per cent of the<br />
country’s population.<br />
Korea joins IFSB<br />
© Anver Dreamstime.com<br />
The Islamic Financial Services<br />
Board (IFSB) in Malaysia has<br />
admitted South Korea’s<br />
Financial Services Commission<br />
<strong>and</strong> Financial Supervisory<br />
Service to its membership, along<br />
with ten other organisations.<br />
New members include Kuwait<br />
International Bank (Kuwait),<br />
Sudanese French Bank (Sudan),<br />
Deutsche Bank AG (UAE),<br />
Gatehouse Bank plc (UK),<br />
Mitsubishi UFJ Securities Co<br />
Ltd (Japan) <strong>and</strong> Unicorn<br />
International Islamic Bank<br />
(Malaysia).<br />
This takes the total of IFSB<br />
membership up to 34 jurisdictions<br />
<strong>and</strong> 175 organisations<br />
around the world. IFSB,<br />
officially inaugurated in 2002,<br />
serves as an international<br />
st<strong>and</strong>ard-setting body of<br />
regulatory <strong>and</strong> supervisory<br />
agencies for the Islamic financial<br />
industry.<br />
The number of member<br />
organisations has continued to<br />
rise steadily; it was 150 at the<br />
start of the year (NewHorizon<br />
January–March 2008).<br />
6 IIBI www.newhorizon-<strong>islamic</strong><strong>banking</strong>.com