Firms involved in Islamic finance are lobbying the British government for tax reforms, arguing that the treatment of some sharia-compliant structures is hindering their growth.
Britain has actively pursued Islamic finance to become the Western world's biggest hub for it and banks are now seeking to ensure tax parity in areas such as mortgage refinancing as they compete head-on with their conventional peers.
The global Islamic finance industry grew to be worth more than $2.4 trillion by the end of 2017, according to a new report.
The Global Islamic Finance Report (GIFR) 2018, which is scheduled to be launched at the Astana Islamic Economic Forum next month, showed the sector saw 6 percent growth last year.
According to GIFR 2018, 2017 was the fourth consecutive year that the industry registered a single digit growth and the fifth consecutive year that the growth rate has been on a declining trend.
Many African countries have been on the brink of an Islamic banking boom for almost a decade, however development has been somewhat stunted. This is not through lack of demand. Islam first spread its prayer mats in Africa in the early seventh century, and today it is thought that a third of the world’s Muslim population call the continent home. Still, Islamic finance remains at an embryonic stage.
Morocco is preparing to issue its first sovereign Islamic bond, or sukuk, worth 1 billion dirhams ($105 million) in the coming weeks after adopting a regulatory framework governing sukuk sales, Finance Minister Mohamed Boussaid said on Thursday.
"The legal framework is now prepared for Morocco to issue its first sovereign sukuk in the coming weeks," Boussaid told Reuters by phone.
If super funds continue to spurn local infrastructure investment in favour of offshore assets, managing director of Crescent Wealth, an Islamically compliant superannuation fund, Talal Yassine believes the Islamic finance market should help make up Australia's shortfall.
Mr Yassine has hit out at lack of infrastructure investment as "intergenerational theft", calling on the federal government to tap the growing market for Islamic finance to fund a nearly $1 trillion shortfall in infrastructure spending.
A total of $12 billion worth of Sukuk was issued in March 2018, bring global Sukuk issuance to $30 billion in Q1 2018—a 44.4 per cent surge from $20.8 billion for the same period last year, according to the latest statistics by RAM Ratings.
The increase is likely due to a boost from Saudi Arabia with issuance reaching $6.5 billion as at end-March 2018 as compared to $184.8 million at the end of March 2017, marking the highest growth, according to the Khaleej Times.
WHILE slower economic growth brought on by the lower price of oil has reduced growth opportunities and hindered the performance of the GCC’s banking systems, Mohamed Damak, Head of Global Islamic Finance at S&P Global Ratings, believes the profile of Islamic banks will, absent any major risks, will stabilize this year.
While overall lending growth of GCC banks slowed in 2017, Islamic banks saw rapid growth of 6.9% compared with 3.7% growth seen in conventional banks over the same period. This was mainly supported by a strong performance in a few Islamic banks particularly in Kuwait and the UAE.
The International Monetary Fund will incorporate Islamic finance into its financial sector assessments of select countries starting next year, aiming to improve regulation in the growing sector.
The IMF has traditionally focused on conventional banking, but it has been increasingly engaging with regulators in countries where Islamic finance is now deemed to be systemically important.
A London mosque is thought to be the first in the world to accept bitcoin donations, one month after an Islamic scholar declared the cryptocurrency permissible under Sharia Law.
The Shacklewell Lane Mosque in Hackney announced that it is hoping to raise at least £10,000 in cryptocurrency donations over Ramadan, through both bitcoin and ethereum. Muslims are asked to give away 2.5 per cent of their wealth during the 30-day festival as part of zakat.
The Japanese supervisory body has allowed banks under its watch to engage in so-called Islamic finance at their overseas branches starting this month. It was previously allowed only at their subsidiaries. Acting early will further secure Japan's rightful place as a leading financial market in a fast evolving global system. It will also strengthen links with the Middle East and Southeast Asia -- two of Japan's fastest growing export markets.