By Eileen Ambrose | eileen.ambrose@baltsun.com
August 25, 2009
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As students head back to college, marketers are promoting prepaid cards as a way for young adults to learn financial responsibility and for Mom and Dad to monitor a child's spending.
But a prepaid card can be an expensive teaching tool, and not necessarily the best one.
Basically, parents buy a card, load it up with money and give it to a child to use like a credit card on campus. It's up to students to track their spending. Once the money runs out, parents can reload the card with more dollars.
A recent report by Consumers Union, however, says that prepaid cards can carry a wide range of fees, and some of them hefty and not always easy to find. Fees vary from card to card, of course. But here is some of what Consumers Union found:
•Some cards don't charge an activation fee; others do and charge as much as $29.95. Just to obtain a prepaid card could cost you at least $30 for activation and initial load fees.
•Many cards charge monthly fees that can be as high as $10. Some assess annual fees of $29.95 to $99.95.
•Most cards charge a $2 fee to withdraw cash from an ATM, not counting a fee from the bank to use its ATM.
•Cards often offer free ways, such as e-mail or text message, to check the card balance. Check it at an ATM, and you may pay 50 cents to $1.
•Overdrafts are possible if purchases aren't posted immediately and you spend more than the card holds. You can get hit with a $14.95 to $29 "shortage fee" if that happens.
•Don't use the card for a couple months or more and you might owe $1.50 to $5.95 a month for inactivity.
Consumers Union adds that some prepaid card issuers voluntarily offer consumer protections in case a card is lost or stolen, but protections aren't guaranteed, as they are with debit cards.
"Until the protections are the same with the debit card, we advise consumers to stay away from this if at all possible," says Michelle June, a Consumers Union staff attorney. "We recommend that parents obtain a good old-fashioned bank account" for their college student.
The Network Branded Prepaid Card Association counters that Consumers Union doesn't give the full picture, and should have compared prepaid cards to alternatives, such as check cashing and money orders, that are more costly to use. And the trade group says if not for prepaid cards, millions of consumers wouldn't have access to the convenience of plastic.
But college students don't belong in that group. They should have a checking account with a debit card tied to it. And when they learn to handle that responsibly over time, they can graduate to a credit card.
Janet Bodnar, author of "Raising Money Smart Kids," says credit, debit and prepaid cards all have their drawbacks, but a debit card is the best way to teach financial responsibility to young adults. Sure, college students might get hit with a $30 overdraft fee if they overspend using a debit card, but that's a lesson they need to learn and the earlier the better, she says.
Prepaid cards not only have a lot of fees, Bodnar says, but they send a message to students that if they overspend, parents will bail them out by loading more dollars onto the card.
"You are not really teaching them to manage their own money," she says.
Copyright © 2009, The Baltimore Sun
Friday, August 28, 2009
Tuesday, August 25, 2009
Bersama YaPEIM: Perubahan ekonomi ummah perlu dibuat secara berterusan
Bersama YaPEIM: Perubahan ekonomi ummah perlu dibuat secara berterusan
Oleh Dr Abd Malek Awang Kechil
Berita Harian ,Rabu, 26 Ogos 2009
DUNIA Islam memerlukan perubahan (transformasi). Ikatan emosional umat Islam yang mendalam terhadap Islam memiliki potensi yang besar bagi mencetuskan perubahan dan pembangunan sosioekonomi. Dalam konteks Malaysia, sejak negara ini mencapai kemerdekaan, tahap pencapaian ekonomi termasuk sosioekonomi ummah mengalami perubahan ketara. Walaupun pada awal pasca kemerdekaan, perkembangannya agak perlahan, pengalaman yang dilalui terus mendewasakan kepemimpinan dan cendekiawan dari kalangan umat ini dalam menganalisis, mengolah dan menemukan strategi dianggap segar sebagai langkah memperkasa ekonomi ummah pada dekad seterusnya.
Di Malaysia, pelbagai dasar (Dasar Ekonomi Baru), Wawasan (Wawasan 2020), Konsep (Konsep 1 Malaysia), pelan dan strategi diperkenal dan dilaksanakan kerajaan bagi memacu ekonomi negara dan ummah. Di samping itu, strategi memperkasakan ekonomi ummah juga disokong kuat dengan kesepakatan idea yang dicapai melalui siri pertemuan berasaskan wacana intelektual dan perhimpunan solidariti umat khususnya melalui penganjuran seminar, konvensyen pendidikan Islam dan penganjuran siri Kongres Ekonomi Islam dan Kongres Ekonomi Bumiputera yang dijayakan dari semasa ke semasa. Semua dasar dan kesepakatan idea ini mempamerkan keprihatinan dan bermotif ke arah memperkasakan ekonomi ummah.
Perlembagaan negara yang meletakkan Islam sebagai agama rasmi dan memberi perlindungan dan memberi hak keistimewaan kepada orang Melayu (Islam) adalah sumber kekuatan ummah berteraskan undang-undang. Berasaskan rujukan undang-undang dan kebijaksanaan pemimpin dalam menghadapi kemelut yang melanda umat, Dasar Ekonomi yang menggariskan strategi utama bagi menangani kemiskinan dan penyusunan semula masyarakat diperkenalkan kerajaan.
Di samping itu komitmen tinggi kerajaan terhadap usaha mendaulatkan syiar Islam diteruskan dengan memperkenalkan pelbagai dasar berhubung Islam (Dasar Penerapan Nilai Islam). Dasar berhu-bung ekonomi dan Islam ini dilihat mempunyai impak yang tersendiri dalam usaha memperkasa ekonomi ummah.
Hakikatnya, walaupun pelbagai dasar yang mempunyai motif yang murni telah diperkenalkan dan dilaksanakan, pencapaian yang diperlukan oleh dan dari umat ini perlu dilihat sebagai aspek yang berbeza. Atas dasar itu transformasi (perubahan) yang diperlukan oleh dan dari umat ini dilihat sebagai suatu proses pembaikan yang perlu berlaku secara berterusan. Perubahan ekonomi ummah kini dilihat sebagai persoalan yang semakin kritikal dalam ekonomi negara yang berasaskan masyarakat majmuk (penguasaan ekonomi negara berada di luar kawalan umat), mahupun dalam suasana dunia yang dilanda krisis kewangan yang parah kini.
Menggerak Potensi Memperkasa Ekonomi Ummah yang menjadi tema Kongres Ekonomi Islam Ketiga, dilihat sebagai suatu tema yang bukan saja relevan untuk usaha memperkasa ekonomi ummah di Malaysia, malah juga untuk rantau ini dan dunia Islam amnya. Atas dasar itu, kesepakatan yang tercapai pada kongres berkenaan dilihat amat relevan untuk dicadangkan sebagai asas kesepakatan baru di kalangan pemimpin ummah di rantau ini (negara Mabims khasnya), dalam kerangka melakukan transformasi ekonomi ummah pada masa depan.
Dari sudut bahasa transformasi boleh membawa maksud perubahan. Bagaimanapun terdapat beberapa istilah yang agak dekat dengan istilah transformasi, seperti istilah reformasi dan islah.
Bagaimanapun, bagi menghuraikan tajuk yang dikemukakan ini, istilah perubahan akan digunakan berpandukan kepada maksud ghaiyyara (ubah) seperti yang terungkap dalam Surah Ar Ra'd Ayat ke 11 yang bermaksud "Sesungguhnya Allah tidak akan mengubah keadaan suatu kaum sehingga mereka mengubah keadaan diri mereka sendiri".
Ayat ke 11 surah Ar Ra'd dengan maksud seperti yang dinyatakan diatas, mengikut Tafsir Al-Azhar, Prof Dr Hamka menyimpulkan bahawa "inilah ayat yang terkenal tentang kekuatan dan akal budi yang dianugerahkan Allah kepada manusia sehingga manusia itu dapat bertindak sendiri dan mengendalikan diri di bawah naungan Allah. Dia berkuasa atas dirinya dalam batas yang ditentukan oleh Allah. Sebab itu manusia itu pun wajiblah berusaha sendiri pula menentukan garis hidupnya".
Sementara Tafsir Fi Zilal lil Quran pula merumuskan bahawa ayat tersebut ini sebagai "itulah suatu hakikat yang meletakkan tanggungjawab yang berat ke atas manusia".
Berasaskan kepada rujukan yang dikemukakan ini, transformasi dalam konteks perbincangan ini lebih merujuk kepada perubahan seperti yang digariskan dalam al-Quran ayat ke 11, surah Ar Ra'd dan mendekati maksud islah seperti yang didefinisi dalam Kamus Dewan, di mana perubahan yang dimaksudkan tidak sampai menyentuh persoalan dasar seperti persoalan akidah yang menjadi pegangan umat selama ini dan tidak dapat menerima sepenuh maksud transformation seperti yang didefinisikan dalam Oxford Advanced Learner's Dictionary yang membawa maksud a complete change. (bersambung)
Penulis ialah Ketua Pengarah Yayasan Pembangunan Ekonomi Islam Malaysia (YaPEIM) yang menyampaikan ucapan bertajuk Transformasi Ekonomi Ummah: Pengalaman dan Peranan Semasa Negara (Malaysia, Brunei, Indonesia dan Singapura) Mabins (Perspektif Malaysia) sempena Muzakarah Ulama Mabins di Kuala Lumpur, baru-baru ini.
Oleh Dr Abd Malek Awang Kechil
Berita Harian ,Rabu, 26 Ogos 2009
DUNIA Islam memerlukan perubahan (transformasi). Ikatan emosional umat Islam yang mendalam terhadap Islam memiliki potensi yang besar bagi mencetuskan perubahan dan pembangunan sosioekonomi. Dalam konteks Malaysia, sejak negara ini mencapai kemerdekaan, tahap pencapaian ekonomi termasuk sosioekonomi ummah mengalami perubahan ketara. Walaupun pada awal pasca kemerdekaan, perkembangannya agak perlahan, pengalaman yang dilalui terus mendewasakan kepemimpinan dan cendekiawan dari kalangan umat ini dalam menganalisis, mengolah dan menemukan strategi dianggap segar sebagai langkah memperkasa ekonomi ummah pada dekad seterusnya.
Di Malaysia, pelbagai dasar (Dasar Ekonomi Baru), Wawasan (Wawasan 2020), Konsep (Konsep 1 Malaysia), pelan dan strategi diperkenal dan dilaksanakan kerajaan bagi memacu ekonomi negara dan ummah. Di samping itu, strategi memperkasakan ekonomi ummah juga disokong kuat dengan kesepakatan idea yang dicapai melalui siri pertemuan berasaskan wacana intelektual dan perhimpunan solidariti umat khususnya melalui penganjuran seminar, konvensyen pendidikan Islam dan penganjuran siri Kongres Ekonomi Islam dan Kongres Ekonomi Bumiputera yang dijayakan dari semasa ke semasa. Semua dasar dan kesepakatan idea ini mempamerkan keprihatinan dan bermotif ke arah memperkasakan ekonomi ummah.
Perlembagaan negara yang meletakkan Islam sebagai agama rasmi dan memberi perlindungan dan memberi hak keistimewaan kepada orang Melayu (Islam) adalah sumber kekuatan ummah berteraskan undang-undang. Berasaskan rujukan undang-undang dan kebijaksanaan pemimpin dalam menghadapi kemelut yang melanda umat, Dasar Ekonomi yang menggariskan strategi utama bagi menangani kemiskinan dan penyusunan semula masyarakat diperkenalkan kerajaan.
Di samping itu komitmen tinggi kerajaan terhadap usaha mendaulatkan syiar Islam diteruskan dengan memperkenalkan pelbagai dasar berhubung Islam (Dasar Penerapan Nilai Islam). Dasar berhu-bung ekonomi dan Islam ini dilihat mempunyai impak yang tersendiri dalam usaha memperkasa ekonomi ummah.
Hakikatnya, walaupun pelbagai dasar yang mempunyai motif yang murni telah diperkenalkan dan dilaksanakan, pencapaian yang diperlukan oleh dan dari umat ini perlu dilihat sebagai aspek yang berbeza. Atas dasar itu transformasi (perubahan) yang diperlukan oleh dan dari umat ini dilihat sebagai suatu proses pembaikan yang perlu berlaku secara berterusan. Perubahan ekonomi ummah kini dilihat sebagai persoalan yang semakin kritikal dalam ekonomi negara yang berasaskan masyarakat majmuk (penguasaan ekonomi negara berada di luar kawalan umat), mahupun dalam suasana dunia yang dilanda krisis kewangan yang parah kini.
Menggerak Potensi Memperkasa Ekonomi Ummah yang menjadi tema Kongres Ekonomi Islam Ketiga, dilihat sebagai suatu tema yang bukan saja relevan untuk usaha memperkasa ekonomi ummah di Malaysia, malah juga untuk rantau ini dan dunia Islam amnya. Atas dasar itu, kesepakatan yang tercapai pada kongres berkenaan dilihat amat relevan untuk dicadangkan sebagai asas kesepakatan baru di kalangan pemimpin ummah di rantau ini (negara Mabims khasnya), dalam kerangka melakukan transformasi ekonomi ummah pada masa depan.
Dari sudut bahasa transformasi boleh membawa maksud perubahan. Bagaimanapun terdapat beberapa istilah yang agak dekat dengan istilah transformasi, seperti istilah reformasi dan islah.
Bagaimanapun, bagi menghuraikan tajuk yang dikemukakan ini, istilah perubahan akan digunakan berpandukan kepada maksud ghaiyyara (ubah) seperti yang terungkap dalam Surah Ar Ra'd Ayat ke 11 yang bermaksud "Sesungguhnya Allah tidak akan mengubah keadaan suatu kaum sehingga mereka mengubah keadaan diri mereka sendiri".
Ayat ke 11 surah Ar Ra'd dengan maksud seperti yang dinyatakan diatas, mengikut Tafsir Al-Azhar, Prof Dr Hamka menyimpulkan bahawa "inilah ayat yang terkenal tentang kekuatan dan akal budi yang dianugerahkan Allah kepada manusia sehingga manusia itu dapat bertindak sendiri dan mengendalikan diri di bawah naungan Allah. Dia berkuasa atas dirinya dalam batas yang ditentukan oleh Allah. Sebab itu manusia itu pun wajiblah berusaha sendiri pula menentukan garis hidupnya".
Sementara Tafsir Fi Zilal lil Quran pula merumuskan bahawa ayat tersebut ini sebagai "itulah suatu hakikat yang meletakkan tanggungjawab yang berat ke atas manusia".
Berasaskan kepada rujukan yang dikemukakan ini, transformasi dalam konteks perbincangan ini lebih merujuk kepada perubahan seperti yang digariskan dalam al-Quran ayat ke 11, surah Ar Ra'd dan mendekati maksud islah seperti yang didefinisi dalam Kamus Dewan, di mana perubahan yang dimaksudkan tidak sampai menyentuh persoalan dasar seperti persoalan akidah yang menjadi pegangan umat selama ini dan tidak dapat menerima sepenuh maksud transformation seperti yang didefinisikan dalam Oxford Advanced Learner's Dictionary yang membawa maksud a complete change. (bersambung)
Penulis ialah Ketua Pengarah Yayasan Pembangunan Ekonomi Islam Malaysia (YaPEIM) yang menyampaikan ucapan bertajuk Transformasi Ekonomi Ummah: Pengalaman dan Peranan Semasa Negara (Malaysia, Brunei, Indonesia dan Singapura) Mabins (Perspektif Malaysia) sempena Muzakarah Ulama Mabins di Kuala Lumpur, baru-baru ini.
Thursday, August 20, 2009
Perbankan Islam perlu diperkukuh
Perbankan Islam perlu diperkukuh
Oleh Adha Ghazali
adha@bharian.com.my
DR MAHATHIR bersalaman dengan Azizan selepas menyampaikan ucaptama sempena pembukaan ICIEBF, di Langkawi, semalam.
Sistem konvensional gagal: Dr Mahathir
LANGKAWI: Sistem kewangan, terutama perbankan konvensional sedia ada perlu dinilai semula pelaksanaan operasinya kerana terbukti berdepan kegagalan, kata bekas Perdana Menteri, Tun Dr Mahathir Mohamad.
Sebaliknya, beliau berkata, sistem perbankan Islam yang dianggap modul terbaik perlu diperkukuhkan dan diperluaskan pelaksanaannya, sekali gus menjadi alternatif paling berkesan untuk menggantikan sistem sedia ada.
Katanya, sistem berkenaan memberikan penekanan khusus kepada aspek moral dan etika dalam menjalankan perniagaan yang dianggap antara kelemahan ketara pelaksanaan sistem perbankan konvensional kini.
"Bagi saya, sistem perbankan yang diamalkan sejak sekian lama terbukti gagal dengan teruk sekali. Justeru, satu inisiatif perlu diambil untuk mengkaji pelaksanaannya sebaik mungkin.
"Malah, sistem berkenaan berkemungkinan besar perlu diganti dengan sistem yang lebih efektif seperti disarankan Islam, yang terbukti sukar dimanipulasi golongan yang tidak amanah dan tidak bertanggungjawab.
"Namun, penting sekali pelaksanaan sistem perbankan Islam ini difahami secara mendalam dalam segenap aspek untuk memastikan ia mampu menyumbang kepada pembangunan negara," katanya kepada pemberita, di sini, semalam.
Terdahulu, beliau menyampaikan ucaptama sempena pembukaan Persidangan Ekonomi, Perbankan dan Kewangan Islam Antarabangsa (ICIEBF) dihadiri 194 perwakilan, termasuk dari luar negara, di sini.
Majlis anjuran Kolej Universiti Insaniah (Insaniah) dengan kerjasama Institut Kajian dan Latihan Islam (IRTI) dan Bank Pembangunan Islam (IDB) itu dirasmikan Menteri Besar Kedah, Datuk Seri Azizan Abdul Razak.
Dr Mahathir ketika ditanya mengenai pelaksanaan sistem perbankan Islam berkata, ia menunjukkan perkembangan yang baik dan semakin diterima ramai.
Katanya, terbukti apabila Petronas sendiri mencatat keuntungan mencecah RM14 bilion melalui pembabitannya dalam perbankan Islam.
"Paling membanggakan, masyarakat bukan beragama Islam turut menerima sistem perbankan Islam ini dan mereka aktif mengkaji kesesuaian pelaksanaannya dengan sistem sedia ada," katanya.
Terdahulu, dalam ucapannya, Dr Mahathir berkata, sistem kewangan kini tidak lagi berada di bawah kawalan kerajaan, tetapi pihak bank yang jelas sekali mempunyai objektif berbeza.
Oleh Adha Ghazali
adha@bharian.com.my
DR MAHATHIR bersalaman dengan Azizan selepas menyampaikan ucaptama sempena pembukaan ICIEBF, di Langkawi, semalam.
Sistem konvensional gagal: Dr Mahathir
LANGKAWI: Sistem kewangan, terutama perbankan konvensional sedia ada perlu dinilai semula pelaksanaan operasinya kerana terbukti berdepan kegagalan, kata bekas Perdana Menteri, Tun Dr Mahathir Mohamad.
Sebaliknya, beliau berkata, sistem perbankan Islam yang dianggap modul terbaik perlu diperkukuhkan dan diperluaskan pelaksanaannya, sekali gus menjadi alternatif paling berkesan untuk menggantikan sistem sedia ada.
Katanya, sistem berkenaan memberikan penekanan khusus kepada aspek moral dan etika dalam menjalankan perniagaan yang dianggap antara kelemahan ketara pelaksanaan sistem perbankan konvensional kini.
"Bagi saya, sistem perbankan yang diamalkan sejak sekian lama terbukti gagal dengan teruk sekali. Justeru, satu inisiatif perlu diambil untuk mengkaji pelaksanaannya sebaik mungkin.
"Malah, sistem berkenaan berkemungkinan besar perlu diganti dengan sistem yang lebih efektif seperti disarankan Islam, yang terbukti sukar dimanipulasi golongan yang tidak amanah dan tidak bertanggungjawab.
"Namun, penting sekali pelaksanaan sistem perbankan Islam ini difahami secara mendalam dalam segenap aspek untuk memastikan ia mampu menyumbang kepada pembangunan negara," katanya kepada pemberita, di sini, semalam.
Terdahulu, beliau menyampaikan ucaptama sempena pembukaan Persidangan Ekonomi, Perbankan dan Kewangan Islam Antarabangsa (ICIEBF) dihadiri 194 perwakilan, termasuk dari luar negara, di sini.
Majlis anjuran Kolej Universiti Insaniah (Insaniah) dengan kerjasama Institut Kajian dan Latihan Islam (IRTI) dan Bank Pembangunan Islam (IDB) itu dirasmikan Menteri Besar Kedah, Datuk Seri Azizan Abdul Razak.
Dr Mahathir ketika ditanya mengenai pelaksanaan sistem perbankan Islam berkata, ia menunjukkan perkembangan yang baik dan semakin diterima ramai.
Katanya, terbukti apabila Petronas sendiri mencatat keuntungan mencecah RM14 bilion melalui pembabitannya dalam perbankan Islam.
"Paling membanggakan, masyarakat bukan beragama Islam turut menerima sistem perbankan Islam ini dan mereka aktif mengkaji kesesuaian pelaksanaannya dengan sistem sedia ada," katanya.
Terdahulu, dalam ucapannya, Dr Mahathir berkata, sistem kewangan kini tidak lagi berada di bawah kawalan kerajaan, tetapi pihak bank yang jelas sekali mempunyai objektif berbeza.
Buffet urges US to stop 'printing' money and halt debt rise
Published: Thursday August 20, 2009 MYT 7:58:00 AM
Billionaire Buffet urges US to stop 'printing' money and halt debt rise
WASHINGTON: Now that the worst of the economic crisis is past and recovery is slowly under way, Congress must halt the mounting increase in U.S. debt to avoid damage to long-term growth and destruction of the dollar, Warren Buffett is urging.
The plainspoken billionaire weighed in with his view in an Op-Ed piece published in The New York Times Wednesday, saying that once recovery is solidified, lawmakers need to exercise "extraordinary political will" and slow the printing of money to finance the spike in debt.
That huge spending for financial bailout and economic stimulus was sorely needed to rescue the economy in its greatest peril since the 1930s, Buffett said, but now "unchecked emissions" of dollars "will certainly cause the purchasing power of currency to melt" the way runaway carbon emissions will likely melt icebergs.
With government spending now nearly double what it is taking in, "truly major changes in both taxes and outlays will be required," Buffett wrote.
"A revived economy can't come close to bridging that sort of gap."
Buffett, one of the world's wealthiest men, enjoys opining on issues of the day.
And as the "Oracle of Omaha" and head of a successful investment firm, his views carry weight in the public arena.
He has gained a sharper political profile in recent years and has spoken out, for example, on the obligation of the privileged to help the poor.
Buffett was a top economic adviser to Republican Arnold Schwarzenegger's first campaign for California governor and advised Democrat John Kerry's presidential campaign in 2004.
Last September at the height of the financial turmoil, Buffett's firm, Berkshire Hathway Inc., rushed in with a $5 billion in investment in Wall Street powerhouse Goldman Sachs Group Inc., a move viewed as a vote of confidence for a survivor of a crisis that felled two of its investment banking peers.
The economy "is now out of the emergency room and appears to be on a slow path to recovery," Buffett wrote in the Op-Ed.
"But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself."
Because of the deficit, the amount of U.S. debt that is publicly held likely will rise to around 56 percent of Gross Domestic Product this fiscal year ending Oct. 1, from 41 percent last year, Buffett noted.
The three ways of financing the rising debt - borrowing from other countries, borrowing from Americans or printing money - all carry problems, he said.
"The United States is spewing a potentially damaging substance into our economy - greenback emissions," Buffett wrote. - AP
Latest business news from AP-Wire
Billionaire Buffet urges US to stop 'printing' money and halt debt rise
WASHINGTON: Now that the worst of the economic crisis is past and recovery is slowly under way, Congress must halt the mounting increase in U.S. debt to avoid damage to long-term growth and destruction of the dollar, Warren Buffett is urging.
The plainspoken billionaire weighed in with his view in an Op-Ed piece published in The New York Times Wednesday, saying that once recovery is solidified, lawmakers need to exercise "extraordinary political will" and slow the printing of money to finance the spike in debt.
That huge spending for financial bailout and economic stimulus was sorely needed to rescue the economy in its greatest peril since the 1930s, Buffett said, but now "unchecked emissions" of dollars "will certainly cause the purchasing power of currency to melt" the way runaway carbon emissions will likely melt icebergs.
With government spending now nearly double what it is taking in, "truly major changes in both taxes and outlays will be required," Buffett wrote.
"A revived economy can't come close to bridging that sort of gap."
Buffett, one of the world's wealthiest men, enjoys opining on issues of the day.
And as the "Oracle of Omaha" and head of a successful investment firm, his views carry weight in the public arena.
He has gained a sharper political profile in recent years and has spoken out, for example, on the obligation of the privileged to help the poor.
Buffett was a top economic adviser to Republican Arnold Schwarzenegger's first campaign for California governor and advised Democrat John Kerry's presidential campaign in 2004.
Last September at the height of the financial turmoil, Buffett's firm, Berkshire Hathway Inc., rushed in with a $5 billion in investment in Wall Street powerhouse Goldman Sachs Group Inc., a move viewed as a vote of confidence for a survivor of a crisis that felled two of its investment banking peers.
The economy "is now out of the emergency room and appears to be on a slow path to recovery," Buffett wrote in the Op-Ed.
"But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself."
Because of the deficit, the amount of U.S. debt that is publicly held likely will rise to around 56 percent of Gross Domestic Product this fiscal year ending Oct. 1, from 41 percent last year, Buffett noted.
The three ways of financing the rising debt - borrowing from other countries, borrowing from Americans or printing money - all carry problems, he said.
"The United States is spewing a potentially damaging substance into our economy - greenback emissions," Buffett wrote. - AP
Latest business news from AP-Wire
Sunday, August 16, 2009
Islamic Money against the Euro and Dollar
Islamic Money against the Euro and Dollar
On January 1, 1999, Europe celebrated its momentous event of a single currency for its eleven participating members that have qualified to join the European Monetary Union according to its Convergence Criteria. Following this, it is likely that Britain, Sweden, Denmark and Greece that have either opted out or were not qualified according to the Convergence Criteria at this time, will join by the year 2002. By the year 2002 a single currency called the Euro will become the commercial medium of market exchange in Europe for the participating countries.
By establishing a single currency for the exchange of goods and services domestically and internationally, the Euro will become a determining factor of a unified monetary policy, fiscal policy, exchange rates, interest rates, and thereby, also of productivity and technological consequences of these economic changes in the participating countries. Internationally, global capital markets and investment outsourcers will see the rise of two competing currency mediums, the U.S. Dollar and the Euro. Countries around the world will be holding their foreign reserves and transacting their tradable in terms of these two currencies. International currencies will thus become convertible in terms of two competing units.
At such a juncture, the Muslim mind must recount as to what position the Muslim World holds in the midst of the global division of capital markets between these two competing super-currencies? What would be the state of her own resource valuation in the global scene? Do the Muslims have an agenda for change? If they do have an Agenda for change, what are the constructs of that Muslim future?
Until the end of World War II the Western Hemisphere has been engaged in the most heinous kinds of wars and civil strife within itself. Yet through the Bretton Woods Institutions established in 1944, followed by a number of economic and monetary unions between the members of the Western Hemisphere, these same warring nations could rise to a social contract that eliminated wars and political dissensions between them. It was indeed a civil accord enacted within the institution of democracy that did the work for the Western Hemisphere.
The Muslim World -- with its teeming millions, vast resources, and above all with the greatest miracle, the Qur'an, along with the guidance of the Prophet Muhammad, Sunnah, the great Islamic legacy of Shura (consultation, discourse and interactions), Ijtihad (epistemological inquiry) and Ijma (consensus), all of which are premised on the exercise of deep Islamic knowledge, tolerance and discourse -- could not realize its unity. What are then the structural issues according to which Europe could unite and the Muslims could not?
It will be too shallow an answer to this question to differentiate the Western World in respect to its democracy and the Muslim world as being bereft of democracy. Democracy is a political philosophy that flourishes on the principles of conflict guiding markets in the form of competition and capitalism that thrives on the power of corporations and the acquisitive passion for wealth. Politically, democracy thrives on the back of institutions that muster power and hegemony by majority rule. Any moral value of doing things and of directing economic resources is subsumed within market consequentialism.
There is no other premise from which democracy derives its rules of conduct than the collective power of individuals let loose in a world of competing behavior. Such is the nature of individualism that aggregates itself from the level of individuals to institutions, to governments and to the global capitalist order. On such a utilitarian world view thrives the Western meaning of democracy.
Now take away from democracy the ultimate supremacy of the individual, the powerful lobby groups and thus of governments so formed. We will find that democracy and capitalism weaken into dysfunctional states. With this weakening comes about the collapse of the entire economic, social and political edifice on which democracy, capitalism and western institutionalism confiscate on others to survive.
Thus the imitation of Western democracy is as self-defeating as is the present days' Muslim political vacuity in the absence of a well-defined Muslim social contract. On the other hand, the divide between Islam and the West is based on two polar world views that cannot cross lines for a permanent convergence. Any cross-fertilization between the two can only be in terms of mechanical methods that we can share. It can never be in terms of the core methodology of understanding and conducting life in comprehensive ways. When Muslim forgot this subtle difference for a long time now they became blind to the many trappings of Western ways of thinking while being unable to understand this inimical culture, and thereby, being unable to adapt to it. When rulers and demagogues in the Muslim World imitate the Western designs and prevail over their citizenry, they try to lock nations into expensive bottlenecks of development, costly technological change, unequal distribution of power, deprivation of freedom and rights to the masses. Western lobbying is perpetuated through this machinery of autocratic governance as also by the Muslim World's lethargy and subservience to the costly technology, de-equalizing market processes and the concomitant governance of the West genre. To live a day in such inhuman bondage is yet another moment of increased slavery of the Muslim mind, body and soul to Western masters.
The European Monetary Union on which is premised the Euro was greatly financed by Petro-dollars that were held as assets by the wealthy Muslim rulers in EMU. By the same token, when the capital surplus Arab countries bought assets in the International Monetary Fund, they in turn tightened the grips of the IMF over these assets by securing Arab capital in Western capital markets instead of in the Muslim Countries. Consequently, the double whamy fell on the Muslim World. On the one hand, the absence of any expectations for good financial support could not generate the investment climate in the Muslim World. On the other hand, there was never enough liquidity available to support investments in the Muslim World. Finally, when global capitalism in its oppressive attire of global governance over markets and institutions arose from the West, investment capital entered Muslim countries as speculative short-term capital. These were riddled and driven by interest rate instability and proved to be unsustainable both in terms of projects and in capital markets.
Thus the alienation of the Muslim World from its own fundamental roots of understanding and doing things and its enslavement to the alien culture drifted the Muslim World from its solidarity, which could otherwise have seen the rise of parallels like the Euro and the Dollar in terms of the Islamic Money, Islamic Currency, Integrated Islamic Capital Markets and a Globally Interlinked Islamic Common Market. Herein, would be solved the present days problems of economic instability, currency run-off, investment needs, political subservience, inequity and poverty, all of which plague the Muslim World today. Along with this reconstruction would arise the political stability and organization for the spread and practice of Islamic Transformation. Thus, it would arise the Muslim march toward the Ummah as the Islamic globalization process.
The Islamic globalization process of Ummah as the goal of the Muslim World would look at markets in ways contrary to the capitalist greed and human deprivation now being unleashed upon the Muslim World. The irony is abhorring that in the face of exorbitant wealth possessed by a few, wealth that lies in the hands of and are controlled by Western masters, there continues to be abject deprivation and impoverishment among the majority of Muslim populations.
Islamic Money would be based on the 100 per cent reserve requirement linking monetary valuation with real sectoral activities and not with speculation or promissory notes. The productive yield arising from such a real monetary mobilization would solve the problem of low productivity among factors of production. The participatory enterprises in the midst of these transformations and real monetary linkages would remove the relevance of interest rates. Such a system would replace interest transactions with resource mobilization into participatory enterprises. Consequently, economic efficiency, distributive equity, ownership, property rights and empowerment would increase across participatory enterprises. Poverty would be eradicated and alleviated through the force of such participatory entrepreneurial activity and by the direct linkages between money and real sectoral activity.
This freedom of participatory decision-making and ownership of assets would mean the rise of the Islamic Social Contract based on the process of Shura (discourse and interaction) which is organized and realized by the understanding and application of the Precept of Unity of Allah (Tawhid) in all walks of life and thought. Such a focus will turn away the Muslim global order from the anthropocentric character of conflict, competition and individualism that grounds democracy as a political philosophy in the West. The reversal will instead be towards ethical governance of markets and exchange under the enlightened process of learning by doing by discourse, complementarily and integration as created by Islam.
The Islamic Common Market and the Islamic Capital Market would be a global integration of various regional Islamic blocs on the basis of the coordinating mechanism of the Islamic Social Contract in terms of the money-real sectoral linkages, inter-communal trade and institutional guidance of these across the Muslim World. The effect of this interrelated monetary and real sectoral activity would be the formation of the Islamic currency revolving around the financial and economic instruments that establish the money-real sectoral linkage. Thereby, an increase of spending in the Islamically recommended good things of life would create the environment of abundance in life-fulfilling goods. This in turn would generate income and wealth from real returns.
The abolition of speculation and its replacement by long-term Islamic investments in diverse Islamic opportunities, complementary possibilities and technological outlets, in government and consumer spending across the populous Muslim World, will bring about the much needed stability in markets for financial instruments and real goods and services. Hence a productivity linked stable exchange rate will emerge from such a stable market order. The enhancing effects of stable exchange rates and prices will revert to further resource mobilization, wealth, growth, development and social well-being.
Zakat will arise from the growing wealth of such a dynamic social economy and would be increasingly channeled into productive outlets for ameliorating the poor and guaranteeing those human resources and basic needs. Institutions for mobilizing Zakat as an international resource will create microenterprises and human resource development for poverty alleviation. The great institutions of social well-being based on the mobilization of Zakat into human development for achieving security, dignity and productive transformation of the recipients, while always allocating a part of it in current consumption, for the destitute, the sick and the old, would generate industry and enterprises around such uses of the Zakat Fund. Gross unemployment and income disparity will thus be eliminated. With social security thus returning to the Muslim nations, social malaise will also decline. Much will be saved for directing into the higher pursuits of life.
With such momentous changes in the Muslim World towards the Ummah, the Dollar and the Euro will prove to be weak currencies before the Islamic Money and Islamic Currency, for they will continue to be engulfed in instability caused by interest rate movements. These will permanently disturb their currency values. The Dollar and Euro will thus continue to be simply monetary units governed by uncertain interest rate and exchange rate mechanisms. Monetary policy will remain independent of real sectoral activities. Price movements will thus be affected by the uncertainties ensuing from the monetary sector. Such an adverse effect of the monetary sector on the real sector will cause instability in both the real and the financial sectors.
Such instabilities will remain as the great predicament of the Euro and Dollar. The contrary is true of a competing monetary system and its currency that can deliver a 100 per cent reserve requirement while interconnecting money with real sector activities. Here then lies the ultimate financial architecture by means of Islamic Money, Islamic Currency, Islamic Capital Market and Islamic Common Market .These mark the worldly model of the Ummah. In it the lure for wealth is strategically replaced by the goals of production and distribution of wealth through the money-real sector linkages. This abolishes interest rates from economic transactions and premises human well-being on resource mobilization into Islamic possibilities.
Let Muslim around the world, nationally, sub-nationally and collectively take up serious work in this direction of Islamic Transformation toward the Ummah in the new millennium. Let this invocation remain our Ramadhan Resolution 1419H for its active emulation into the new Islamic millennium. May Allah help us in our rightful endeavor.
On January 1, 1999, Europe celebrated its momentous event of a single currency for its eleven participating members that have qualified to join the European Monetary Union according to its Convergence Criteria. Following this, it is likely that Britain, Sweden, Denmark and Greece that have either opted out or were not qualified according to the Convergence Criteria at this time, will join by the year 2002. By the year 2002 a single currency called the Euro will become the commercial medium of market exchange in Europe for the participating countries.
By establishing a single currency for the exchange of goods and services domestically and internationally, the Euro will become a determining factor of a unified monetary policy, fiscal policy, exchange rates, interest rates, and thereby, also of productivity and technological consequences of these economic changes in the participating countries. Internationally, global capital markets and investment outsourcers will see the rise of two competing currency mediums, the U.S. Dollar and the Euro. Countries around the world will be holding their foreign reserves and transacting their tradable in terms of these two currencies. International currencies will thus become convertible in terms of two competing units.
At such a juncture, the Muslim mind must recount as to what position the Muslim World holds in the midst of the global division of capital markets between these two competing super-currencies? What would be the state of her own resource valuation in the global scene? Do the Muslims have an agenda for change? If they do have an Agenda for change, what are the constructs of that Muslim future?
Until the end of World War II the Western Hemisphere has been engaged in the most heinous kinds of wars and civil strife within itself. Yet through the Bretton Woods Institutions established in 1944, followed by a number of economic and monetary unions between the members of the Western Hemisphere, these same warring nations could rise to a social contract that eliminated wars and political dissensions between them. It was indeed a civil accord enacted within the institution of democracy that did the work for the Western Hemisphere.
The Muslim World -- with its teeming millions, vast resources, and above all with the greatest miracle, the Qur'an, along with the guidance of the Prophet Muhammad, Sunnah, the great Islamic legacy of Shura (consultation, discourse and interactions), Ijtihad (epistemological inquiry) and Ijma (consensus), all of which are premised on the exercise of deep Islamic knowledge, tolerance and discourse -- could not realize its unity. What are then the structural issues according to which Europe could unite and the Muslims could not?
It will be too shallow an answer to this question to differentiate the Western World in respect to its democracy and the Muslim world as being bereft of democracy. Democracy is a political philosophy that flourishes on the principles of conflict guiding markets in the form of competition and capitalism that thrives on the power of corporations and the acquisitive passion for wealth. Politically, democracy thrives on the back of institutions that muster power and hegemony by majority rule. Any moral value of doing things and of directing economic resources is subsumed within market consequentialism.
There is no other premise from which democracy derives its rules of conduct than the collective power of individuals let loose in a world of competing behavior. Such is the nature of individualism that aggregates itself from the level of individuals to institutions, to governments and to the global capitalist order. On such a utilitarian world view thrives the Western meaning of democracy.
Now take away from democracy the ultimate supremacy of the individual, the powerful lobby groups and thus of governments so formed. We will find that democracy and capitalism weaken into dysfunctional states. With this weakening comes about the collapse of the entire economic, social and political edifice on which democracy, capitalism and western institutionalism confiscate on others to survive.
Thus the imitation of Western democracy is as self-defeating as is the present days' Muslim political vacuity in the absence of a well-defined Muslim social contract. On the other hand, the divide between Islam and the West is based on two polar world views that cannot cross lines for a permanent convergence. Any cross-fertilization between the two can only be in terms of mechanical methods that we can share. It can never be in terms of the core methodology of understanding and conducting life in comprehensive ways. When Muslim forgot this subtle difference for a long time now they became blind to the many trappings of Western ways of thinking while being unable to understand this inimical culture, and thereby, being unable to adapt to it. When rulers and demagogues in the Muslim World imitate the Western designs and prevail over their citizenry, they try to lock nations into expensive bottlenecks of development, costly technological change, unequal distribution of power, deprivation of freedom and rights to the masses. Western lobbying is perpetuated through this machinery of autocratic governance as also by the Muslim World's lethargy and subservience to the costly technology, de-equalizing market processes and the concomitant governance of the West genre. To live a day in such inhuman bondage is yet another moment of increased slavery of the Muslim mind, body and soul to Western masters.
The European Monetary Union on which is premised the Euro was greatly financed by Petro-dollars that were held as assets by the wealthy Muslim rulers in EMU. By the same token, when the capital surplus Arab countries bought assets in the International Monetary Fund, they in turn tightened the grips of the IMF over these assets by securing Arab capital in Western capital markets instead of in the Muslim Countries. Consequently, the double whamy fell on the Muslim World. On the one hand, the absence of any expectations for good financial support could not generate the investment climate in the Muslim World. On the other hand, there was never enough liquidity available to support investments in the Muslim World. Finally, when global capitalism in its oppressive attire of global governance over markets and institutions arose from the West, investment capital entered Muslim countries as speculative short-term capital. These were riddled and driven by interest rate instability and proved to be unsustainable both in terms of projects and in capital markets.
Thus the alienation of the Muslim World from its own fundamental roots of understanding and doing things and its enslavement to the alien culture drifted the Muslim World from its solidarity, which could otherwise have seen the rise of parallels like the Euro and the Dollar in terms of the Islamic Money, Islamic Currency, Integrated Islamic Capital Markets and a Globally Interlinked Islamic Common Market. Herein, would be solved the present days problems of economic instability, currency run-off, investment needs, political subservience, inequity and poverty, all of which plague the Muslim World today. Along with this reconstruction would arise the political stability and organization for the spread and practice of Islamic Transformation. Thus, it would arise the Muslim march toward the Ummah as the Islamic globalization process.
The Islamic globalization process of Ummah as the goal of the Muslim World would look at markets in ways contrary to the capitalist greed and human deprivation now being unleashed upon the Muslim World. The irony is abhorring that in the face of exorbitant wealth possessed by a few, wealth that lies in the hands of and are controlled by Western masters, there continues to be abject deprivation and impoverishment among the majority of Muslim populations.
Islamic Money would be based on the 100 per cent reserve requirement linking monetary valuation with real sectoral activities and not with speculation or promissory notes. The productive yield arising from such a real monetary mobilization would solve the problem of low productivity among factors of production. The participatory enterprises in the midst of these transformations and real monetary linkages would remove the relevance of interest rates. Such a system would replace interest transactions with resource mobilization into participatory enterprises. Consequently, economic efficiency, distributive equity, ownership, property rights and empowerment would increase across participatory enterprises. Poverty would be eradicated and alleviated through the force of such participatory entrepreneurial activity and by the direct linkages between money and real sectoral activity.
This freedom of participatory decision-making and ownership of assets would mean the rise of the Islamic Social Contract based on the process of Shura (discourse and interaction) which is organized and realized by the understanding and application of the Precept of Unity of Allah (Tawhid) in all walks of life and thought. Such a focus will turn away the Muslim global order from the anthropocentric character of conflict, competition and individualism that grounds democracy as a political philosophy in the West. The reversal will instead be towards ethical governance of markets and exchange under the enlightened process of learning by doing by discourse, complementarily and integration as created by Islam.
The Islamic Common Market and the Islamic Capital Market would be a global integration of various regional Islamic blocs on the basis of the coordinating mechanism of the Islamic Social Contract in terms of the money-real sectoral linkages, inter-communal trade and institutional guidance of these across the Muslim World. The effect of this interrelated monetary and real sectoral activity would be the formation of the Islamic currency revolving around the financial and economic instruments that establish the money-real sectoral linkage. Thereby, an increase of spending in the Islamically recommended good things of life would create the environment of abundance in life-fulfilling goods. This in turn would generate income and wealth from real returns.
The abolition of speculation and its replacement by long-term Islamic investments in diverse Islamic opportunities, complementary possibilities and technological outlets, in government and consumer spending across the populous Muslim World, will bring about the much needed stability in markets for financial instruments and real goods and services. Hence a productivity linked stable exchange rate will emerge from such a stable market order. The enhancing effects of stable exchange rates and prices will revert to further resource mobilization, wealth, growth, development and social well-being.
Zakat will arise from the growing wealth of such a dynamic social economy and would be increasingly channeled into productive outlets for ameliorating the poor and guaranteeing those human resources and basic needs. Institutions for mobilizing Zakat as an international resource will create microenterprises and human resource development for poverty alleviation. The great institutions of social well-being based on the mobilization of Zakat into human development for achieving security, dignity and productive transformation of the recipients, while always allocating a part of it in current consumption, for the destitute, the sick and the old, would generate industry and enterprises around such uses of the Zakat Fund. Gross unemployment and income disparity will thus be eliminated. With social security thus returning to the Muslim nations, social malaise will also decline. Much will be saved for directing into the higher pursuits of life.
With such momentous changes in the Muslim World towards the Ummah, the Dollar and the Euro will prove to be weak currencies before the Islamic Money and Islamic Currency, for they will continue to be engulfed in instability caused by interest rate movements. These will permanently disturb their currency values. The Dollar and Euro will thus continue to be simply monetary units governed by uncertain interest rate and exchange rate mechanisms. Monetary policy will remain independent of real sectoral activities. Price movements will thus be affected by the uncertainties ensuing from the monetary sector. Such an adverse effect of the monetary sector on the real sector will cause instability in both the real and the financial sectors.
Such instabilities will remain as the great predicament of the Euro and Dollar. The contrary is true of a competing monetary system and its currency that can deliver a 100 per cent reserve requirement while interconnecting money with real sector activities. Here then lies the ultimate financial architecture by means of Islamic Money, Islamic Currency, Islamic Capital Market and Islamic Common Market .These mark the worldly model of the Ummah. In it the lure for wealth is strategically replaced by the goals of production and distribution of wealth through the money-real sector linkages. This abolishes interest rates from economic transactions and premises human well-being on resource mobilization into Islamic possibilities.
Let Muslim around the world, nationally, sub-nationally and collectively take up serious work in this direction of Islamic Transformation toward the Ummah in the new millennium. Let this invocation remain our Ramadhan Resolution 1419H for its active emulation into the new Islamic millennium. May Allah help us in our rightful endeavor.
ISLAMIC BANKING IN MALAYSIA
Malaysia Toward an Islamic State
ISLAMIC BANKING IN MALAYSIA
1. Introduction
A significant development in the Muslim World in the seventies and eighties was the pan-Islamic movement. This movement aimed to revive the glory of Islam and began to demand the application of Shariah in all aspects of life. The effort to establish in Islamic Banking is one manifestation of this movement. The Muslim countries began to rediscover Islam and wanted to mould their economic and financial activities in accordance with Islamic values.
The seventies and eighties of the present century has witnessed the emergence of a number of Islamic banks and financial institutions whose modes of operation are distinct from those of conventional banks. The establishment of these institutions is one of the several manifestations of the 'back to religion' movement which is fast gaining strength in present day muslim societies (quoted in Abulhasan et al. 1991: 155)
The Muslim world has been over-burdened for too long by western modes of social and economic thought. A large portion of the Muslim world had been subjugated culturally, economically and politically by the colonial powers. Even though they have achieved independence from their colonial masters, the colonial principles are still deep rooted in the social, economic, political and cultural life of Muslim communities. Thus, the emergence and expansion of an Islamic banking system is the starting point of a new path breaking change in the Muslim world. It is a process of liberating the Muslims from the yoke of domination by western thought, values and institutions and remodeling their social and economic life in accordance with shariah.
The issue of Riba has long been a problem for Muslims. Even what constituted Riba itself has been a subject under serious discussion. The existence of Riba has been argued to be a major factor for the low participation of the Malays in the economic activities of Malaysia. The establishment of BIMB is a major step towards an interest-free financial system in Malaysia. This marked the establishment of more Islamic commercial institutions under the new mode of the Islamization Policy of Dr. Mahathir Muhammad.
2. The Emergence of Islamic Banks
The elementary concepts of modern Islamic banking date back to the mid 1940s. Models for Islamic banking appeared in the mid-1950s, but comprehensive and detailed concepts for interest-free banking only appeared in the late 1960s. The political environment during that time almost all Muslim countries was hardly favorable for a change in the entire system of banking and finance. In fact, the first experiment in Islamic banking was set up undercover in Mit Ghamr, Egypt in 1963. The model for the experiment was the German Savings bank modified to comply with Islamic principles, i.e. it was barred from charging and paying interest. Nevertheless, the charter of the Bank did not refer to Shariah.
The second Islamic Conference of Foreign Ministers in 1973 adopted a document on the "Institution of an Islamic Bank, Economics and Islamic Doctrines". In 1974, the Islamic Development Bank (IDB) was established as a result of this conference. The member states of the OIC became members of the IDB. The IDB helped to establish a number of Islamic banks in various countries.
Beginning in 1974, several Islamic banks have been established which include: Dubai Islamic Bank in 1975, Faisal Islamic Bank of Sudan in 1977, Faisal Islamic Egyptian Bank and Islamic Bank of Jordan in 1978, Islamic Bank of Bahrain in 1979, the International Islamic Bank of Investment and Development, Luxembourg in 1980 and BIMB in 1983. Today, there are more than a hundred financial institutions which claim to be operating partially or fully on an interest-free basis in 34 countries.
Islamic banking has been adopted at the national level in Pakistan, Sudan, and Iran, and they have decided to Islamize the whole banking system. Iran enacted a new banking law in August 1983 requiring complete abolition of interest by March 1985 (M.N. Siddiqi 1988: 48). Sudan opted for a total change when a presidential decree was issued in 1984, directing all banks to stop dealing with interest. The Central Bank of Sudan, on 10 December 1984, directed all commercial banks to stop dealing with interest with immediate effect, and to negotiate conversion of existing deposit into investment deposits or any other kind of deposits in accordance with shariah. All outstanding interest bearing advances were either to be settled through repayment or they had to be converted into one of the Islamic modes of financing. Foreign transactions were to continue on the basis of interest till an alternative way as available.
3. The Theory of Islamic Banking
3.1 Economic Impact of Interest
At the outset, the most important departure of Islamic banking from conventional banking is the prohibition of Riba, and promoting Profit and Loss Sharing (PLS) as an alternative to Riba. The prohibition of interest is obvious in the Quran as well as in the Sunnah. Riba originally meant 'increase and growth'. This meaning is taken from the Quran (22:5). Increase means the increase over capital or nominal amount, the increase being either large or small. According to Islamic law, Riba technically refers to the premium that must be paid by the borrower to the lender along with the principal amount as a condition for an extension in its maturity. In 1992, the Pakistan Federal Shariah Court ruled that:
It makes no difference whether the loan is for consumption purpose or for commercial purposes. It does not matter if the rate of interest is low or high, simple or compound for short or long times, between the two Muslims or between a citizen and a state or between two states. Any excess which is pre-determined over the principal sum in a loan transaction will constitute Riba in all circumstances (quoted in K. Zaheed 1994: 83)
This immediately leads us to the essence of Islamic banking; an Islamic bank is a financial institution that conducts its operations in accordance with Shariah principles. If we have to contrast the Islamic bank to an existing conventional bank, we may say that while the latter earns the major portion of its revenues and expenses on the basis of interest, the former earns the same on the profits. In the operation of an Islamic bank, profits therefore assume the place of interest in a conventional bank. 'Usury', the original name for modern interest.
BANK ISLAM MALAYSIA BERHAD (BIMB)
BIMB was established after the enacting of the Islamic Banking Act (IBA) in 1983, the IBA permitted the establishment of the first Islamic Bank in Malaysia. BIMB with a paid up capital of RM 100 million and an authorised capital of RM 500 million is carrying out its activities on an interest free basis. Tengku Razaleigh , the then Finance Minister described the Islamic bank as the:
First step in the government's efforts to instill Islamic values into the country's economic and financial systems as a replacement for the current Western-base economic system (NST 6 July 1982)
Takaful Malaysia
Syarikat Takaful Malaysia Berhad was incorporated on 29 November 1984, has an authorised capital of RM 500 million and a paid up capital of RM 55 million. It has been converted into a public quoted company with the listing of its shares on the Main Board of the Kuala Lumpur Stock Exchange since 31 July 1996. As a subsidiary company of BIMB Holdings Berhad, 65.5% of its equity is held by the BIMB.
Other major shareholders are the State Islamic Religious Councils / Baitulmals of Terengganu, Pahang, Negeri Sembilan and Amanah Saham Bank Islam (ASBI).
The company objectives is to provide takaful services (Islamic Insurance) at the highest standard of efficiency and professionalism to all Muslims and the population in Malaysia.
Lembaga Tabung Haji (Pilgrims Fund Board)
In line with the concept of Islam as Ad-deen, a way of life in this world and the Hereafter, every ibadah commanded by Allah S.W.T. is of benefit in this and the next world. To fulfill this desire to perform the Hajj pilgrimage, Muslims have to find enough money for the journey to the Holy Land. To avoid riba' (usury), which is haram (forbidden) in Islam, Muslims resort to various traditional methods of saving. Of course, there are those who dispose their animals or inherited properties for cash to cover their Hajj expenses, a practice which ultimately imposes economic burden on themselves and their families while they are on the pilgrimage or when they return from the pilgrimage. Such practice also does not augur well for the rural economy, besides retarding the country’s economic growth.
Realising this as well as to help Muslims to save enough money without involving in activities deemed haram in Islam, Perbadanan Wang Simpanan Bakal-Bakal Haji was set up in November 1962, and began its operation on 30 September 1963. The corporation to manage the savings of Muslims, intending to perform the Hajj pilgrimage, was the result of a working paper entitled "Rancangan Membaiki Ekonomi Bakal-Bakal Haji" presented by Royal Professor Ungku Aziz in 1959 to improve the economy of intending pilgrims.
Objectives:
Enable Muslims to gradually save enough money to meet the cost of performing the Hajj or other beneficial expenses; Enable Muslims, through the use of their savings, to take active part in capital investment in a way, halal to Islam, and Provide protection, supervision and welfare to Hajj pilgrims.
Pusat Pungutan Zakat (Zakat Collection Center)
Established by The Federal Territory Islamic Council, Kuala Lumpur (known as MAIWP). It started its operations in 1991. PPZ uses a corporate style of management through the setting up by the Council of a company called Hartasuci Sdn. Bhd. which is placed under a foundation called Yayasan Taqwa Wilayah Persekutuan Berhad controlled by the Council. PPZ's basic responsibility is to collect zakat for the Council. It is not responsible for zakat distribution which is done by other agencies/sections of the Council.
Organization Structure Externally, PPZ is placed under the foundation which is responsible to the Council. Internally, PPZ has a Board of Directors which supervises management headed by a General Manager. There are two divisions, namely the Operations Division (headed by a Manager), and the Finance & Administration Division. Each division in turn has various functional units. Basic functions of PPZ :
To explain to the public about zakat and the responsibility of paying zakat. To help payers, both individuals and companies, calculate their zakat. To collect zakat and to increase the collection, both in terms of amount and payers.
All Collection is immediately bank-in into the Baitulmal account (of the Federal Territory Islamic Council). Apart from the above mentioned responsibilities PPZ is also responsible in producing daily, monthly, quarterly and yearly reports, both for the management and Council use.
Style of Operation: The guiding philosophy in doing work at PPZ is to make the zakat payers feel that zakat payment is an ibadah or duty that is easy to perform; that helps to purify their wealth and soul; and can give them a great feeling of satisfaction and relief. PPZ focuses on reaching out to the Muslim community and reminding them of their religious duty. Talks, pamphlets, posters, explanations and reminders through the media or through direct mailing to prospects are some of the methods being used by PPZ. PPZ relies more on educating the Muslim public as opposed to using force or the law. Self awareness is more effective and more appealing to the educated public.
Payer's Preference: Most of the payers prefer to pay zakat in the month of Ramadhan so that they can pay both their zakat mal (zakat on wealth) and zakat fitr (zakat on self); and in the month of January, since a person could get their rebate from income tax payment for that particular year. These 2 months constitute 65% of yearly collections. Normally prayers prefer to come to the zakat counter to pay zakat because they like the act of akad (solemnisation) even though it is not a must. Other would pay through the mail, salary deduction, sending a representative to the zakat center and paying at selected bank counters where major banks in the country have been appointed as agents by the Islamic Council.
Islamic Banking Concepts
Al-Wadiah Yad Dhamanah (savings with guarantee)
Al-Mudharabah (profit-sharing)
Al-Musyarakah (joint venture)
Al-Murabahah (cost plus)
Bai’ Bithaman Ajil (deferred payment sale)
Bai’ al-Dayn (debt trading)
Al-Ijarah Thumma al-Bai’ (leasing and subsequently purchase)
Al-Ijarah (leasing)
Al-Qardhul Hassan (benevolent loan)
Bai’ as-Salam (future delivery)
Bai’ Al-Istijrar (supply contract)
Al-Kafalah (guarantee)
Ar-Rahnu (collateralised borrowing)
Al-Wakalah (nominating another person to act)
Al-Hiwalah (remittance)
As-Sarf (foreign exchange)
Al-Ujr (fee)
Al-Hibah (gift)
List of Financial Institutions Offering Islamic Banking Services
Islamic Banks
1.Bank Islam Malaysia Berhad
2.Bank Muamalat Malaysia Berhad
Commercial Banks
1.Affin Bank Berhad
2.Alliance Bank Malaysia Berhad
3.Arab-Malaysian Bank Berhad
4.Bank Utama (Malaysia) Berhad
5.Citibank Berhad
6.EON Bank Berhad
7.Hong Leong Bank Berhad
8.HSBC Bank Malaysia Berhad
9.Malayan Banking Berhad
10.OCBC Bank (Malaysia) Berhad
11.Public Bank Berhad
12.RHB Bank Berhad
13.Southern Bank Berhad
14.Standard Chartered Bank Malaysia Berhad
Finance Companies
1.Affin-ACF Finance Berhad
2.Alliance Finance Berhad
3.Arab-Malaysian Finance Berhad
4.EON Finance Berhad
Merchant Banks
1.Affin Merchant Bank Berhad
2.Alliance Merchant Bank Berhad
3.Arab-Malaysian Merchant Bank Berhad
4.Aseambankers Malaysia Berhad
5.Malaysian International Merchant Bankers Berhad
Discount Houses
1.Abrar Discounts Berhad
2.Affin Discount Berhad
3.Amanah Short Deposits Berhad
4.CIMB Discount House Berhad
5.KAF Discounts Berhad
6.Malaysia Discount Berhad
7.Mayban Discount Berhad
Islamic Economic
A COMPARISON: The Islamic economic system
Application of Islamic System of Zakat
ISLAMIC BANKING IN MALAYSIA
1. Introduction
A significant development in the Muslim World in the seventies and eighties was the pan-Islamic movement. This movement aimed to revive the glory of Islam and began to demand the application of Shariah in all aspects of life. The effort to establish in Islamic Banking is one manifestation of this movement. The Muslim countries began to rediscover Islam and wanted to mould their economic and financial activities in accordance with Islamic values.
The seventies and eighties of the present century has witnessed the emergence of a number of Islamic banks and financial institutions whose modes of operation are distinct from those of conventional banks. The establishment of these institutions is one of the several manifestations of the 'back to religion' movement which is fast gaining strength in present day muslim societies (quoted in Abulhasan et al. 1991: 155)
The Muslim world has been over-burdened for too long by western modes of social and economic thought. A large portion of the Muslim world had been subjugated culturally, economically and politically by the colonial powers. Even though they have achieved independence from their colonial masters, the colonial principles are still deep rooted in the social, economic, political and cultural life of Muslim communities. Thus, the emergence and expansion of an Islamic banking system is the starting point of a new path breaking change in the Muslim world. It is a process of liberating the Muslims from the yoke of domination by western thought, values and institutions and remodeling their social and economic life in accordance with shariah.
The issue of Riba has long been a problem for Muslims. Even what constituted Riba itself has been a subject under serious discussion. The existence of Riba has been argued to be a major factor for the low participation of the Malays in the economic activities of Malaysia. The establishment of BIMB is a major step towards an interest-free financial system in Malaysia. This marked the establishment of more Islamic commercial institutions under the new mode of the Islamization Policy of Dr. Mahathir Muhammad.
2. The Emergence of Islamic Banks
The elementary concepts of modern Islamic banking date back to the mid 1940s. Models for Islamic banking appeared in the mid-1950s, but comprehensive and detailed concepts for interest-free banking only appeared in the late 1960s. The political environment during that time almost all Muslim countries was hardly favorable for a change in the entire system of banking and finance. In fact, the first experiment in Islamic banking was set up undercover in Mit Ghamr, Egypt in 1963. The model for the experiment was the German Savings bank modified to comply with Islamic principles, i.e. it was barred from charging and paying interest. Nevertheless, the charter of the Bank did not refer to Shariah.
The second Islamic Conference of Foreign Ministers in 1973 adopted a document on the "Institution of an Islamic Bank, Economics and Islamic Doctrines". In 1974, the Islamic Development Bank (IDB) was established as a result of this conference. The member states of the OIC became members of the IDB. The IDB helped to establish a number of Islamic banks in various countries.
Beginning in 1974, several Islamic banks have been established which include: Dubai Islamic Bank in 1975, Faisal Islamic Bank of Sudan in 1977, Faisal Islamic Egyptian Bank and Islamic Bank of Jordan in 1978, Islamic Bank of Bahrain in 1979, the International Islamic Bank of Investment and Development, Luxembourg in 1980 and BIMB in 1983. Today, there are more than a hundred financial institutions which claim to be operating partially or fully on an interest-free basis in 34 countries.
Islamic banking has been adopted at the national level in Pakistan, Sudan, and Iran, and they have decided to Islamize the whole banking system. Iran enacted a new banking law in August 1983 requiring complete abolition of interest by March 1985 (M.N. Siddiqi 1988: 48). Sudan opted for a total change when a presidential decree was issued in 1984, directing all banks to stop dealing with interest. The Central Bank of Sudan, on 10 December 1984, directed all commercial banks to stop dealing with interest with immediate effect, and to negotiate conversion of existing deposit into investment deposits or any other kind of deposits in accordance with shariah. All outstanding interest bearing advances were either to be settled through repayment or they had to be converted into one of the Islamic modes of financing. Foreign transactions were to continue on the basis of interest till an alternative way as available.
3. The Theory of Islamic Banking
3.1 Economic Impact of Interest
At the outset, the most important departure of Islamic banking from conventional banking is the prohibition of Riba, and promoting Profit and Loss Sharing (PLS) as an alternative to Riba. The prohibition of interest is obvious in the Quran as well as in the Sunnah. Riba originally meant 'increase and growth'. This meaning is taken from the Quran (22:5). Increase means the increase over capital or nominal amount, the increase being either large or small. According to Islamic law, Riba technically refers to the premium that must be paid by the borrower to the lender along with the principal amount as a condition for an extension in its maturity. In 1992, the Pakistan Federal Shariah Court ruled that:
It makes no difference whether the loan is for consumption purpose or for commercial purposes. It does not matter if the rate of interest is low or high, simple or compound for short or long times, between the two Muslims or between a citizen and a state or between two states. Any excess which is pre-determined over the principal sum in a loan transaction will constitute Riba in all circumstances (quoted in K. Zaheed 1994: 83)
This immediately leads us to the essence of Islamic banking; an Islamic bank is a financial institution that conducts its operations in accordance with Shariah principles. If we have to contrast the Islamic bank to an existing conventional bank, we may say that while the latter earns the major portion of its revenues and expenses on the basis of interest, the former earns the same on the profits. In the operation of an Islamic bank, profits therefore assume the place of interest in a conventional bank. 'Usury', the original name for modern interest.
BANK ISLAM MALAYSIA BERHAD (BIMB)
BIMB was established after the enacting of the Islamic Banking Act (IBA) in 1983, the IBA permitted the establishment of the first Islamic Bank in Malaysia. BIMB with a paid up capital of RM 100 million and an authorised capital of RM 500 million is carrying out its activities on an interest free basis. Tengku Razaleigh , the then Finance Minister described the Islamic bank as the:
First step in the government's efforts to instill Islamic values into the country's economic and financial systems as a replacement for the current Western-base economic system (NST 6 July 1982)
Takaful Malaysia
Syarikat Takaful Malaysia Berhad was incorporated on 29 November 1984, has an authorised capital of RM 500 million and a paid up capital of RM 55 million. It has been converted into a public quoted company with the listing of its shares on the Main Board of the Kuala Lumpur Stock Exchange since 31 July 1996. As a subsidiary company of BIMB Holdings Berhad, 65.5% of its equity is held by the BIMB.
Other major shareholders are the State Islamic Religious Councils / Baitulmals of Terengganu, Pahang, Negeri Sembilan and Amanah Saham Bank Islam (ASBI).
The company objectives is to provide takaful services (Islamic Insurance) at the highest standard of efficiency and professionalism to all Muslims and the population in Malaysia.
Lembaga Tabung Haji (Pilgrims Fund Board)
In line with the concept of Islam as Ad-deen, a way of life in this world and the Hereafter, every ibadah commanded by Allah S.W.T. is of benefit in this and the next world. To fulfill this desire to perform the Hajj pilgrimage, Muslims have to find enough money for the journey to the Holy Land. To avoid riba' (usury), which is haram (forbidden) in Islam, Muslims resort to various traditional methods of saving. Of course, there are those who dispose their animals or inherited properties for cash to cover their Hajj expenses, a practice which ultimately imposes economic burden on themselves and their families while they are on the pilgrimage or when they return from the pilgrimage. Such practice also does not augur well for the rural economy, besides retarding the country’s economic growth.
Realising this as well as to help Muslims to save enough money without involving in activities deemed haram in Islam, Perbadanan Wang Simpanan Bakal-Bakal Haji was set up in November 1962, and began its operation on 30 September 1963. The corporation to manage the savings of Muslims, intending to perform the Hajj pilgrimage, was the result of a working paper entitled "Rancangan Membaiki Ekonomi Bakal-Bakal Haji" presented by Royal Professor Ungku Aziz in 1959 to improve the economy of intending pilgrims.
Objectives:
Enable Muslims to gradually save enough money to meet the cost of performing the Hajj or other beneficial expenses; Enable Muslims, through the use of their savings, to take active part in capital investment in a way, halal to Islam, and Provide protection, supervision and welfare to Hajj pilgrims.
Pusat Pungutan Zakat (Zakat Collection Center)
Established by The Federal Territory Islamic Council, Kuala Lumpur (known as MAIWP). It started its operations in 1991. PPZ uses a corporate style of management through the setting up by the Council of a company called Hartasuci Sdn. Bhd. which is placed under a foundation called Yayasan Taqwa Wilayah Persekutuan Berhad controlled by the Council. PPZ's basic responsibility is to collect zakat for the Council. It is not responsible for zakat distribution which is done by other agencies/sections of the Council.
Organization Structure Externally, PPZ is placed under the foundation which is responsible to the Council. Internally, PPZ has a Board of Directors which supervises management headed by a General Manager. There are two divisions, namely the Operations Division (headed by a Manager), and the Finance & Administration Division. Each division in turn has various functional units. Basic functions of PPZ :
To explain to the public about zakat and the responsibility of paying zakat. To help payers, both individuals and companies, calculate their zakat. To collect zakat and to increase the collection, both in terms of amount and payers.
All Collection is immediately bank-in into the Baitulmal account (of the Federal Territory Islamic Council). Apart from the above mentioned responsibilities PPZ is also responsible in producing daily, monthly, quarterly and yearly reports, both for the management and Council use.
Style of Operation: The guiding philosophy in doing work at PPZ is to make the zakat payers feel that zakat payment is an ibadah or duty that is easy to perform; that helps to purify their wealth and soul; and can give them a great feeling of satisfaction and relief. PPZ focuses on reaching out to the Muslim community and reminding them of their religious duty. Talks, pamphlets, posters, explanations and reminders through the media or through direct mailing to prospects are some of the methods being used by PPZ. PPZ relies more on educating the Muslim public as opposed to using force or the law. Self awareness is more effective and more appealing to the educated public.
Payer's Preference: Most of the payers prefer to pay zakat in the month of Ramadhan so that they can pay both their zakat mal (zakat on wealth) and zakat fitr (zakat on self); and in the month of January, since a person could get their rebate from income tax payment for that particular year. These 2 months constitute 65% of yearly collections. Normally prayers prefer to come to the zakat counter to pay zakat because they like the act of akad (solemnisation) even though it is not a must. Other would pay through the mail, salary deduction, sending a representative to the zakat center and paying at selected bank counters where major banks in the country have been appointed as agents by the Islamic Council.
Islamic Banking Concepts
Al-Wadiah Yad Dhamanah (savings with guarantee)
Al-Mudharabah (profit-sharing)
Al-Musyarakah (joint venture)
Al-Murabahah (cost plus)
Bai’ Bithaman Ajil (deferred payment sale)
Bai’ al-Dayn (debt trading)
Al-Ijarah Thumma al-Bai’ (leasing and subsequently purchase)
Al-Ijarah (leasing)
Al-Qardhul Hassan (benevolent loan)
Bai’ as-Salam (future delivery)
Bai’ Al-Istijrar (supply contract)
Al-Kafalah (guarantee)
Ar-Rahnu (collateralised borrowing)
Al-Wakalah (nominating another person to act)
Al-Hiwalah (remittance)
As-Sarf (foreign exchange)
Al-Ujr (fee)
Al-Hibah (gift)
List of Financial Institutions Offering Islamic Banking Services
Islamic Banks
1.Bank Islam Malaysia Berhad
2.Bank Muamalat Malaysia Berhad
Commercial Banks
1.Affin Bank Berhad
2.Alliance Bank Malaysia Berhad
3.Arab-Malaysian Bank Berhad
4.Bank Utama (Malaysia) Berhad
5.Citibank Berhad
6.EON Bank Berhad
7.Hong Leong Bank Berhad
8.HSBC Bank Malaysia Berhad
9.Malayan Banking Berhad
10.OCBC Bank (Malaysia) Berhad
11.Public Bank Berhad
12.RHB Bank Berhad
13.Southern Bank Berhad
14.Standard Chartered Bank Malaysia Berhad
Finance Companies
1.Affin-ACF Finance Berhad
2.Alliance Finance Berhad
3.Arab-Malaysian Finance Berhad
4.EON Finance Berhad
Merchant Banks
1.Affin Merchant Bank Berhad
2.Alliance Merchant Bank Berhad
3.Arab-Malaysian Merchant Bank Berhad
4.Aseambankers Malaysia Berhad
5.Malaysian International Merchant Bankers Berhad
Discount Houses
1.Abrar Discounts Berhad
2.Affin Discount Berhad
3.Amanah Short Deposits Berhad
4.CIMB Discount House Berhad
5.KAF Discounts Berhad
6.Malaysia Discount Berhad
7.Mayban Discount Berhad
Islamic Economic
A COMPARISON: The Islamic economic system
Application of Islamic System of Zakat
Saturday, August 15, 2009
What makes a global financial centre?
Saturday August 15, 2009
What makes a global financial centre?
Think Asian by ANDREW SHENG
We grow up thinking the world is balanced – that good cancels out evil, that assets equal liabilities, that life is a simple bell-shaped curve.
But it is not. There is a lot of inequality around. We like buying, but we do not sell that often, except if forced to.
Risks in the financial world are like that. George Soros recently pointed out a simple fact that I had taken for granted, but realised that common sense is not common. The reason why financial markets are dangerous is because the risks of going long (buying only but not selling) is not the same as going short (selling or borrowing what you do not have).
If you buy anything and the price goes to zero, all you lose is your asset. However, if you borrow or you short a product, you can lose not only everything you have but owe far more than you realise.
This was the common sense that AIG failed to appreciate. If you insure cars or life, you are working with the law of large numbers. As long as your premium covers the estimated losses, you are still making money.
But if you insure banks (which are highly leveraged institutions) or borrowers, which is what the derivative trading subsidiary of AIG did in London, the losses are amplified by the embedded derivatives.
Imagine anyone trying to insure the recent global bank losses of nearly US$3 trillion.
The banks lost a lot because they are highly leveraged institutions.
The lower the price of assets that they hold, the more they became bankrupt.
So AIG needed more than US$180bil to bail out, compared with the initial request for funding of only US$10bil.
This brings us back to the use of domestic currency as international reserve currency. When a domestic currency is circulating only within its own country, it is one citizen lending to another.
The left hand is borrowing from the right hand. If someone does not pay his debt, there are laws to protect the lender and even if the corporate sector overborrowed and collapsed, the state can intervene by either nationalising the debt or taxing the rest of the population to pay for the losses.
In the 19th century, Asians have not forgotten that foreign debt was enforced through gunboats and also military invasion.
So, it does not pay to owe foreign debt too much, because a central bank cannot print foreign currency. So why should a country want its currency to be an international reserve currency? There are two basic reasons.
The first is seigniorage, which is the fact that anyone who issues currency is actually borrowing money without interest.
All central banks earn seigniorage from the currency issue. In a sense, it is the premium citizens pay to the central bank for safeguarding the value of their currency.
Therefore, the country that issues a global reserve currency enjoys seigniorage from foreigners who hold its currency. This amount can be very large indeed, as the United States clearly is in that position.
But the actual benefits received for trade and commercial services when the currency is the reserve standard are larger.
In the days of the British Empire, London benefited hugely from being the financial centre for sterling, as well as the trading centre for commodities, international loans and related legal and commercial services.
Although sterling lost its role as a major reserve currency to the US dollar, London became the centre for the offshore eurodollar market and also an important complement to New York.
The biggest commercial banks, brokers, fund managers and insurance companies were located in both London and New York, because they shared the same language, common law and also similar business practices.
So what makes an international financial centre? After working in Hong Kong, I finally understood that an international financial centre must satisfy three basic conditions – it must protect property rights, it must have lower transaction costs and thirdly, it must have high transparency.
The first condition is obvious and yet not so obvious. Most Western economists say that London and New York have superior property rights because they have well accepted common law and excellent and fair judiciary.
But protection of property rights is more than just laws and enforcement.
Protection of property rights means also political stability, the absence of nationalisation, predatory taxation and the power of a strong military.
To put it bluntly, no successful international financial centre operates in a war zone or a banana republic.
The second condition of low transaction costs is very important.
No financial centre will succeed if it is not convenient to do business with low regulatory costs, with good communications infrastructure. The best financial centres have excellent telecommunication, transport and living conditions.
Transaction costs are also associated with geography.
It is no coincidence that New York dominates in the American time zone and London dominates in the European and African time zone. Asia has no dominant financial centre for reasons that I will discuss later.
The third condition is high transparency, because markets thrive on information. If information is not accurate, timely and accessible, investors do not know how to protect their funds and make good decisions.
Next, I shall look at why Japan failed to make yen a dominant global reserve currency.
Andrew Sheng is adjunct professor at Tsinghua University, Beijing and Malaya Universiti. He was formerly the chairman of the Securities and Futures Commission, Hong Kong.
What makes a global financial centre?
Think Asian by ANDREW SHENG
We grow up thinking the world is balanced – that good cancels out evil, that assets equal liabilities, that life is a simple bell-shaped curve.
But it is not. There is a lot of inequality around. We like buying, but we do not sell that often, except if forced to.
Risks in the financial world are like that. George Soros recently pointed out a simple fact that I had taken for granted, but realised that common sense is not common. The reason why financial markets are dangerous is because the risks of going long (buying only but not selling) is not the same as going short (selling or borrowing what you do not have).
If you buy anything and the price goes to zero, all you lose is your asset. However, if you borrow or you short a product, you can lose not only everything you have but owe far more than you realise.
This was the common sense that AIG failed to appreciate. If you insure cars or life, you are working with the law of large numbers. As long as your premium covers the estimated losses, you are still making money.
But if you insure banks (which are highly leveraged institutions) or borrowers, which is what the derivative trading subsidiary of AIG did in London, the losses are amplified by the embedded derivatives.
Imagine anyone trying to insure the recent global bank losses of nearly US$3 trillion.
The banks lost a lot because they are highly leveraged institutions.
The lower the price of assets that they hold, the more they became bankrupt.
So AIG needed more than US$180bil to bail out, compared with the initial request for funding of only US$10bil.
This brings us back to the use of domestic currency as international reserve currency. When a domestic currency is circulating only within its own country, it is one citizen lending to another.
The left hand is borrowing from the right hand. If someone does not pay his debt, there are laws to protect the lender and even if the corporate sector overborrowed and collapsed, the state can intervene by either nationalising the debt or taxing the rest of the population to pay for the losses.
In the 19th century, Asians have not forgotten that foreign debt was enforced through gunboats and also military invasion.
So, it does not pay to owe foreign debt too much, because a central bank cannot print foreign currency. So why should a country want its currency to be an international reserve currency? There are two basic reasons.
The first is seigniorage, which is the fact that anyone who issues currency is actually borrowing money without interest.
All central banks earn seigniorage from the currency issue. In a sense, it is the premium citizens pay to the central bank for safeguarding the value of their currency.
Therefore, the country that issues a global reserve currency enjoys seigniorage from foreigners who hold its currency. This amount can be very large indeed, as the United States clearly is in that position.
But the actual benefits received for trade and commercial services when the currency is the reserve standard are larger.
In the days of the British Empire, London benefited hugely from being the financial centre for sterling, as well as the trading centre for commodities, international loans and related legal and commercial services.
Although sterling lost its role as a major reserve currency to the US dollar, London became the centre for the offshore eurodollar market and also an important complement to New York.
The biggest commercial banks, brokers, fund managers and insurance companies were located in both London and New York, because they shared the same language, common law and also similar business practices.
So what makes an international financial centre? After working in Hong Kong, I finally understood that an international financial centre must satisfy three basic conditions – it must protect property rights, it must have lower transaction costs and thirdly, it must have high transparency.
The first condition is obvious and yet not so obvious. Most Western economists say that London and New York have superior property rights because they have well accepted common law and excellent and fair judiciary.
But protection of property rights is more than just laws and enforcement.
Protection of property rights means also political stability, the absence of nationalisation, predatory taxation and the power of a strong military.
To put it bluntly, no successful international financial centre operates in a war zone or a banana republic.
The second condition of low transaction costs is very important.
No financial centre will succeed if it is not convenient to do business with low regulatory costs, with good communications infrastructure. The best financial centres have excellent telecommunication, transport and living conditions.
Transaction costs are also associated with geography.
It is no coincidence that New York dominates in the American time zone and London dominates in the European and African time zone. Asia has no dominant financial centre for reasons that I will discuss later.
The third condition is high transparency, because markets thrive on information. If information is not accurate, timely and accessible, investors do not know how to protect their funds and make good decisions.
Next, I shall look at why Japan failed to make yen a dominant global reserve currency.
Andrew Sheng is adjunct professor at Tsinghua University, Beijing and Malaya Universiti. He was formerly the chairman of the Securities and Futures Commission, Hong Kong.
Appeal of Islamic banking
Saturday August 8, 2009
Appeal of Islamic banking
By YVONNE TAN and LAALITHA HUNT
Foreign banks in Malaysia are developing innovative products and services to tap the growing market.
The next phase of growth in the foreign banking space would likely be the Islamic banking sector, according to most industry players.
Already foreign banks in Malaysia are stepping up efforts to position themselves well for this purpose.
Many have and are continuing to develop innovative products and services to tap the growing Islamic finance market, which they say is demonstrating encouraging growth despite the challenging financial environment.
According to HSBC Bank Malaysia Bhd deputy chairman and chief executive officer Irene Dorner, the bank’s new Islamic subsidiary, HSBC Amanah Malaysia, was progressing as planned and was well-positioned to capitalise on the growth of Islamic finance in Malaysia.
“Our strategy is to position and place the business on a strong footing through the introduction of new, innovative core products and drawing resources from a pool of Islamic finance expertise (locally and globally),” she says.
HSBC has opened four new full-fledged HSBC Amanah branches and there are plans for more such branches in the future.
“We will continue to invest in these uncertain times as we believe that the Islamic business has vast potential, going forward,” she adds.
HSBC, which has conventional, takaful and more recently Islamic banking licences, would continue to focus on its bancassurance/bancatakaful model with its own customers as the target market.
“Bancassurance or bancatakaful is an efficient and convenient way for individuals to purchase their insurance or takaful products by dealing with an organisation that they already trust with their financial well-being. In the current economic climate, trust is a key consideration factor,” Dorner says.
She says HSBC, with its international brand name, is one of top 10 global insurers (by profits of US$2.6bil in 2008), and has 125 years of banking presence in Malaysia.
“Our customers’ needs remain the key driver of our business and we are committed to developing campaigns that will help give our customers added value during these challenging times,” she says.
She notes that there is a possibility of slower take-up from retail and corporate customers as many businesses are seen to be putting on hold their expansion plans while consumers are cutting back on their spending until the economic outlook improves.
Dorner also points out that the bank would focus on non-financial issues considered material to businesses such as sustainable practices as well as attention to ethical and social issues.
“Going forward, I believe that customers would demand banks to focus on these issues too as they become more sophisticated. In fact, the current global economic and financial crisis has brought the wider challenges of what it means to be a sustainable business into sharper focus,” Dorner says.
Citibank Bhd chief executive officer Sanjeev Nanavati says the banking group has in place a dynamic team to develop innovative products and services to tap the growing Islamic finance market.
Citibank, which was the first to introduce globally accepted syariah products, was also the first to introduce Islamic off-balance sheet property backed transactions as a means of financing.
In 2006, Citibank launched the first index that measures the performance of global bonds complying with Islamic investment guidelines, known as Dow Jones Citigroup Index.
“The launch of the index was our strategy to offer Islamic issuers and investors world-class and innovative products that would contribute to expanding the frontiers of Islamic capital markets,” Sanjeev says.
As for OCBC Bank (M) Bhd, its director and chief executive officer Jeffrey Chew says the bank offers Islamic banking services via OCBC Al-Amin.
“Our Islamic banking subsidiary, OCBC Al-Amin, will spearhead the group’s Islamic banking initiatives on various fronts,” Chew says.
The bank is looking to launch more products so as to provide full-fledged financial services to the community in this regard.
“We are the first foreign Islamic bank to offer a full range of trade finance services to our business banking customers, especially small and medium enterprises,” he says.
The bank would, in the future, work to introduce syariah-based products instead of merely syariah-compliant ones, he says.
“In so doing, we aim to create a differentiated value proposition on which OCBC Al-Amin would compete locally and regionally,” Chew enthuses.
With a combined pre-tax profit of RM1.2bil for 2008 from the Malaysian operations, OCBC’s combined presence in Malaysia is significant, he notes.
Describing the present times as “exciting and challenging” for foreign banks in Malaysia, he says OCBC’s long-term vision is to provide complete financial solutions to businesses and individuals across communities in Malaysia.
“The recently announced financial liberalisation initiatives really represent a window of opportunity for foreign banks such as OCBC Bank, which like any local financial institution is very much entrenched in Malaysia, having been around for almost a century now,” Chew says.
United Overseas Bank (M) Bhd has a slightly different take on positioning itself for the future.
“We will concentrate on traditional banking, providing financing and transaction banking services to cater to our customers’ needs,“ CEO and director Chan Kok Seong says.
The bank would also continue to leverage on its niche market position to grow its consumer and small and medium enterprises businesses, Chan says.
“The UOB group already has a strong foothold in Asia and over the next two years, we will focus on strengthening our position as a regional bank.
“We envision to be one of the top three foreign banks in the country, in line with the group’s mission to be a premier bank in the Asia-Pacific region,” he adds.
Chan feels that with large foreign banks and Islamic banks coming onstream as a result of the central bank’s liberalisation initiatives, the local banking industry will become more crowded in the future.
“Inevitably, competition will become more intense, resulting in margin compression,” he notes.
He points out that while increased competition will help raise the efficiency levels at banks, priming them to compete on the international stage, there is the possibility that some weaker domestic banks would eventually be taken over or merged with stronger ones.
“At present, there is no urgent need for banks in Malaysia to further consolidate,” Chan says.
He says UOB is well-positioned to capitalise on the developments in the Asian region, especially in China and India – the new economic powerhouses that are set to lift Asian economies from their present doldrums.
“We are well positioned because of our Asian presence and we have processes in place to serve the growing middle-class base as well as provide the basic banking needs of emerging industrial and services sectors,” Chan says.
The UOB group currently enjoys strong presence in Singapore, Malaysia, Thailand and Indonesia.
Appeal of Islamic banking
By YVONNE TAN and LAALITHA HUNT
Foreign banks in Malaysia are developing innovative products and services to tap the growing market.
The next phase of growth in the foreign banking space would likely be the Islamic banking sector, according to most industry players.
Already foreign banks in Malaysia are stepping up efforts to position themselves well for this purpose.
Many have and are continuing to develop innovative products and services to tap the growing Islamic finance market, which they say is demonstrating encouraging growth despite the challenging financial environment.
According to HSBC Bank Malaysia Bhd deputy chairman and chief executive officer Irene Dorner, the bank’s new Islamic subsidiary, HSBC Amanah Malaysia, was progressing as planned and was well-positioned to capitalise on the growth of Islamic finance in Malaysia.
“Our strategy is to position and place the business on a strong footing through the introduction of new, innovative core products and drawing resources from a pool of Islamic finance expertise (locally and globally),” she says.
HSBC has opened four new full-fledged HSBC Amanah branches and there are plans for more such branches in the future.
“We will continue to invest in these uncertain times as we believe that the Islamic business has vast potential, going forward,” she adds.
HSBC, which has conventional, takaful and more recently Islamic banking licences, would continue to focus on its bancassurance/bancatakaful model with its own customers as the target market.
“Bancassurance or bancatakaful is an efficient and convenient way for individuals to purchase their insurance or takaful products by dealing with an organisation that they already trust with their financial well-being. In the current economic climate, trust is a key consideration factor,” Dorner says.
She says HSBC, with its international brand name, is one of top 10 global insurers (by profits of US$2.6bil in 2008), and has 125 years of banking presence in Malaysia.
“Our customers’ needs remain the key driver of our business and we are committed to developing campaigns that will help give our customers added value during these challenging times,” she says.
She notes that there is a possibility of slower take-up from retail and corporate customers as many businesses are seen to be putting on hold their expansion plans while consumers are cutting back on their spending until the economic outlook improves.
Dorner also points out that the bank would focus on non-financial issues considered material to businesses such as sustainable practices as well as attention to ethical and social issues.
“Going forward, I believe that customers would demand banks to focus on these issues too as they become more sophisticated. In fact, the current global economic and financial crisis has brought the wider challenges of what it means to be a sustainable business into sharper focus,” Dorner says.
Citibank Bhd chief executive officer Sanjeev Nanavati says the banking group has in place a dynamic team to develop innovative products and services to tap the growing Islamic finance market.
Citibank, which was the first to introduce globally accepted syariah products, was also the first to introduce Islamic off-balance sheet property backed transactions as a means of financing.
In 2006, Citibank launched the first index that measures the performance of global bonds complying with Islamic investment guidelines, known as Dow Jones Citigroup Index.
“The launch of the index was our strategy to offer Islamic issuers and investors world-class and innovative products that would contribute to expanding the frontiers of Islamic capital markets,” Sanjeev says.
As for OCBC Bank (M) Bhd, its director and chief executive officer Jeffrey Chew says the bank offers Islamic banking services via OCBC Al-Amin.
“Our Islamic banking subsidiary, OCBC Al-Amin, will spearhead the group’s Islamic banking initiatives on various fronts,” Chew says.
The bank is looking to launch more products so as to provide full-fledged financial services to the community in this regard.
“We are the first foreign Islamic bank to offer a full range of trade finance services to our business banking customers, especially small and medium enterprises,” he says.
The bank would, in the future, work to introduce syariah-based products instead of merely syariah-compliant ones, he says.
“In so doing, we aim to create a differentiated value proposition on which OCBC Al-Amin would compete locally and regionally,” Chew enthuses.
With a combined pre-tax profit of RM1.2bil for 2008 from the Malaysian operations, OCBC’s combined presence in Malaysia is significant, he notes.
Describing the present times as “exciting and challenging” for foreign banks in Malaysia, he says OCBC’s long-term vision is to provide complete financial solutions to businesses and individuals across communities in Malaysia.
“The recently announced financial liberalisation initiatives really represent a window of opportunity for foreign banks such as OCBC Bank, which like any local financial institution is very much entrenched in Malaysia, having been around for almost a century now,” Chew says.
United Overseas Bank (M) Bhd has a slightly different take on positioning itself for the future.
“We will concentrate on traditional banking, providing financing and transaction banking services to cater to our customers’ needs,“ CEO and director Chan Kok Seong says.
The bank would also continue to leverage on its niche market position to grow its consumer and small and medium enterprises businesses, Chan says.
“The UOB group already has a strong foothold in Asia and over the next two years, we will focus on strengthening our position as a regional bank.
“We envision to be one of the top three foreign banks in the country, in line with the group’s mission to be a premier bank in the Asia-Pacific region,” he adds.
Chan feels that with large foreign banks and Islamic banks coming onstream as a result of the central bank’s liberalisation initiatives, the local banking industry will become more crowded in the future.
“Inevitably, competition will become more intense, resulting in margin compression,” he notes.
He points out that while increased competition will help raise the efficiency levels at banks, priming them to compete on the international stage, there is the possibility that some weaker domestic banks would eventually be taken over or merged with stronger ones.
“At present, there is no urgent need for banks in Malaysia to further consolidate,” Chan says.
He says UOB is well-positioned to capitalise on the developments in the Asian region, especially in China and India – the new economic powerhouses that are set to lift Asian economies from their present doldrums.
“We are well positioned because of our Asian presence and we have processes in place to serve the growing middle-class base as well as provide the basic banking needs of emerging industrial and services sectors,” Chan says.
The UOB group currently enjoys strong presence in Singapore, Malaysia, Thailand and Indonesia.
Wednesday, August 12, 2009
IDB EXPERTS DISCUSS GOLD DINAR CURRENCY MECHANISM
SAUDI ARABIA: IDB EXPERTS DISCUSS GOLD DINAR CURRENCY MECHANISM.(Brief Article)
IPR Strategic Business Information Database | September 9, 2003 | COPYRIGHT 2003 Info-Prod (Middle East) Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information) Copyright
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According to IINA, experts are meeting at the headquarters of the Jeddah-based Islamic Development Bank (IDB) to discuss the mechanism needed to launch the Islamic gold Dinar. The experts are drawn from a number of member countries, and Malaysia initiated the idea of using the Dinar for trade exchanges between member countries. The inaugural session of the meeting was addressed by ...
Read all of this article with a FREE trial to HighBeam Research
IPR Strategic Business Information Database | September 9, 2003 | COPYRIGHT 2003 Info-Prod (Middle East) Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information) Copyright
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www.Forex.com
Forex E Currency Exchange
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www.Easy-Forex.com
Trade Currencies Online
Limited risk with free software free currency rates and charts
www.gcitrading.com
According to IINA, experts are meeting at the headquarters of the Jeddah-based Islamic Development Bank (IDB) to discuss the mechanism needed to launch the Islamic gold Dinar. The experts are drawn from a number of member countries, and Malaysia initiated the idea of using the Dinar for trade exchanges between member countries. The inaugural session of the meeting was addressed by ...
Read all of this article with a FREE trial to HighBeam Research
IGD Practice Sdn. Bhd
Signing Ceremony between Artel Trud Closed Joint - Stock, Altyn Alymak Closed Joint-Stock and IGD Practice Sdn. Bhd., Mandarin Oriental Hotel, Kuala Lumpur
Friday, August 20, 2004
Congratulations on the tie-up between the companies in a venture, involving the extraction of gold and the operating of the Islamic Gold Dinar exchange, and the promotion of the use of the gold Dinar in international trading and in the payment of zakat and dowry.
This venture involving Malaysian and Kazakhstan companies reflects opportunities which can be exploited by the business sectors of Malaysia and Kazakhstan. At the moment, the framework has been established, for promoting cross-border economic activities between the two countries e.g.
Trade Agreement signed in 1996
Investment Guarantee Agreement signed in 1996
Economic / Scientific Agreement and Technical Agreement signed in 1996
Air Services Agreement in 1996
To strengthen the framework for bilateral economic cooperation, the two countries have already concluded negotiations on an agreement for the Avoidance of Double Taxation, while reciprocal visa arrangements, are being negotiated.
With the expected commencement of direct flights, from Almaty to Kuala Lumpur, towards the end of January 2004, there would be direct access to each others economies and markets, for the business communities, in particular, and for the public at large.
Already, bilateral Joint Trade Committees have been established, to facilitate trade and investment flows, as well as, to address constraints faced, by the business communities of both countries.
The regional economic crisis which was triggered by the currency speculation, which severely devalued the regional currencies, have clearly shown how a laissez-faire, unbridled currency trading, fuelled by purely speculative objectives, have created massive dislocations, to economies in the region.
Currencies no longer merely serve as the standard of value, or the medium of exchange, for trade, but currencies have been treated as a trade commodity in themselves, their values not being determined by the strengths of the economies, or the countries themselves, but by what the traders of currency, and the speculators think fit at any one point of time.
In addition, the values of major currencies have been, and certainly will continue to be fixed, not just by the market, but also by policy decision amongst the economic majors.
It cannot be denied that there exist significant uncertainties, and non-predictability, with regards to currencies, which are allowed to be traded in the open market, and these uncertainties and volatilities have impacted and will continue to impact, upon the economies of the individual countries.
Trading and trading margins are affected by shifts in exchange rates, and during times of volatile currency fluctuations, even hedging against such volatilities do not help. In fact, during the regional crisis, businesses lost money on the hedging itself, due to the severe distortions in currency values.
The crisis had eventually resulted, in a re-thinking of the prevailing world monetary system and there was much discussion on the establishment of the so called "new world financial architecture", and, to address the issue of currency speculation. However, nothing significant has materialized to this date.
Malaysia has taken various steps to insulate its economy from the impact of unbridled currency speculation, the major step being, the pegging of the Ringgit to the US Dollar.
This has resulted in the environment of certainty, and predictability, for business and trade, and has enabled business to plan over the longer term, without having to factor in currency exchange volatility.
But still, the US Dollar continues to be the reference, and, as in many other trading economies, trade continues to be denominated in the US Dollar.
Malaysia has, additionally, negotiated arrangements, such as the Trading Account, with individual trading partners, in order to enable bilateral payments on trade, to be settled in the respective national currencies, and thereby reducing the need to use hard currencies, such as the US Dollar, to settle accounts.
But the most recent move by Malaysia is to encourage the use of gold as an effective medium of exchange and in particular, the use of the Gold Dinar.
Clearly, IGD Practice has been established, to effect this alternative approach, by promoting the use of the Gold Dinar in international trading, as well as, in private business and other transactions.
Certainly this is a laudable venture, particularly with the synergy provided by the direct link between gold mining and extraction, and the operations of the Gold Dinar economy.
What is important is the educative process, that must be undertaken, to enable the public, and the business community, to really understand, the mechanisms involved, and the benefits of using gold, as a medium of exchange and a store of value, and of referring to a gold standard.
Although the use of gold had been the main feature of trade and business in history, exposure to the use of paper currency, and the subsequent monetary and trade payment systems, have all but erased, any use of gold as a trade settlement mechanism.
But gold reserves are still an important element in the treasuries of world economies.
The task is now to bring back gold into the trading system, as a safer alternative to current trade settlement, and to minimize currency volatilities.
It is hoped that companies such as IGD Practice will place emphasis upon the educative process, in order that there will be a wide market outreach, and acceptance of the use of gold and gold Dinar in the economy and in trade.
Friday, August 20, 2004
Congratulations on the tie-up between the companies in a venture, involving the extraction of gold and the operating of the Islamic Gold Dinar exchange, and the promotion of the use of the gold Dinar in international trading and in the payment of zakat and dowry.
This venture involving Malaysian and Kazakhstan companies reflects opportunities which can be exploited by the business sectors of Malaysia and Kazakhstan. At the moment, the framework has been established, for promoting cross-border economic activities between the two countries e.g.
Trade Agreement signed in 1996
Investment Guarantee Agreement signed in 1996
Economic / Scientific Agreement and Technical Agreement signed in 1996
Air Services Agreement in 1996
To strengthen the framework for bilateral economic cooperation, the two countries have already concluded negotiations on an agreement for the Avoidance of Double Taxation, while reciprocal visa arrangements, are being negotiated.
With the expected commencement of direct flights, from Almaty to Kuala Lumpur, towards the end of January 2004, there would be direct access to each others economies and markets, for the business communities, in particular, and for the public at large.
Already, bilateral Joint Trade Committees have been established, to facilitate trade and investment flows, as well as, to address constraints faced, by the business communities of both countries.
The regional economic crisis which was triggered by the currency speculation, which severely devalued the regional currencies, have clearly shown how a laissez-faire, unbridled currency trading, fuelled by purely speculative objectives, have created massive dislocations, to economies in the region.
Currencies no longer merely serve as the standard of value, or the medium of exchange, for trade, but currencies have been treated as a trade commodity in themselves, their values not being determined by the strengths of the economies, or the countries themselves, but by what the traders of currency, and the speculators think fit at any one point of time.
In addition, the values of major currencies have been, and certainly will continue to be fixed, not just by the market, but also by policy decision amongst the economic majors.
It cannot be denied that there exist significant uncertainties, and non-predictability, with regards to currencies, which are allowed to be traded in the open market, and these uncertainties and volatilities have impacted and will continue to impact, upon the economies of the individual countries.
Trading and trading margins are affected by shifts in exchange rates, and during times of volatile currency fluctuations, even hedging against such volatilities do not help. In fact, during the regional crisis, businesses lost money on the hedging itself, due to the severe distortions in currency values.
The crisis had eventually resulted, in a re-thinking of the prevailing world monetary system and there was much discussion on the establishment of the so called "new world financial architecture", and, to address the issue of currency speculation. However, nothing significant has materialized to this date.
Malaysia has taken various steps to insulate its economy from the impact of unbridled currency speculation, the major step being, the pegging of the Ringgit to the US Dollar.
This has resulted in the environment of certainty, and predictability, for business and trade, and has enabled business to plan over the longer term, without having to factor in currency exchange volatility.
But still, the US Dollar continues to be the reference, and, as in many other trading economies, trade continues to be denominated in the US Dollar.
Malaysia has, additionally, negotiated arrangements, such as the Trading Account, with individual trading partners, in order to enable bilateral payments on trade, to be settled in the respective national currencies, and thereby reducing the need to use hard currencies, such as the US Dollar, to settle accounts.
But the most recent move by Malaysia is to encourage the use of gold as an effective medium of exchange and in particular, the use of the Gold Dinar.
Clearly, IGD Practice has been established, to effect this alternative approach, by promoting the use of the Gold Dinar in international trading, as well as, in private business and other transactions.
Certainly this is a laudable venture, particularly with the synergy provided by the direct link between gold mining and extraction, and the operations of the Gold Dinar economy.
What is important is the educative process, that must be undertaken, to enable the public, and the business community, to really understand, the mechanisms involved, and the benefits of using gold, as a medium of exchange and a store of value, and of referring to a gold standard.
Although the use of gold had been the main feature of trade and business in history, exposure to the use of paper currency, and the subsequent monetary and trade payment systems, have all but erased, any use of gold as a trade settlement mechanism.
But gold reserves are still an important element in the treasuries of world economies.
The task is now to bring back gold into the trading system, as a safer alternative to current trade settlement, and to minimize currency volatilities.
It is hoped that companies such as IGD Practice will place emphasis upon the educative process, in order that there will be a wide market outreach, and acceptance of the use of gold and gold Dinar in the economy and in trade.
Tuesday, August 11, 2009
The Burnei Times (http://www.bruneitimes.com.bn/section/opinion/19Dec2006-3.php)
Dollar has fallen, when is gold-Dinar coming
Dzikrullah W Pramudya
19-Dec-06
...
Now, the dollar has fallen. Why hasn't the gold-Dinar emerged yet, the way Mahathir and many other people have wished?
An answer came from Jakarta-based Dinar Club President, Muhaimin Iqbal, who is also CEO of the oldest insurance company in Indonesia ...
The important element that is still missing, said Iqbal, is the niyat or the political will of the sharia banking and the governments.
Iqbal specifically suggested that the wisest investment step for Bruneians, following the fall of the dollar (which will continue to fall, according to Greenspan's prediction), would be to keep their wealth in gold-Dinar. An alternative for the Dinar currency, Iqbal said, would be to have the Pure Gold Bullion.
Iqbal said, however, that the gold-Dinar is not even the ultimate aim ....
//////////////////////////////////
////////////////
////
:D
oneness
the apostle dean
Dollar has fallen, when is gold-Dinar coming
Dzikrullah W Pramudya
19-Dec-06
...
Now, the dollar has fallen. Why hasn't the gold-Dinar emerged yet, the way Mahathir and many other people have wished?
An answer came from Jakarta-based Dinar Club President, Muhaimin Iqbal, who is also CEO of the oldest insurance company in Indonesia ...
The important element that is still missing, said Iqbal, is the niyat or the political will of the sharia banking and the governments.
Iqbal specifically suggested that the wisest investment step for Bruneians, following the fall of the dollar (which will continue to fall, according to Greenspan's prediction), would be to keep their wealth in gold-Dinar. An alternative for the Dinar currency, Iqbal said, would be to have the Pure Gold Bullion.
Iqbal said, however, that the gold-Dinar is not even the ultimate aim ....
//////////////////////////////////
////////////////
////
:D
oneness
the apostle dean
Hey onepence, you might be interested in some of these links.
THE ISLAMIC DINAR. Introduction. (Stuff about the gold dinar, Islam,
riba...)
http://homepages.tscnet.com/omard1/dinar.htm
Launching the Islamic Gold Dinar and Silver Dirham in UAE -
The traditional Muslim coins and the deeper significance of their reappearance as currency
http://www.islamicmint.com/newsarticles/launch.html
"...Frightening as the atomic bomb is, another kind of bomb, namely The Islamic Dinar could pose an even bigger threat to our existing financial system which I believe would be enormously bullish for gold..."
The Islamic (Gold) Dinar - Gold Beagle (http://www.gold-eagle.com/editorials_98/taylor112598.html)
My take on this is: If it's been around since 1998, it is certainly taking its time to have any perceivable effect- at least from the viewpoint of the western nations.
And I have a quote from 1998 from my archives:
By Umar Vadillo & Mahmud Lund
May 18th 1998
"My name is Mahmud Lund. Please allow me to introduce myself as a director of the Islamic Mint. Umar Vadillo has asked me to communicate with you, give his greetings and the news about his recent trip to Malaysia. To quote from his report, entitled: The Islamic Dinar in Malaysia"
"An historical step was made a few days ago by the Islamic Party of Malaysia with more than 500,000 members and the Government of Kelantan (A state in the NE of Malaysia) when they adopted the Islamic Dinar as part of their policy."
"In a public event on the 28th of April, in the city hall of Kuala Krai in Kelantan, members of the Central Committee and other senior members announced the decision to introduce the Islamic Dinar as part of the party policy."
"Then the same day in the evening in a large gathering of 10,000 people in the mini-stadium Kelaburan, the Chief Minister of Kelantan personally endorsed the establishment of the Islamic Dinar as the currency of the Muslims."
"In a talk which I was invited to give at this gathering there was a resounding acclamation for the choice of the Islamic Dinar over the US Dollar as the currency which the audience would choose for themselves. I finished my talk with the words, "Allah does not say in the Qur'an, 'US Dollar or Malaysian Ringgit'. Allah says, 'Dinar' and 'Dirham'. If we use the Islamic Dinar prosperity will come to us; if we accept the US Dollar misery will come to us. Let us say from Kelantan to the world "The Islamic Dinar is our currency. No more inflation. No more Soros." A flood of people came afterwards wanting to immediately take dinars and dirhams."...
"The Islamic Dinar is on its way to becoming the currency of the Muslim peoples. And, Allah knows best, it could once again become the currency of all people who are tired of being cheated."
"The Islamic Mint acknowledges the many requests we have had for purchase of the Dinar and the Dirham and ask your patience as we proceed methodically towards a successful world-wide launch in significant numbers for these most important coins, a real money! We hope to be able to fill orders in the near future. Please visit the Islamic Mint for news updates."
"Thanks once again, Sincerely, Mahmud Lund."
THE ISLAMIC DINAR. Introduction. (Stuff about the gold dinar, Islam,
riba...)
http://homepages.tscnet.com/omard1/dinar.htm
Launching the Islamic Gold Dinar and Silver Dirham in UAE -
The traditional Muslim coins and the deeper significance of their reappearance as currency
http://www.islamicmint.com/newsarticles/launch.html
"...Frightening as the atomic bomb is, another kind of bomb, namely The Islamic Dinar could pose an even bigger threat to our existing financial system which I believe would be enormously bullish for gold..."
The Islamic (Gold) Dinar - Gold Beagle (http://www.gold-eagle.com/editorials_98/taylor112598.html)
My take on this is: If it's been around since 1998, it is certainly taking its time to have any perceivable effect- at least from the viewpoint of the western nations.
And I have a quote from 1998 from my archives:
By Umar Vadillo & Mahmud Lund
May 18th 1998
"My name is Mahmud Lund. Please allow me to introduce myself as a director of the Islamic Mint. Umar Vadillo has asked me to communicate with you, give his greetings and the news about his recent trip to Malaysia. To quote from his report, entitled: The Islamic Dinar in Malaysia"
"An historical step was made a few days ago by the Islamic Party of Malaysia with more than 500,000 members and the Government of Kelantan (A state in the NE of Malaysia) when they adopted the Islamic Dinar as part of their policy."
"In a public event on the 28th of April, in the city hall of Kuala Krai in Kelantan, members of the Central Committee and other senior members announced the decision to introduce the Islamic Dinar as part of the party policy."
"Then the same day in the evening in a large gathering of 10,000 people in the mini-stadium Kelaburan, the Chief Minister of Kelantan personally endorsed the establishment of the Islamic Dinar as the currency of the Muslims."
"In a talk which I was invited to give at this gathering there was a resounding acclamation for the choice of the Islamic Dinar over the US Dollar as the currency which the audience would choose for themselves. I finished my talk with the words, "Allah does not say in the Qur'an, 'US Dollar or Malaysian Ringgit'. Allah says, 'Dinar' and 'Dirham'. If we use the Islamic Dinar prosperity will come to us; if we accept the US Dollar misery will come to us. Let us say from Kelantan to the world "The Islamic Dinar is our currency. No more inflation. No more Soros." A flood of people came afterwards wanting to immediately take dinars and dirhams."...
"The Islamic Dinar is on its way to becoming the currency of the Muslim peoples. And, Allah knows best, it could once again become the currency of all people who are tired of being cheated."
"The Islamic Mint acknowledges the many requests we have had for purchase of the Dinar and the Dirham and ask your patience as we proceed methodically towards a successful world-wide launch in significant numbers for these most important coins, a real money! We hope to be able to fill orders in the near future. Please visit the Islamic Mint for news updates."
"Thanks once again, Sincerely, Mahmud Lund."
Kewangan Islam instrumen global
Kewangan Islam instrumen global
Laporan oleh Kamarulzaidi Kamis dan Azli Ayob
bhbiz@bharian.com.my ( 12 Ogos 2009) EKONOMI
SEKTOR kewangan Islam kini tidak lagi terhad kepada umat Islam, tetapi masyarakat seluruh dunia, titah Raja Muda Perak, Raja Dr Nazrin Shah.
Baginda yang juga Duta Kewangan bagi Pusat Kewangan Islam Antarabangsa Malaysia (MIFC) bertitah, industri kewangan Islam sudah menjadi instrumen pasaran global sebenar membabitkan penyertaan menyeluruh pelabur dalam rang-kaian pelaburan alternatif itu meliputi sukuk, amanah saham, dana komoditi, dana didagangkan di bursa (ETF), dana amanah hartanah (Reits), takaful, derivatif berlandaskan syariah dan dana lindung nilai.
“Peserta pasaran dalam industri kewangan Islam kini turut meliputi bank yang mempunyai jendela perbankan Islam, institusi kewangan berlandaskan syariah, broker saham, pengurus dana dan pengendali takaful, manakala pusat kewangan yang lebih stabil pula sedang berusaha menjadi hab global bagi kewangan Islam,” titahnya pada Simposium Pasaran Modal Islam di Kuala Lumpur, semalam.
Baginda bertitah, perkembangan terbaru menunjukkan kemungkinan penubuhan bank Islam di Perancis, penerbitan buku mengenai kewangan Islam dalam bahasa Itali, penubuhan Reits berlandaskan syariah di Australia dan timbulnya berita berhubung jangkaan terbitan sukuk dari United Kingdom, Australia dan Korea.
Titahnya, apabila industri itu semakin berkembang, akan wujud lebih banyak permintaan daripada kalangan pelabur bukan Islam dan penerbit pula akan memainkan peranan lebih besar dalam industri itu.
“Di Malaysia misalnya, permintaan terhadap produk berlandaskan syariah di kalangan bukan Islam adalah setanding permintaannya daripada golongan Islam,” titahnya.
Pada peringkat global pula, baginda bertitah, ada rangkaian penerbit produk berlandaskan syariah yang pelbagai merangkumi Bank Dunia, IFC (Pusat Kewangan Islam), negeri persekutuan Anhalt-Saxony di Jerman, Aston-Martin dan Shell.
“Mereka ini kini menjadi peneraju terbitan sukuk, dan senarai ini terus bertambah,” titahnya.
Baginda bertitah, antara matlamat penting yang perlu dicapai industri kewangan Islam adalah menyepadukannya ke dalam sistem kewangan global, manakala salah satu sasaran penting kewangan global seharusnya adalah untuk membuka pintunya kepada kewangan Islam.
“Kita semua mesti bekerja secara bersama untuk membina semula sifat amanah dalam sektor kewangan ini. Kewangan memerlukan amanah, dan kita sudah mewujudkannya. Amanah ini terdiri daripada satu set elemen universal iaitu kejujuran, keadilan dan kejelasan, yang boleh ditemui dalam semua agama,” titahnya.
Dalam aspek itu, Raja Nazrin bertitah, sudah tiba masanya kewangan Islam membalas jasa sektor kewangan konvensional yang meminjamkan ciri-cirinya dari segi penawaran produk.
“Memandangkan kewangan konvensional mengajar kewangan Islam bagaimana menyeimbangkan portfolio dan menguruskan dana, Beta percaya kewangan Islam kini boleh membalas jasa dengan meminjamkan kepada kewangan konvensional prinsip tadbir urus korporat dan tanggungjawab yang baik,” katanya.
Laporan oleh Kamarulzaidi Kamis dan Azli Ayob
bhbiz@bharian.com.my ( 12 Ogos 2009) EKONOMI
SEKTOR kewangan Islam kini tidak lagi terhad kepada umat Islam, tetapi masyarakat seluruh dunia, titah Raja Muda Perak, Raja Dr Nazrin Shah.
Baginda yang juga Duta Kewangan bagi Pusat Kewangan Islam Antarabangsa Malaysia (MIFC) bertitah, industri kewangan Islam sudah menjadi instrumen pasaran global sebenar membabitkan penyertaan menyeluruh pelabur dalam rang-kaian pelaburan alternatif itu meliputi sukuk, amanah saham, dana komoditi, dana didagangkan di bursa (ETF), dana amanah hartanah (Reits), takaful, derivatif berlandaskan syariah dan dana lindung nilai.
“Peserta pasaran dalam industri kewangan Islam kini turut meliputi bank yang mempunyai jendela perbankan Islam, institusi kewangan berlandaskan syariah, broker saham, pengurus dana dan pengendali takaful, manakala pusat kewangan yang lebih stabil pula sedang berusaha menjadi hab global bagi kewangan Islam,” titahnya pada Simposium Pasaran Modal Islam di Kuala Lumpur, semalam.
Baginda bertitah, perkembangan terbaru menunjukkan kemungkinan penubuhan bank Islam di Perancis, penerbitan buku mengenai kewangan Islam dalam bahasa Itali, penubuhan Reits berlandaskan syariah di Australia dan timbulnya berita berhubung jangkaan terbitan sukuk dari United Kingdom, Australia dan Korea.
Titahnya, apabila industri itu semakin berkembang, akan wujud lebih banyak permintaan daripada kalangan pelabur bukan Islam dan penerbit pula akan memainkan peranan lebih besar dalam industri itu.
“Di Malaysia misalnya, permintaan terhadap produk berlandaskan syariah di kalangan bukan Islam adalah setanding permintaannya daripada golongan Islam,” titahnya.
Pada peringkat global pula, baginda bertitah, ada rangkaian penerbit produk berlandaskan syariah yang pelbagai merangkumi Bank Dunia, IFC (Pusat Kewangan Islam), negeri persekutuan Anhalt-Saxony di Jerman, Aston-Martin dan Shell.
“Mereka ini kini menjadi peneraju terbitan sukuk, dan senarai ini terus bertambah,” titahnya.
Baginda bertitah, antara matlamat penting yang perlu dicapai industri kewangan Islam adalah menyepadukannya ke dalam sistem kewangan global, manakala salah satu sasaran penting kewangan global seharusnya adalah untuk membuka pintunya kepada kewangan Islam.
“Kita semua mesti bekerja secara bersama untuk membina semula sifat amanah dalam sektor kewangan ini. Kewangan memerlukan amanah, dan kita sudah mewujudkannya. Amanah ini terdiri daripada satu set elemen universal iaitu kejujuran, keadilan dan kejelasan, yang boleh ditemui dalam semua agama,” titahnya.
Dalam aspek itu, Raja Nazrin bertitah, sudah tiba masanya kewangan Islam membalas jasa sektor kewangan konvensional yang meminjamkan ciri-cirinya dari segi penawaran produk.
“Memandangkan kewangan konvensional mengajar kewangan Islam bagaimana menyeimbangkan portfolio dan menguruskan dana, Beta percaya kewangan Islam kini boleh membalas jasa dengan meminjamkan kepada kewangan konvensional prinsip tadbir urus korporat dan tanggungjawab yang baik,” katanya.
Kutipan zakat cecah RM1.03b
Kutipan zakat cecah RM1.03b( BHarian-National 12 Ogos 2009)
KUALA LUMPUR: Kutipan zakat seluruh negara mencecah RM1.03 bilion tahun lalu, tertinggi dalam sejarah dan kali pertama melepasi angka satu bilion berbanding RM830 juta pada 2007, kata Timbalan Menteri di Jabatan Perdana Menteri, Datuk Dr Mashitah Ibrahim.
Beliau berkata, kejayaan itu adalah hasil kesedaran umat Islam mengenai tanggungjawab terhadap menunaikan rukun Islam ketiga itu, dan pelaksanaan Bulan Zakat Kebangsaan yang julang kali dianjurkan tahun lalu.
Katanya, peningkatan itu juga disebabkan pelbagai kempen yang dijalankan, disamping wujudnya kepercayaan terhadap institusi zakat yang mengagihkan kutipan kepada golongan asnaf berkelayakan di negara ini.
"Sebab itu kini kita adakan pelbagai kempen. Kita mahu umat Islam faham, bahawa apabila berzakat, ia akan membantu menambah rezeki mereka, jadi tidak boleh mengelak dan bagi alasan kerana zakat adalah wadah bantuan untuk umat Islam yang memerlukan.
"Apabila sudah diberikan pemahaman, jadi tidak susah lagi untuk umat Islam menunaikan rukun ini dengan ikhlas." katanya pada sidang media selepas merasmikan Sambutan Bulan Zakat Kebangsaan dan Seminar Zakat Kebangsaan 2009 bertemakan 'Zakat: 1 Kewajipan, 1 Juta Harapan' di Pusat Dagangan Dunia Putra (PWTC) di sini, semalam.
Turut hadir, Ketua Pengarah Jabatan Wakaf, Zakat dan Haji (Jawhar), Datuk Dr Sohaimi Mohd Salleh dan Presiden Persatuan Akauntan Percukaian Malaysia (Mata), Abd Aziz Abu Bakar.
Pada majlis itu, Mashitah turut menyampaikan anugerah Tokoh Usahawan Asnaf kepada bekas penerima zakat, iaitu Rosnani Kassim Loh dan Mohd Tohid Sidek yang kini berjaya dalam bidang masing-masing hasil daripada perniagaan yang dibangunkan dengan wang zakat diterima.
Mengulas kejayaan dua bekas penerima zakat itu, Mashitah berkata, kejayaan mereka adalah sesuatu yang membanggakan kerana kini tidak lagi menerima bantuan sebaliknya sudah berkemampuan menunaikan tanggungjawab berzakat bagi membantu golongan yang lebih memerlukan.
KUALA LUMPUR: Kutipan zakat seluruh negara mencecah RM1.03 bilion tahun lalu, tertinggi dalam sejarah dan kali pertama melepasi angka satu bilion berbanding RM830 juta pada 2007, kata Timbalan Menteri di Jabatan Perdana Menteri, Datuk Dr Mashitah Ibrahim.
Beliau berkata, kejayaan itu adalah hasil kesedaran umat Islam mengenai tanggungjawab terhadap menunaikan rukun Islam ketiga itu, dan pelaksanaan Bulan Zakat Kebangsaan yang julang kali dianjurkan tahun lalu.
Katanya, peningkatan itu juga disebabkan pelbagai kempen yang dijalankan, disamping wujudnya kepercayaan terhadap institusi zakat yang mengagihkan kutipan kepada golongan asnaf berkelayakan di negara ini.
"Sebab itu kini kita adakan pelbagai kempen. Kita mahu umat Islam faham, bahawa apabila berzakat, ia akan membantu menambah rezeki mereka, jadi tidak boleh mengelak dan bagi alasan kerana zakat adalah wadah bantuan untuk umat Islam yang memerlukan.
"Apabila sudah diberikan pemahaman, jadi tidak susah lagi untuk umat Islam menunaikan rukun ini dengan ikhlas." katanya pada sidang media selepas merasmikan Sambutan Bulan Zakat Kebangsaan dan Seminar Zakat Kebangsaan 2009 bertemakan 'Zakat: 1 Kewajipan, 1 Juta Harapan' di Pusat Dagangan Dunia Putra (PWTC) di sini, semalam.
Turut hadir, Ketua Pengarah Jabatan Wakaf, Zakat dan Haji (Jawhar), Datuk Dr Sohaimi Mohd Salleh dan Presiden Persatuan Akauntan Percukaian Malaysia (Mata), Abd Aziz Abu Bakar.
Pada majlis itu, Mashitah turut menyampaikan anugerah Tokoh Usahawan Asnaf kepada bekas penerima zakat, iaitu Rosnani Kassim Loh dan Mohd Tohid Sidek yang kini berjaya dalam bidang masing-masing hasil daripada perniagaan yang dibangunkan dengan wang zakat diterima.
Mengulas kejayaan dua bekas penerima zakat itu, Mashitah berkata, kejayaan mereka adalah sesuatu yang membanggakan kerana kini tidak lagi menerima bantuan sebaliknya sudah berkemampuan menunaikan tanggungjawab berzakat bagi membantu golongan yang lebih memerlukan.
Monday, August 10, 2009
Islamic Mint
Thursday, August 14, 2008
Islamic Mint
This write up of the Islamic Mint explains exactly who the Islamic Mint are and what they deal in and is well worth while reading before you decide to buy any gold or silver coins from the Islamic Mint.
As always, it is prudent to do one's own due diligence before buying gold from any gold dealer or mint.
Who are the Islamic Mint
The Islamic Mint is situated in Dubai, United Arab Emirates. It produces the Islamic Dinar and Islamic Dirham.
Castiñeira is marketing director of the Islamic Mint, a private institution dedicated to reviving as international currency the coinage described in the Koran - the gold dinar and silver dirham.
E-dinar's British COO, Yahya Cattanach, and his family share a communal condo with Castiñeira in the comfortable Jumeirah district of Dubai. The company's Spanish president, Umar Ibrahim Vadillo, is also the president of the Islamic Mint. And finally, uniting all three men, as well as e-dinar's Swiss CEO, Malaysian CFO, and German CTO, is the fact that all are high-placed members of the Murabitun movement, a modern, Western offshoot of Sufi Islam and possibly the only religious sect in history whose defining article of faith is a financial theory.
The e-dinar's primary unit of account is 4.25 grams of gold. Officially, the Islamic Mint and e-dinar are separate organizations, but they're actually the off- and online divisions of a single project, joined by ideological and personal ties.
Their website is www.e-dinar.com
They are associated with E-Dinar Ltd who actually sell the coins. E-Dinar Ltd are based in Malaysia and Dubai.
They first began minting Minted first gold dinar and silver dirhams in 1992. In 2000 they Established formal organization and incorporated e-dinar Ltd in Labuan, Malaysia with a authorized share capital of USD 1.5 million. They received permission to mint coins in Dubai and have established mints in UAE and Indonesia.
They also have a Malaysian site at www.islamicmint.com.my.
More information about the Islamic Currency & Mint
In the beginning the Muslims used gold and silver by weight and the dinar and dirhams that they used were made by the Persians.
According to the Islamic mint website:
"Umar Ibn al-Khattab (second caliph of the Muslim also known as Abu Hafs Umar ibn al-Khattab al-Adawi, reigned from 634 to 644 CE) established the known relationship between them based on their weights: "10 dirhams must be equivalent to 7 dinars (mithqals)". The weight of a mithqal of gold is seventy-two grains of barley, so that the dirham which is seven-tenths of it is fifty and two-fifths grains. In the year 75 AH (695 CE) Caliph Abul Walid Abd al-Malik ibn Marwan (reigned from 685 to 705 CE) ordered Al-Hajjaj to mint the first Dirhams and in 77 AH (696 CE), the first standard gold Dinar were minted. In the next years these coins were minted in all the regions of Islam. He ordered that the coins should be stamped with the sentence: "la ilaha ill' Allah" (Allah is Unique, Allah is Eternal). He also ordered to remove human figures and animals from the coins and to be replaced with letters. Gold and silver coins remained official currency in Islamic regions until the fall of the Caliphate in 1918. This indicates that the Islamic Gold Dinar was the currency of the Muslim community from its first years right up to the fall of the Ottoman Empire (Osmanli dynasty)."
Dr. Umar Ibrahim Vadillo, Pioneer of the Dinar's reintroduction and director of E-Dinar Ltd, is known as the designer of the current coins. He is also the author of books, written on Islamic finance and Economics. Among his books are "The Fatwa on Paper Money", "The Return of the Gold Dinar" and "The Esoteric Deviation in Islam", published by Medinah Press.
Islamic Mint Products
The wealth in these coins can be calculated directly by weight for zakah, marriage and hudud according to Islamic teaching and implementation.
Weights and Measures:
The Islamic Dinar 22K gold (.917) is equivalent to 4.25 grams 23mm diameter.
The Islamic Dirham 0.925 pure silver equivalent to 2.975 grams 25mm diameter.
Besides 1 Dirham in silver and 1 Dinar gold coins, 5 Dirhams in silver and 2 Dinars in Gold also exists. The silver coins show the Kaaba. (All the Muslims face the Kaaba during their five time prayers in a day, which is the second pillar of Islam. ) The gold coins also show the tomb of Muhammad.
The Islamic Dinar is now currently minted in four countries and being privately used in more than 22. During 1982, the Islamic Development Bank was prescribed by the IMF as a holder of Special Drawing Rights (SDR's). SDR's are a unit of IMF currency tied to gold. The Islamic Dinar, which is made of gold is a unit of account at the Islamic Development Bank, equal in value to one SDR.
It is possible to buy Dinar gold coins from the various Islamic mints such as e-dinar Ltd. You will need to open an account and provide the usual ‘Know your Customer’ proof of ID, or alternatively one could also possible purchase from the principal contact person of Islamic Mint: Mr. Thani Alromaithi. email: info@e-dinar.com. But I dare say he will also want to know with whom he is dealing.
In the beginning of 2008 the Islamic Mint introduced two more coins: 10 Dirhams in .999 Silver having 30g and 8 Dinar 22K gold having 34g. These gold and silver coins are also available for sale. Their main office is at Abu Dhabi and regional branch and private mint located in Dubai. Their functional website is at www.e-dinar.com/ and current prices can be seen at www.e-dinar.com/cgi/shop.cgi.
You might also be able to get them at gold and silver dealers.
Last Word on the Islamic Mint
The Islamic gold and silver coins are very impressive and outstanding in quality and the cost is not much above spot. But they are really designed specifically for use in the Islamic World.
When it comes to investment in gold and silver, one would be better off looking at gold bullion in the form of bars or even buying gold and silver from such places as goldmoney.com for example, for investment purposes.
More information on Islamic gold coins can be found at: Islamic Gold Coins.
If you have bought any Islamic silver bullion coins from any dealers please feel free to leave your feedback on the quality of service and products including any online complaints and special attention or service given by any dealers of Islamic gold and silver coins.
Islamic Mint
This write up of the Islamic Mint explains exactly who the Islamic Mint are and what they deal in and is well worth while reading before you decide to buy any gold or silver coins from the Islamic Mint.
As always, it is prudent to do one's own due diligence before buying gold from any gold dealer or mint.
Who are the Islamic Mint
The Islamic Mint is situated in Dubai, United Arab Emirates. It produces the Islamic Dinar and Islamic Dirham.
Castiñeira is marketing director of the Islamic Mint, a private institution dedicated to reviving as international currency the coinage described in the Koran - the gold dinar and silver dirham.
E-dinar's British COO, Yahya Cattanach, and his family share a communal condo with Castiñeira in the comfortable Jumeirah district of Dubai. The company's Spanish president, Umar Ibrahim Vadillo, is also the president of the Islamic Mint. And finally, uniting all three men, as well as e-dinar's Swiss CEO, Malaysian CFO, and German CTO, is the fact that all are high-placed members of the Murabitun movement, a modern, Western offshoot of Sufi Islam and possibly the only religious sect in history whose defining article of faith is a financial theory.
The e-dinar's primary unit of account is 4.25 grams of gold. Officially, the Islamic Mint and e-dinar are separate organizations, but they're actually the off- and online divisions of a single project, joined by ideological and personal ties.
Their website is www.e-dinar.com
They are associated with E-Dinar Ltd who actually sell the coins. E-Dinar Ltd are based in Malaysia and Dubai.
They first began minting Minted first gold dinar and silver dirhams in 1992. In 2000 they Established formal organization and incorporated e-dinar Ltd in Labuan, Malaysia with a authorized share capital of USD 1.5 million. They received permission to mint coins in Dubai and have established mints in UAE and Indonesia.
They also have a Malaysian site at www.islamicmint.com.my.
More information about the Islamic Currency & Mint
In the beginning the Muslims used gold and silver by weight and the dinar and dirhams that they used were made by the Persians.
According to the Islamic mint website:
"Umar Ibn al-Khattab (second caliph of the Muslim also known as Abu Hafs Umar ibn al-Khattab al-Adawi, reigned from 634 to 644 CE) established the known relationship between them based on their weights: "10 dirhams must be equivalent to 7 dinars (mithqals)". The weight of a mithqal of gold is seventy-two grains of barley, so that the dirham which is seven-tenths of it is fifty and two-fifths grains. In the year 75 AH (695 CE) Caliph Abul Walid Abd al-Malik ibn Marwan (reigned from 685 to 705 CE) ordered Al-Hajjaj to mint the first Dirhams and in 77 AH (696 CE), the first standard gold Dinar were minted. In the next years these coins were minted in all the regions of Islam. He ordered that the coins should be stamped with the sentence: "la ilaha ill' Allah" (Allah is Unique, Allah is Eternal). He also ordered to remove human figures and animals from the coins and to be replaced with letters. Gold and silver coins remained official currency in Islamic regions until the fall of the Caliphate in 1918. This indicates that the Islamic Gold Dinar was the currency of the Muslim community from its first years right up to the fall of the Ottoman Empire (Osmanli dynasty)."
Dr. Umar Ibrahim Vadillo, Pioneer of the Dinar's reintroduction and director of E-Dinar Ltd, is known as the designer of the current coins. He is also the author of books, written on Islamic finance and Economics. Among his books are "The Fatwa on Paper Money", "The Return of the Gold Dinar" and "The Esoteric Deviation in Islam", published by Medinah Press.
Islamic Mint Products
The wealth in these coins can be calculated directly by weight for zakah, marriage and hudud according to Islamic teaching and implementation.
Weights and Measures:
The Islamic Dinar 22K gold (.917) is equivalent to 4.25 grams 23mm diameter.
The Islamic Dirham 0.925 pure silver equivalent to 2.975 grams 25mm diameter.
Besides 1 Dirham in silver and 1 Dinar gold coins, 5 Dirhams in silver and 2 Dinars in Gold also exists. The silver coins show the Kaaba. (All the Muslims face the Kaaba during their five time prayers in a day, which is the second pillar of Islam. ) The gold coins also show the tomb of Muhammad.
The Islamic Dinar is now currently minted in four countries and being privately used in more than 22. During 1982, the Islamic Development Bank was prescribed by the IMF as a holder of Special Drawing Rights (SDR's). SDR's are a unit of IMF currency tied to gold. The Islamic Dinar, which is made of gold is a unit of account at the Islamic Development Bank, equal in value to one SDR.
It is possible to buy Dinar gold coins from the various Islamic mints such as e-dinar Ltd. You will need to open an account and provide the usual ‘Know your Customer’ proof of ID, or alternatively one could also possible purchase from the principal contact person of Islamic Mint: Mr. Thani Alromaithi. email: info@e-dinar.com. But I dare say he will also want to know with whom he is dealing.
In the beginning of 2008 the Islamic Mint introduced two more coins: 10 Dirhams in .999 Silver having 30g and 8 Dinar 22K gold having 34g. These gold and silver coins are also available for sale. Their main office is at Abu Dhabi and regional branch and private mint located in Dubai. Their functional website is at www.e-dinar.com/ and current prices can be seen at www.e-dinar.com/cgi/shop.cgi.
You might also be able to get them at gold and silver dealers.
Last Word on the Islamic Mint
The Islamic gold and silver coins are very impressive and outstanding in quality and the cost is not much above spot. But they are really designed specifically for use in the Islamic World.
When it comes to investment in gold and silver, one would be better off looking at gold bullion in the form of bars or even buying gold and silver from such places as goldmoney.com for example, for investment purposes.
More information on Islamic gold coins can be found at: Islamic Gold Coins.
If you have bought any Islamic silver bullion coins from any dealers please feel free to leave your feedback on the quality of service and products including any online complaints and special attention or service given by any dealers of Islamic gold and silver coins.
Saturday, August 8, 2009
Gulf Cooperation Council eyes common currency
Gulf Cooperation Council eyes common currency
CAIRO, Dec 29 — In a gathering marred by Israeli attacks on Gaza and pressured by the ailing world economy, leaders of the six Gulf Arab nations are gearing up for a summit in which they are expected to tackle head-on a long-elusive monetary union agreement.
The two-day meeting, beginning today in the Omani capital, Muscat, has been touted as a key step in helping the Gulf Cooperation Council’s six member states realise a goal of a common currency and broader economic unity. The push is made all the more relevant by the global economic crisis that has hit hard even these oil rich nations.
Officials yesterday said Israeli air strikes on the Hamas-ruled Gaza Strip, which have left over 280 Palestinians dead and sparked outrage throughout the Arab world, would not derail the meeting. But the violence would clearly factor into the summit agenda, as well as in the GCC foreign ministers meeting which precedes the main gathering.
Omani Information Minister Hamed al-Rashid said the Palestinian issue is always on the minds of the GCC leaders and “without doubt, the events in Gaza will be at the forefront of the upcoming meetings”.
While the leaders are expected to discuss the current financial meltdown, analysts and economists are watching to see what steps the officials will take to push along a plan for a GCC common currency, which is scheduled to be launched in 2010. Also important are their efforts to finalise details for the precursor to the bloc’s new central bank.
“This meeting is quite important because they will have to outline what they’re going to be doing prior to 2010, and they will also have to come out quite concretely about what is to come of that deadline,” said John Sfakianakis, chief economist at the Saudi British Bank.
The GCC, which includes Saudi Arabia, the United Arab Emirates, Oman, Qatar, Kuwait and Bahrain, has been discussing setting up a common currency for years but the issue has been stymied by political bickering and infighting.
While progress has been slow in bringing the nations together, the global financial meltdown has injected renewed vigour into efforts to push the oil-rich members toward closer economic cooperation.
GCC Secretary-General Abdul Rahman Hamad al-Attiyah told the pan-Arab daily newspaper Al-Hayat that leaders were well aware of the need to reach a joint agreement on how to tackle the financial crisis.
In an interview with the English-language Oman Tribune, Bahrain’s prime minister, Sheik Khalifa bin Salman Al Khalifa said the “integration of Gulf countries has become unavoidable”.
“At a time when the whole world is moving towards the establishment of economic blocs, it is high time that we accelerated the remaining steps for the economic integration of GCC states,” he was quoted as saying.
So far, each country has been taking its own steps to tackle the crisis, adopting measures ranging from cutting interest rates, injecting cash into the economy, guaranteeing deposits and lowering cash reserve requirements for banks.
“At times of economic crisis, you expect that there is great unity, or the attempt to be one voice instead of many voices,” said Sfakianakis. “The onus is on the GCC to show how they’re handling this and that they are one instead of six voices.”
Tumbling oil prices are also a major stimulus for embracing greater cooperation.
Crude prices have plummeted by more than 60 per cent since mid-July highs of nearly US$150 (RM525) per barrel, straining budgets and spending in these nations, some of which rely on oil sales for up to 90 per cent of their foreign revenues.
Analysts and economists have said the Gulf Arab region’s vast oil wealth, and the budget surpluses realised from this past year’s surge in crude prices, will help cushion the countries from the worst of the economic downturn that has hammered the rest of the world.
The Institute of International Finance, in a recent study, estimated that GCC countries’ economic growth would slow from 5.8 per cent in 2008 to 4.2 per cent in 2009. The figure is markedly higher than the 0.9 per cent global economic growth rate forecast by the World Bank earlier this month.
Even so, the impact has been pronounced. Stock exchanges in the region have plummeted — in Dubai by as much as over 70 per cent since the start of the year.
Saudi Arabia, the Arab world’s economic powerhouse, recently unveiled a budget reflecting projections of its first deficit since 2002. In the last fiscal year, the country realised a surplus of US$157 billion, largely on oil revenues.
The kingdom, however, has ramped up spending, allocating more funds to infrastructure development, education and health care as it looks to diversify its economy.
The summit is also being watched closely as a measure of whether the leaders in these Arab countries will act decisively or, as has happened too often in past Arab summits and gatherings, emerge with little more than an agreement to agree at a later date.
“Everybody is talking about the deadlines not being met,” said Sfakianakis. “If they move with the 2010 deadline, they will have to announce what concrete steps they will be taking.” — AP
CAIRO, Dec 29 — In a gathering marred by Israeli attacks on Gaza and pressured by the ailing world economy, leaders of the six Gulf Arab nations are gearing up for a summit in which they are expected to tackle head-on a long-elusive monetary union agreement.
The two-day meeting, beginning today in the Omani capital, Muscat, has been touted as a key step in helping the Gulf Cooperation Council’s six member states realise a goal of a common currency and broader economic unity. The push is made all the more relevant by the global economic crisis that has hit hard even these oil rich nations.
Officials yesterday said Israeli air strikes on the Hamas-ruled Gaza Strip, which have left over 280 Palestinians dead and sparked outrage throughout the Arab world, would not derail the meeting. But the violence would clearly factor into the summit agenda, as well as in the GCC foreign ministers meeting which precedes the main gathering.
Omani Information Minister Hamed al-Rashid said the Palestinian issue is always on the minds of the GCC leaders and “without doubt, the events in Gaza will be at the forefront of the upcoming meetings”.
While the leaders are expected to discuss the current financial meltdown, analysts and economists are watching to see what steps the officials will take to push along a plan for a GCC common currency, which is scheduled to be launched in 2010. Also important are their efforts to finalise details for the precursor to the bloc’s new central bank.
“This meeting is quite important because they will have to outline what they’re going to be doing prior to 2010, and they will also have to come out quite concretely about what is to come of that deadline,” said John Sfakianakis, chief economist at the Saudi British Bank.
The GCC, which includes Saudi Arabia, the United Arab Emirates, Oman, Qatar, Kuwait and Bahrain, has been discussing setting up a common currency for years but the issue has been stymied by political bickering and infighting.
While progress has been slow in bringing the nations together, the global financial meltdown has injected renewed vigour into efforts to push the oil-rich members toward closer economic cooperation.
GCC Secretary-General Abdul Rahman Hamad al-Attiyah told the pan-Arab daily newspaper Al-Hayat that leaders were well aware of the need to reach a joint agreement on how to tackle the financial crisis.
In an interview with the English-language Oman Tribune, Bahrain’s prime minister, Sheik Khalifa bin Salman Al Khalifa said the “integration of Gulf countries has become unavoidable”.
“At a time when the whole world is moving towards the establishment of economic blocs, it is high time that we accelerated the remaining steps for the economic integration of GCC states,” he was quoted as saying.
So far, each country has been taking its own steps to tackle the crisis, adopting measures ranging from cutting interest rates, injecting cash into the economy, guaranteeing deposits and lowering cash reserve requirements for banks.
“At times of economic crisis, you expect that there is great unity, or the attempt to be one voice instead of many voices,” said Sfakianakis. “The onus is on the GCC to show how they’re handling this and that they are one instead of six voices.”
Tumbling oil prices are also a major stimulus for embracing greater cooperation.
Crude prices have plummeted by more than 60 per cent since mid-July highs of nearly US$150 (RM525) per barrel, straining budgets and spending in these nations, some of which rely on oil sales for up to 90 per cent of their foreign revenues.
Analysts and economists have said the Gulf Arab region’s vast oil wealth, and the budget surpluses realised from this past year’s surge in crude prices, will help cushion the countries from the worst of the economic downturn that has hammered the rest of the world.
The Institute of International Finance, in a recent study, estimated that GCC countries’ economic growth would slow from 5.8 per cent in 2008 to 4.2 per cent in 2009. The figure is markedly higher than the 0.9 per cent global economic growth rate forecast by the World Bank earlier this month.
Even so, the impact has been pronounced. Stock exchanges in the region have plummeted — in Dubai by as much as over 70 per cent since the start of the year.
Saudi Arabia, the Arab world’s economic powerhouse, recently unveiled a budget reflecting projections of its first deficit since 2002. In the last fiscal year, the country realised a surplus of US$157 billion, largely on oil revenues.
The kingdom, however, has ramped up spending, allocating more funds to infrastructure development, education and health care as it looks to diversify its economy.
The summit is also being watched closely as a measure of whether the leaders in these Arab countries will act decisively or, as has happened too often in past Arab summits and gatherings, emerge with little more than an agreement to agree at a later date.
“Everybody is talking about the deadlines not being met,” said Sfakianakis. “If they move with the 2010 deadline, they will have to announce what concrete steps they will be taking.” — AP
The Malaysian Gold Dinar Initiative
The Malaysian Gold Dinar Initiative
Dinar & Dirham International Sdn. Bhd. is the leading Malaysian organisation specialising in the Gold Dinar Economy. In addition to the design, production and distribution of bullion products, Dinar & Dirham International’s expertise covers:
· Education and training on the Gold- based Economy
· International Trade Settlement Mechanisms using Gold
· Models for domestic ‘closed circuit’ applications of Gold
· In-depth analysis of the world Gold Markets
· Global Political and Financial implications of the use of Gold as a world currency
· Islamic Gold Reserve initiatives
· New models for domestic and international Trade Investment
Background
The Asian financial crisis in 1997-98 delivered a 5-fold message
1. Paper currencies have no real value - they are numbers printed on paper;
2. The global financial system is unstable and unjust;
3. Developing nations have little or no defence against currency speculation,
4. That, to defend ourselves, we must create our own trading currency of real value,
5. Gold is a safe and stable store of wealth and a globally accepted trade currency.
Dato Seri Dr. Mahathir Bin Mohamad’s courageous and successful defence of the Malaysian economy against the attacks of the currency speculators and the influence of the IMF, gave him an deep understanding of the importance of developing a common gold-based trading currency for the Muslim nations.
For the Muslim World, the Malaysian Initiative to use Gold for International Trade Settlements is a pivotal event that will offer strength and unity to the Muslim Ummah.
The 10th OIC Summit
Malaysia will be host to the 10th OIC Summit in Putrajaya in October this year. The proposal to use Gold as a trade settlement instrument will be proposed to the attending 57 Heads of State. Bilateral Agreements will commence, developing into Multilateral Agreements which in turn will naturally evolve into a Gold Trade Bloc.
This is a platform on which all the Muslim Nations can agree and as Dato Seri Dr. Mahathir has stated, “…this will do more towards countering oppressions by their enemies than the futile violent retaliations.” The use of the Gold Dinar can serve as a genuine means of unity among the OIC states, encouraging inter-OIC trade, and giving them a common trade hard currency.
The Global Effect
The Gold Dinar will mark the return of gold as a financial instrument and a true global currency. It offers the first real alternative to the other anchor currencies.
The move away from fiat paper currencies towards gold will:
· Strengthen and unify the Muslim nations
· Begin the creation a Gold Dinar Trade Bloc
· Encourage and promote inter-OIC trade
· Remove the dependence on the US dollar
· Open the way for other gold-related trade instruments and practices
· Create a just and stable global trade settlement system, that can benefit all developing nations.
As Tan Sri Nor Mohamad Yacob stated recently, “Given this opportunity to strengthen our relationships, using the Gold Dinar, I believe it is incumbent on us as a fardhu kifayah to collectively implement this next component of the International Islamic Financial System.”
For further information, contact Dinar & Dirham International at ddigold@tm.net.my
Dinar & Dirham International Sdn. Bhd. is the leading Malaysian organisation specialising in the Gold Dinar Economy. In addition to the design, production and distribution of bullion products, Dinar & Dirham International’s expertise covers:
· Education and training on the Gold- based Economy
· International Trade Settlement Mechanisms using Gold
· Models for domestic ‘closed circuit’ applications of Gold
· In-depth analysis of the world Gold Markets
· Global Political and Financial implications of the use of Gold as a world currency
· Islamic Gold Reserve initiatives
· New models for domestic and international Trade Investment
Background
The Asian financial crisis in 1997-98 delivered a 5-fold message
1. Paper currencies have no real value - they are numbers printed on paper;
2. The global financial system is unstable and unjust;
3. Developing nations have little or no defence against currency speculation,
4. That, to defend ourselves, we must create our own trading currency of real value,
5. Gold is a safe and stable store of wealth and a globally accepted trade currency.
Dato Seri Dr. Mahathir Bin Mohamad’s courageous and successful defence of the Malaysian economy against the attacks of the currency speculators and the influence of the IMF, gave him an deep understanding of the importance of developing a common gold-based trading currency for the Muslim nations.
For the Muslim World, the Malaysian Initiative to use Gold for International Trade Settlements is a pivotal event that will offer strength and unity to the Muslim Ummah.
The 10th OIC Summit
Malaysia will be host to the 10th OIC Summit in Putrajaya in October this year. The proposal to use Gold as a trade settlement instrument will be proposed to the attending 57 Heads of State. Bilateral Agreements will commence, developing into Multilateral Agreements which in turn will naturally evolve into a Gold Trade Bloc.
This is a platform on which all the Muslim Nations can agree and as Dato Seri Dr. Mahathir has stated, “…this will do more towards countering oppressions by their enemies than the futile violent retaliations.” The use of the Gold Dinar can serve as a genuine means of unity among the OIC states, encouraging inter-OIC trade, and giving them a common trade hard currency.
The Global Effect
The Gold Dinar will mark the return of gold as a financial instrument and a true global currency. It offers the first real alternative to the other anchor currencies.
The move away from fiat paper currencies towards gold will:
· Strengthen and unify the Muslim nations
· Begin the creation a Gold Dinar Trade Bloc
· Encourage and promote inter-OIC trade
· Remove the dependence on the US dollar
· Open the way for other gold-related trade instruments and practices
· Create a just and stable global trade settlement system, that can benefit all developing nations.
As Tan Sri Nor Mohamad Yacob stated recently, “Given this opportunity to strengthen our relationships, using the Gold Dinar, I believe it is incumbent on us as a fardhu kifayah to collectively implement this next component of the International Islamic Financial System.”
For further information, contact Dinar & Dirham International at ddigold@tm.net.my
Tuesday, August 4, 2009
Unicorn hunts for Malaysian target
Unicorn hunts for Malaysian target
By Rupa DamodaranPublished: 2009/08/05
Unicorn International Islamic Bank, Malaysia's first international Islamic bank, plans to buy a 40 per cent stake in a local Islamic bank to boost its presence in the country.
"We hope to identify a good target in the next six to 10 months," chairman Datuk Vaseehar Hassan Abdul Razack said in an interview in Kuala Lumpur.
It may spend as much as US$200 million (RM698 million) on the purchase. Malaysia recently allowed foreign investors to buy up to 70 per cent of local Islamic banks.
Unicorn, which had failed to buy a stake in Bank Islam, the country's oldest Islamic bank, has been looking for a mid-sized institution since then.
The bank's current focus here is investment and corporate banking as well as treasury. It also prefers to offer private equity and asset management on an "opportunistic basis".
Corporate banking provides it with stable revenue growth compared with investment banking where revenue from arranging a couple of sukuk a year, yielding US$7 million to US$8 million (RM24 million to RM28 million), is more lumpy in nature, Vaseehar said.
Unicorn has plans to accelerate the activities of its treasury division in the short to near term, apart from corporate banking services which contribute 30 per cent of revenue.
The bank recorded its maiden profit of RM812,546 last year, after its first year of operations with an international bank licence.
It expects to triple its asset base this year, driven by investment and corporate banking activities. Its assets stand at US$122 million (RM426 million).
Unicorn may move its Bahrain-based global treasury office to Malaysia.
"Compared to Bahrain, the Malaysian money market is much more active and more sophisticated, which makes more sense to have the global treasury here."
It wants to develop US dollar treasury products in Kuala Lumpur and expand its three-man team housed at Menara Standard Chartered.
Currently, it is doing about US$220 million (RM768 million) worth of treasury products.
As the first foreign bank to obtain a licence under the Malaysian International Islamic Financial Centre initiative, Unicorn can do a wide array of syariah-based banking business with foreigners in international currencies.
With an active treasury, it can take deposits as well as carry out money market transactions across the globe.
A billion-dollar US asset management company with an Islamic division has already shown interest in Unicorn's products.
Unicorn Bank, the first bank to introduce the wakalah deposit concept - a syariah-compliant product widely accepted by Gulf Cooperation Council member countries - is also keen to promote wa'ad, a foreign exchange forward contract.
"To make Malaysia an international Islamic hub, we need players to come and do non-ringgit cross-border transactions," Vaseehar said, adding that he was hopeful of developing an Islamic forex trading hub in Malaysia by early next year.
» RELATED STORIESUnicorn sets US$300m financing target this year
By Rupa DamodaranPublished: 2009/08/05
Unicorn International Islamic Bank, Malaysia's first international Islamic bank, plans to buy a 40 per cent stake in a local Islamic bank to boost its presence in the country.
"We hope to identify a good target in the next six to 10 months," chairman Datuk Vaseehar Hassan Abdul Razack said in an interview in Kuala Lumpur.
It may spend as much as US$200 million (RM698 million) on the purchase. Malaysia recently allowed foreign investors to buy up to 70 per cent of local Islamic banks.
Unicorn, which had failed to buy a stake in Bank Islam, the country's oldest Islamic bank, has been looking for a mid-sized institution since then.
The bank's current focus here is investment and corporate banking as well as treasury. It also prefers to offer private equity and asset management on an "opportunistic basis".
Corporate banking provides it with stable revenue growth compared with investment banking where revenue from arranging a couple of sukuk a year, yielding US$7 million to US$8 million (RM24 million to RM28 million), is more lumpy in nature, Vaseehar said.
Unicorn has plans to accelerate the activities of its treasury division in the short to near term, apart from corporate banking services which contribute 30 per cent of revenue.
The bank recorded its maiden profit of RM812,546 last year, after its first year of operations with an international bank licence.
It expects to triple its asset base this year, driven by investment and corporate banking activities. Its assets stand at US$122 million (RM426 million).
Unicorn may move its Bahrain-based global treasury office to Malaysia.
"Compared to Bahrain, the Malaysian money market is much more active and more sophisticated, which makes more sense to have the global treasury here."
It wants to develop US dollar treasury products in Kuala Lumpur and expand its three-man team housed at Menara Standard Chartered.
Currently, it is doing about US$220 million (RM768 million) worth of treasury products.
As the first foreign bank to obtain a licence under the Malaysian International Islamic Financial Centre initiative, Unicorn can do a wide array of syariah-based banking business with foreigners in international currencies.
With an active treasury, it can take deposits as well as carry out money market transactions across the globe.
A billion-dollar US asset management company with an Islamic division has already shown interest in Unicorn's products.
Unicorn Bank, the first bank to introduce the wakalah deposit concept - a syariah-compliant product widely accepted by Gulf Cooperation Council member countries - is also keen to promote wa'ad, a foreign exchange forward contract.
"To make Malaysia an international Islamic hub, we need players to come and do non-ringgit cross-border transactions," Vaseehar said, adding that he was hopeful of developing an Islamic forex trading hub in Malaysia by early next year.
» RELATED STORIESUnicorn sets US$300m financing target this year
Mastercard Records Regional Growth In Second Quarter
August 04, 2009 18:24 PM
Mastercard Records Regional Growth In Second Quarter
KUALA LUMPUR, Aug 4 (Bernama) -- MasterCard Incorporated managed to record growth for the Asia Pacific, Middle East and Africa region for its second quarter ended June 30, 2009.
The region witnessed growth in gross dollar volume (17.4 percent), purchase volume (16.3 percent), purchase transactions (19.7 percent), cash transactions (29.3 percent) and cards issued (14.3 percent) versus the same period in 2008, it said.
"Despite the difficult economic environment, we are pleased with our region's second-quarter results," said Vicky Bindra, president, Asia Pacific, Middle East and Africa, MasterCard Worldwide, in a statement on Tuesday.
"As the economic downturn continues to play out, our focus on working with bank customers and merchant partners to address difficult business issues has become even more important," she said.
As of June 30, 2009, 256 million MasterCard cards (excluding Maestro and Cirrus) had been issued by MasterCard customer financial institutions across the region, the company said.
Cardholders in the region made 1,010 million purchase transactions in the second quarter of 2009 and could use their MasterCard cards at 29.4 million acceptance locations worldwide, it said.
For the second quarter, the Maestro brand mark appeared on 199 million cards in the region, MasterCard said.
Consumers can now make debit point of sale purchases with their Maestro cards at 957,000 merchant locations, it added.
-- BERNAMA
Mastercard Records Regional Growth In Second Quarter
KUALA LUMPUR, Aug 4 (Bernama) -- MasterCard Incorporated managed to record growth for the Asia Pacific, Middle East and Africa region for its second quarter ended June 30, 2009.
The region witnessed growth in gross dollar volume (17.4 percent), purchase volume (16.3 percent), purchase transactions (19.7 percent), cash transactions (29.3 percent) and cards issued (14.3 percent) versus the same period in 2008, it said.
"Despite the difficult economic environment, we are pleased with our region's second-quarter results," said Vicky Bindra, president, Asia Pacific, Middle East and Africa, MasterCard Worldwide, in a statement on Tuesday.
"As the economic downturn continues to play out, our focus on working with bank customers and merchant partners to address difficult business issues has become even more important," she said.
As of June 30, 2009, 256 million MasterCard cards (excluding Maestro and Cirrus) had been issued by MasterCard customer financial institutions across the region, the company said.
Cardholders in the region made 1,010 million purchase transactions in the second quarter of 2009 and could use their MasterCard cards at 29.4 million acceptance locations worldwide, it said.
For the second quarter, the Maestro brand mark appeared on 199 million cards in the region, MasterCard said.
Consumers can now make debit point of sale purchases with their Maestro cards at 957,000 merchant locations, it added.
-- BERNAMA
Sunday, August 2, 2009
Peluang Terbuka Luas Untuk Ejen Bumiputera Menembusi Pasaran Insurans Hayat
01 Ogos, 2009 1359 PM
Peluang Terbuka Luas Untuk Ejen Bumiputera Menembusi Pasaran Insurans Hayat
KUALA LUMPUR, 1 Ogos (Bernama) Peluang untuk ejen Bumiputera menembusi pasaran insurans hayat dan berjaya, terbuka luas kerana masih banyak masyarakat Malaysia, terutama Bumiputera, tidak memiliki polisi insurans tersebut.
Sehingga ini dianggarkan hanya 40 peratus rakyat Malaysia mempunyai perlindungan insurans hayat dan daripada jumlah itu, pemegang polisi di kalangan Bumiputera kurang daripada 10 peratus, kata Presiden Persatuan Insurans Hayat Malaysia (LIAM), Md Adnan Md Zain, pada Konvensyen Ejen Bumiputera di sini, Sabtu.
Konvensyen tersebut dirasmikan oleh Penolong Gabenor Bank Negara Malaysia (BNM), Datuk Muhammad Ibrahim.
Ini merupakan satu cabaran utama untuk ejen-ejen insurans meningkatkan peratusan pemilikan polisi insurans hayat bagi penduduk Bumiputera khususnya dan seluruh penduduk negara amnya kata Md Adnan.
Pada masa ini terdapat kira-kira 15,000 ejen insurans hayat Bumiputera atau 20 peratus daripada 75,000 ejen insurans hayat yang berdaftar di negara ini.
Berdasarkan perangkaan latar belakang pendidikan, lebih daripada 40 peratus ejen Bumiputera berkelulusan kolej dan universiti, katanya.
BERNAMA
Peluang Terbuka Luas Untuk Ejen Bumiputera Menembusi Pasaran Insurans Hayat
KUALA LUMPUR, 1 Ogos (Bernama) Peluang untuk ejen Bumiputera menembusi pasaran insurans hayat dan berjaya, terbuka luas kerana masih banyak masyarakat Malaysia, terutama Bumiputera, tidak memiliki polisi insurans tersebut.
Sehingga ini dianggarkan hanya 40 peratus rakyat Malaysia mempunyai perlindungan insurans hayat dan daripada jumlah itu, pemegang polisi di kalangan Bumiputera kurang daripada 10 peratus, kata Presiden Persatuan Insurans Hayat Malaysia (LIAM), Md Adnan Md Zain, pada Konvensyen Ejen Bumiputera di sini, Sabtu.
Konvensyen tersebut dirasmikan oleh Penolong Gabenor Bank Negara Malaysia (BNM), Datuk Muhammad Ibrahim.
Ini merupakan satu cabaran utama untuk ejen-ejen insurans meningkatkan peratusan pemilikan polisi insurans hayat bagi penduduk Bumiputera khususnya dan seluruh penduduk negara amnya kata Md Adnan.
Pada masa ini terdapat kira-kira 15,000 ejen insurans hayat Bumiputera atau 20 peratus daripada 75,000 ejen insurans hayat yang berdaftar di negara ini.
Berdasarkan perangkaan latar belakang pendidikan, lebih daripada 40 peratus ejen Bumiputera berkelulusan kolej dan universiti, katanya.
BERNAMA
Unicorn International Islamic Bank tinjau peluang
Unicorn International Islamic Bank tinjau peluang
UNICORN Internantional Islamic Bank Malaysia Bhd, anak syarikat Unicorn Investment Bank, syarikat pelaburan berpangkalan di Bahrain, sedang meninjau peluang untuk membeli kepentingan dalam sekurang-kurangnya sebuah institusi kewangan Islam di Malaysia.
Pengerusinya, Datuk Vaseehar Hassan Abdul Razack, berkata mandat diberikan syarikat induk Unicorn Internantional Islamic Bank Malaysia ialah untuk membeli kepentingan dalam bank di Malaysia, tidak mengira sama ada ia milik tempatan atau bank asing.
Sasarannya untuk membeli kepentingan antara 40 peratus hingga 70 peratus dengan anggaran pelaburan antara AS$100 juta hingga AS$200 juta.
Kami berharap dapat mencari bank yang sesuai dalam tempoh antara enam hingga 10 bulan ini, katanya ketika ditemui di Kuala Lumpur, baru-baru ini.
Katanya, sasaran pegangan ekuiti yang agak tinggi itu kerana adalah tidak berbaloi untuk mendapatkan kurang daripada kadar itu kerana proses pengambilalihan itu sendiri termasuk mencari bank sesuai bukan sesuatu yang mudah.
Unicorn Investment Bank sebelum ini pernah gagal mengambilalih kepentingan dalam Bank Islam Malaysia Bhd (BIMB) kerana tidak mencapai persetujuan dari segi harga.
Ketika ini, Vaseehar berkata, Unicorn International Islamic Bank berusaha memantapkan perniagaannya yang baru beroperasi kurang dari dua tahun di negara ini selepas mendapat lesen di bawah Inisiatif Kewangan Islam Antarabangsa Malaysia (MIFC) pada Januari 2008.
Lesen itu adalah untuk mengendalikan aktiviti urus niaga selain dalam mata wang ringgit.
Katanya, tumpuan diberikan untuk mengembangkan unit perbendaharaan yang sebahagian besarnya mengendalikan perniagaan pasaran wang berlandaskan Syariah.
Unit berkenaan ketika ini menyumbang 50 peratus kepada pendapatan institusi kewangan itu.
Produk yang ditawarkan adalah deposit menggunakan konsep ‘Wakalah’ atau wakil (agensi) yang hampir sama dengan konsep Murabahah di pasaran runcit.
Bagi memberi lebih banyak pilihan kepada pelanggan yang juga terdiri daripada syarikat korporat dalam dan luar negara, Vaseehar berkata, Unicorn membangunkan produk tukaran hadapan berasaskan konsep Wa’ad yang berfungsi sebagai pelindung nilai.
Beliau memberi jaminan produk itu diperkenalkan tidak lama lagi.
Vaseehar menjelaskan, pengenalan produk Perbendaharaan berlandaskan Syariah memberi sedikit cabaran kepada Unicorn International Islamic Bank kerana sebahagian besar institusi Islam dunia, termasuk di Asia Barat belum mengiktiraf perniagaan itu yang kebanyakannya dikendalikan dalam sistem konvensional.
UNICORN Internantional Islamic Bank Malaysia Bhd, anak syarikat Unicorn Investment Bank, syarikat pelaburan berpangkalan di Bahrain, sedang meninjau peluang untuk membeli kepentingan dalam sekurang-kurangnya sebuah institusi kewangan Islam di Malaysia.
Pengerusinya, Datuk Vaseehar Hassan Abdul Razack, berkata mandat diberikan syarikat induk Unicorn Internantional Islamic Bank Malaysia ialah untuk membeli kepentingan dalam bank di Malaysia, tidak mengira sama ada ia milik tempatan atau bank asing.
Sasarannya untuk membeli kepentingan antara 40 peratus hingga 70 peratus dengan anggaran pelaburan antara AS$100 juta hingga AS$200 juta.
Kami berharap dapat mencari bank yang sesuai dalam tempoh antara enam hingga 10 bulan ini, katanya ketika ditemui di Kuala Lumpur, baru-baru ini.
Katanya, sasaran pegangan ekuiti yang agak tinggi itu kerana adalah tidak berbaloi untuk mendapatkan kurang daripada kadar itu kerana proses pengambilalihan itu sendiri termasuk mencari bank sesuai bukan sesuatu yang mudah.
Unicorn Investment Bank sebelum ini pernah gagal mengambilalih kepentingan dalam Bank Islam Malaysia Bhd (BIMB) kerana tidak mencapai persetujuan dari segi harga.
Ketika ini, Vaseehar berkata, Unicorn International Islamic Bank berusaha memantapkan perniagaannya yang baru beroperasi kurang dari dua tahun di negara ini selepas mendapat lesen di bawah Inisiatif Kewangan Islam Antarabangsa Malaysia (MIFC) pada Januari 2008.
Lesen itu adalah untuk mengendalikan aktiviti urus niaga selain dalam mata wang ringgit.
Katanya, tumpuan diberikan untuk mengembangkan unit perbendaharaan yang sebahagian besarnya mengendalikan perniagaan pasaran wang berlandaskan Syariah.
Unit berkenaan ketika ini menyumbang 50 peratus kepada pendapatan institusi kewangan itu.
Produk yang ditawarkan adalah deposit menggunakan konsep ‘Wakalah’ atau wakil (agensi) yang hampir sama dengan konsep Murabahah di pasaran runcit.
Bagi memberi lebih banyak pilihan kepada pelanggan yang juga terdiri daripada syarikat korporat dalam dan luar negara, Vaseehar berkata, Unicorn membangunkan produk tukaran hadapan berasaskan konsep Wa’ad yang berfungsi sebagai pelindung nilai.
Beliau memberi jaminan produk itu diperkenalkan tidak lama lagi.
Vaseehar menjelaskan, pengenalan produk Perbendaharaan berlandaskan Syariah memberi sedikit cabaran kepada Unicorn International Islamic Bank kerana sebahagian besar institusi Islam dunia, termasuk di Asia Barat belum mengiktiraf perniagaan itu yang kebanyakannya dikendalikan dalam sistem konvensional.
IDB bantu pengeksport Malaysia
IDB bantu pengeksport Malaysia
Oleh Kamarulzaidi Kamis
kamarulzaidi@bharian.com.my
BANK Pembangunan Islam (IDB) menerusi Exim Bank Malaysia Bhd memperuntukkan dana khas AS$100 juta (RM354 juta) untuk membantu membiayai pengeksport dari negara ini mengeksport ke negara Pertubuhan Persida-ngan Islam (OIC).
Pengarah Serantaunya di Malaysia, Ahmed Sales Hariri, berkata peruntukan itu dibuat untuk menjayakan mandat yang digariskan di bawah Rangka Tindakan 10 tahun OIC, iaitu meningkatkan perdagangan antara OIC sebanyak 20 peratus menjelang 2015.
“Malaysia menjadi peserta utama dalam perdagangan antarabangsa, justeru adalah amat bersesuaian dana pembiayaan perdagangan khas dibentuk bagi mengutamakan potensi itu,” katanya dalam satu sesi temu bual di Kuala Lumpur, baru-baru ini.
Hadir sama Pengurus Besar Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Dr Abdel Rahman Taha dan Penolong Pengurus Besar Pemasaran (Asia dan Negara Komanwel Merdeka) International Islamic Trade Finance Corporation (ITFC), Abou MS Jallow.
Ahmed Sales berkata, ia juga adalah sejajar hasrat Kerajaan Malaysia untuk meningkatkan perdagangan di kalangan negara Asia Barat serta Afrika, justeru, mengurangkan kebergantungan kepada perdagangan dengan Amerika Syarikat (AS), Eropah dan Jepun yang kini dilanda kegawatan.
IDB mengunjurkan jumlah perdagangan antara Malaysia dan OIC akan meningkat kepada AS$50 juta (RM177.381 juta) tahun ini berbanding antara AS$30 juta (RM106.43 juta) hingga AS$40 juta (RM141.91 juta) pada tahun sebelumnya.
Sementara itu, Abou berkata, negara Islam umumnya kagum dengan pencapaian ekonomi Malaysia dan badan kewangan perdagangan itu akan terus berusaha untuk meningkatkan aktivitinya di negara ini.
Katanya, tahun lalu, IDB menubuhkan ITFC sebagai sayap pembiayaan perdagangan bank pembangunan itu untuk menyedia pinjaman perdagangan berjumlah AS$3 bilion setahun kepada 56 negara anggota OIC.
Abdel Rahman pula berkata, sebahagian besar negara OIC kaya sumber asli, justeru membuka lebih banyak peluang kepada aktiviti perdagangan dan pelaburan.
Oleh Kamarulzaidi Kamis
kamarulzaidi@bharian.com.my
BANK Pembangunan Islam (IDB) menerusi Exim Bank Malaysia Bhd memperuntukkan dana khas AS$100 juta (RM354 juta) untuk membantu membiayai pengeksport dari negara ini mengeksport ke negara Pertubuhan Persida-ngan Islam (OIC).
Pengarah Serantaunya di Malaysia, Ahmed Sales Hariri, berkata peruntukan itu dibuat untuk menjayakan mandat yang digariskan di bawah Rangka Tindakan 10 tahun OIC, iaitu meningkatkan perdagangan antara OIC sebanyak 20 peratus menjelang 2015.
“Malaysia menjadi peserta utama dalam perdagangan antarabangsa, justeru adalah amat bersesuaian dana pembiayaan perdagangan khas dibentuk bagi mengutamakan potensi itu,” katanya dalam satu sesi temu bual di Kuala Lumpur, baru-baru ini.
Hadir sama Pengurus Besar Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Dr Abdel Rahman Taha dan Penolong Pengurus Besar Pemasaran (Asia dan Negara Komanwel Merdeka) International Islamic Trade Finance Corporation (ITFC), Abou MS Jallow.
Ahmed Sales berkata, ia juga adalah sejajar hasrat Kerajaan Malaysia untuk meningkatkan perdagangan di kalangan negara Asia Barat serta Afrika, justeru, mengurangkan kebergantungan kepada perdagangan dengan Amerika Syarikat (AS), Eropah dan Jepun yang kini dilanda kegawatan.
IDB mengunjurkan jumlah perdagangan antara Malaysia dan OIC akan meningkat kepada AS$50 juta (RM177.381 juta) tahun ini berbanding antara AS$30 juta (RM106.43 juta) hingga AS$40 juta (RM141.91 juta) pada tahun sebelumnya.
Sementara itu, Abou berkata, negara Islam umumnya kagum dengan pencapaian ekonomi Malaysia dan badan kewangan perdagangan itu akan terus berusaha untuk meningkatkan aktivitinya di negara ini.
Katanya, tahun lalu, IDB menubuhkan ITFC sebagai sayap pembiayaan perdagangan bank pembangunan itu untuk menyedia pinjaman perdagangan berjumlah AS$3 bilion setahun kepada 56 negara anggota OIC.
Abdel Rahman pula berkata, sebahagian besar negara OIC kaya sumber asli, justeru membuka lebih banyak peluang kepada aktiviti perdagangan dan pelaburan.
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