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    Overview of Islamic Finance

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    soorajdivakaran3650
    1) The document discusses Islamic finance, which prohibits interest and is governed by Shariah law sourced from the Quran and Sunnah. 2) Global coverage of Islamic finance is growing, with over $300 billion in assets across 50 countries, concentrated in the Middle East, North Africa, and Southeast Asia. 3) The case study examines Standard Chartered's strategy for establishing its Islamic banking division in Pakistan, including developing a distinct brand identity and implementing an aggressive marketing campaign to educate the public and change perceptions.

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    Overview of Islamic Finance

    Uploaded by

    soorajdivakaran3650
    1K views24 pages
    1) The document discusses Islamic finance, which prohibits interest and is governed by Shariah law sourced from the Quran and Sunnah. 2) Global coverage of Islamic finance is growing, with over $300 billion in assets across 50 countries, concentrated in the Middle East, North Africa, and Southeast Asia. 3) The case study examines Standard Chartered's strategy for establishing its Islamic banking division in Pakistan, including developing a distinct brand identity and implementing an aggressive marketing campaign to educate the public and change perceptions.

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    Presentation on Islamic finance all over the world

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    1) The document discusses Islamic finance, which prohibits interest and is governed by Shariah law sourced from the Quran and Sunnah. 2) Global coverage of Islamic finance is growing, with over $300 billion in assets across 50 countries, concentrated in the Middle East, North Africa, and Southeast Asia. 3) The case study examines Standard Chartered's strategy for establishing its Islamic banking division in Pakistan, including developing a distinct brand identity and implementing an aggressive marketing campaign to educate the public and change perceptions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    1K views24 pages

    Overview of Islamic Finance

    Uploaded by

    soorajdivakaran3650
    1) The document discusses Islamic finance, which prohibits interest and is governed by Shariah law sourced from the Quran and Sunnah. 2) Global coverage of Islamic finance is growing, with over $300 billion in assets across 50 countries, concentrated in the Middle East, North Africa, and Southeast Asia. 3) The case study examines Standard Chartered's strategy for establishing its Islamic banking division in Pakistan, including developing a distinct brand identity and implementing an aggressive marketing campaign to educate the public and change perceptions.

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    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 24

    THE WORLD OF ISLAMIC FINANCE

    CONTENTS
    Evolution of Institutional Framework

    Facts & Figures

    Global Coverage

    Muslim Population

    Institutions

    Global Outlook

    Islamic Finance In India

    Standard Chartered Case Study

    Conclusion
    Introduction
    • Islamic Finance is governed by the Shariah (Islamic Law),
    sourced from the Quran and the Sunnah

    • The Islamic law (Shariah) prohibits taking or giving interest


    (Riba) which is the most essential feature of Islamic banking

    • The basic sources of Shariah principles are the ‘Quran’ and


    the ‘Sunnah’, which are followed by the consensus of the
    jurists and interpreters of Islamic law

    • Profit sharing and fee-based financing approaches have


    developed in compliance with Shariah laws.

    • These special modes of financing have emerged in retail,


    private and commercial banking for debt and capital
    markets, insurance, asset management, structured and
    Shariah Prohibits
    • Riba, which is taking or giving of interest

    • Gharar, which is uncertainty about the terms of contract or


    the subject matter, e.g. prohibits selling something which
    one does not own

    • Investment in businesses dealing in alcohol, drugs,


    gambling, armaments, etc. which are considered unlawful
    or undesirable

    • Masir, which is involvement in speculative and gambling


    transactions
    Evolution of Institutional
    Framework
    Facts & Figures-Evolution
    Global Coverage
    Facts & Figures
    • More than 300 Islamic Financial
    Institutions (IFIs) in
    approximately 50 countries
    • Total assets and funds under
    management (AUM) exceeding
    USD 300 billion
    • 10-15% growth over past 10
    years
    • Prevalent in all dimensions of
    financial services:
    Debt and capital markets
    including mutual funds
    Insurance
    Asset Management
    Structured and Project
    Financing
    Derivates, etc.
    • Market mainly concentrated in
    Islamic countries of the Middle
    East, North Africa and South-east
    Asia
    • Gained popularity in Muslim-
    minority countries, e.g. US, UK
    Institutions worldwide
    working on an interest free basis
    • International Banks •International Banks (Islamic
    window)
    • Bank of Islam Malaysia • ABN Amro
    • Dubai Islamic Bank • Barclays Bank
    • Qatar Islamic Bank • BNP Paribas
    • Abu Dhabi Islamic Bank • Citi Islamic Investment Bank
    Qatar International Islamic
    • • Deutchse Bank
    Bank • HSBC Amanah
    • Shamil Bank • Lloyds TSB
    • Jordan Islamic Bank • Standard Chartered Saadiq
    • Bank Aljazeera
    • Bank Albilad
    Islamic Financial Institutions in India
    Non-Banking Financial Brokerage Houses
    Companies

    • Al-Falah Investments Ltd • Idafa Investments Pvt. Ltd


    •Al-Ameen Islamic Financial & • Parsoli Corporation Ltd
    Investment corp. (India) Ltd
    Al-Barr
    • Finance House
    Limited
    • Bank Muscat International
    • Seyad Shariat Finance
    Islamic Finance Deals In India
    Middle East and North Africa

    • 204 million Muslims GCC countries, UAE, Iran, Egypt (13% of


    total Muslim population)

    • GCC (excluding Oman): 17 commercial banks offering Islamic


    banking. Islamic AUM USD 100 billion

    • Oman: The government has discouraged Islamic banking

    • UAE: 15% ( USD 37 billion) of banking assets under Islamic


    laws. Expected to grow to 20% by the end of 2010

    • Iran: 100% banking is as per Islamic laws, USD 35 billion

    • Egypt: Prominent Egyptian Islamic investment companies


    collapsed in the late 1980s and the concept is not
    encouraged by the government
    South East Asia

    • 16 million Muslims in Malaysia and 195 million Muslims in


    Indonesia (13% of total Muslim population)

    • Malaysia: AUM USD 31 billion. The Islamic money market in


    Malaysia channels funds ranging from USD 8 – 12 billion
    monthly. Issued 60% of the world’s total Sukuks in 2006

    • Indonesia: Only 1.2% of total banking assets under Islamic


    Finance
    Others

    • 439 million Muslims in India, Pakistan, and Bangladesh


    (28% of the total Muslim population)

    • 16 million Muslims in UK, US, Germany and France

    • India: Only a few Non-Banking Financial Institutions operate


    on the Islamic system

    • Pakistan: 11 banks offering Islamic products. AUM USD 3


    billion at the end of 2006. Expected to increase from 3% to
    12% by the end of 2012

    • Bangladesh: 10% of the total deposits under Islamic


    banking system
    Case Study
    Pakistan’s Islamic banking
    scenario
    Islamic Banks Islamic Banking Division

    • Meezan Bank • NBP


    • ABN AMRO
    • Al Baraka
    • UBL
    • Bank Islami • Askari
    • DIB • PICCIC
    • Emirates Global • Crescent
    • Dawood Islamic • MCB
    • Alfalah
    • SCB
    • Bank AlHabib
    • Habib AG Zur.
    • Metropolitan
    • Bank of Khyber
    • Soneri Bank
    • HBL
    5 Myths of Pakistan’s Islamic Banking
    Industry
    • Myth #1: A Conventional Bank should operate its Islamic
    Banking Operations in a passive manner.

    • Myth #2: Product Innovation will be done by full fledged


    Islamic Banks

    • Myth #3: Customers are indifferent regarding Islamic and


    conventional products when the product is offered by a
    renowned bank.

    • Myth #4: A conventional bank should never aggressively


    Market its Islamic Products as it will create a negative
    impact on its conventional products.

    • Myth #5: Increasing customers’ awareness and managing


    The
    Islamic
    Brand
    Identity
    and Tag
    Line
    SCB’s Strategy
    • Once SCB developed the Brand Identity , in order to change
    consumer perception they went ahead with implementing
    the Marketing Concept based upon the :

    4 Ps of Islamic Banking

    • Product: To be Shariah Compliant, innovative, customer


    friendly yet profitable

    • Price: To be competitive with the market and definitely not


    expensive than the relevant conventional product of the
    Bank- No COBM!

    • Place: The Islamic Branch should be at a central location


    and its outlook should reflect Bank’s commitment towards
    the Islamic Banking initiative.
    The
    Islamic
    Branch
    The 4th P
    • Promotion: The promotional strategy should be aggressive
    and should have the following features:

    • Campaign should be in line with the modern day


    promotional campaigns. But should be Shariah Compliant
    as well.

    • The campaign should create awareness about Islamic


    Banking Concepts and remove the misconceptions and
    confusions about Islamic Banking.

    • Educating the masses about the global growth of Islamic


    banking- Global Islamic banking Video.
    Conclusion
    • Big opportunities, Big Challenges

    • Product Innovation

    • Risk

    • Talent

    • Regulation

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