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Monthly Archives: July 2010
July 23, 2010
DR. ZULKIFLI HASAN
High Islamic banking fees irk customers in South Africa
High Islamic banking fees irk customers in S. Africa
By MUSHTAK PARKER | ARAB NEWS Available at:
http://arabnews.com/economy/islamicfinance/article86412.ece
CAPE TOWN: It is not only some South African government officials, cadres of the ruling African National Congress (ANC) and high ranking officers of state utilities, that are on the gravy train. Perhaps the biggest greed culture is amongst South African banks whose banking charges and fees are the highest in developed countries. Unfortunately, Islamic banks and windows in South Africa are no exceptions, fueling further cynicism about Islamic banking in the country.
For the ANC government, who refused to go to the International Monetary Fund (IMF) for financial loans on the grounds of revolutionary ideology when Nelson Mandela became the first black president of the new South Africa in the early 1990s, it is the ultimate irony that successive administrations have failed to rein in the banks who even charge people to deposit and withdraw cash from their current accounts. Investec, for instance will charge customers 11 rands for withdrawing every 1,000 rands. Banks have a litany of fees and service charges, and some so-called free banking services are either highly conditional or peripheral – charges which many customers take for granted as free in the UK and European Union. For instance, First National Bank (FNB’s) Islamic check account must have a minimum of 3,500 rands before qualifying for free banking.
With both retail and business customers complaining bitterly about the ever-rising fees and customers, the government of President Jacob Zuma has started to put pressure on the banks to lower their charges and fees. ANC stalwarts such as Seddick Isaacs, who spent 13 years on Robben Island with Nelson Mandela and the other ANC hierarchy as a fellow “prisoner of apartheid” and who taught President Zuma, a fellow inmate, regret what they call the emergence of a “corporatocracy” in South Africa.
The big corporates including the banks, they suggest, are still controlling the South African economy and financial system, and effectively riding roughshod over the government. They remain powerful and exert strong influence over government policy. In many respects social and economic apartheid is very much alive in South Africa, almost 17 years after the ANC was first elected to power.
Muslim members of the ANC, including some high-ranking ones, agree that the situation is unsustainable, and is exacting a heavy cost for ordinary South Africans, especially at a time of economic and financial uncertainty. Only last week, Gill Marcus, the governor of the Reserve Bank of South Africa, the central bank, warned that the global economy, especially the US and the European union, may be heading for double-digit recession, which would inevitably impact upon the South African economy.
Islamic banks such as Albaraka Bank (South Africa) and the Islamic banking windows of FNB, ABSA, Nedbank and Standard Bank have come under heavy criticism from Muslim customers from following the greed culture of conventional banking and in some cases actually charging higher fees and service charges than their conventional counterparts.
FNB, for instance, in its Shariah-compliant business check account, says it offers similar features and pricing to the (mainstream conventional) business check account. “The main differences,” according to the FNB, are that “juristic entities must have a minimum balance of 1,000 rands. Sole proprietors must have a minimum balance of 750 rands. There is no debit or credit interest, and there is no overdraft facility.”
It is Albaraka Bank, which is part of the Bahrain-incorporated Albaraka Banking Group (ABG), which in turn is a subsidiary of the Dallah Albaraka Group, headed by Saleh Kamel, that has come under a fair bit of criticism, especially from its Muslim customers and organizations.
They point to a litany of charges by Albaraka Bank including the increase of a monthly penalty from 3 rands to 75 rands if an account remains inactive; a 10 rands fee for cash withdrawals up to 2,500 rands; 45 rands for each check withdrawal; a fee of 0.75 rand for each 100 rands cash deposit or part thereof; 20 rands for a post-dated check deposited; to 100 rands for an unpaid check and a host of other fee categories and charges.
South African bankers privately concede that their charges are the most expensive in developed economies, but they blame the Reserve Bank of South Africa for lack of clarity in terms of policy and a lack of political will to deal with the situation.
The government of President Thabo Mbeki did set up a few years ago a commission to look at the high fee structures that banks were charging. But the half-hearted approach to the issue meant that the commission dragged its feet and any policy change was effectively still-born because of this political inertia.
Not only are customers of banks at the receiving end of this greed culture, but also bank employees. For instance, in the past bank employees used to get free banking services on credit cards or ATM withdrawals. But last year Nedbank for instance introduced a 50 percent charge of the usual tariff for Bank employees for the above products.
The South African economy has had less of an impact as a result of the global financial crisis and the credit crunch. But local banks as elsewhere have clamped down on lines of credit that has made it difficult for especially small-and-medium-sized-enterprises (SMEs) who are faced with severe cashflow and liquidity problems.
Islamic banking could have filled this void to a certain extent, but the providers of Islamic banking in South Africa not surprisingly are over-cautious and taking their cue from counterparts in other countries in the developed world.
South Africa has a Muslim population of over two million and many of them are well established in business and in the professions. In Durban, they even have a Muslim millionaires club. Private wealth amongst South African Muslims – largely of Indian and Malayan origin – has increased substantially especially since the collapse of apartheid.
But the uptake of Islamic financial products by these Muslim-owned businesses is at best ordinary. Local experience of ownership of Islamic banks is not good following the collapse of Islam Bank Ltd. in the 1990s.
There is still much naivety about Islamic banking amongst the Ulema and the ordinary Muslims, with basic assumptions such as “cost of capital” and “development costs” conveniently ignored by those critical of Islamic banks per se.
The absence of the big global Islamic banks is also a factor because competition amongst the local windows and the sole Islamic bank, Albaraka Bank, is not as healthy as in other markets.
HSBC is reported to be considering a bid for Nedbank. If the deal goes through HSBC Amanah may well be set to become South Africa’s “local Islamic bank” given the latent demand for Islamic bank in South Africa and the surrounding southern African countries. After all, HSBC Amanah is a dominant player in markets in the GCC and Malaysia.
Best Regards

ZULKIFLI HASAN

DURHAM, UK
Cape of Good Hope, Cape Town, South Africa
Islamic finance news
2 Comments
July 19, 2010
DR. ZULKIFLI HASAN
The $1 Trillion Islamic Finance Market
Gulf and Asian Centers Battle Over Islamic Finance
By Mark Townsend Available at:
http://www.institutionalinvestor.com/asset_management/Articles/2629757/Gulf-and-Asian-Centers-Battle-Over-Islamic-Finance.html
In the aftermath of the global financial crisis, the prospects for Islamic finance appear brighter than ever. The industry boasts an estimated $1 trillion in assets, and Islamic banking — untouched by subprime-mortgage-backed securities and other toxic assets that devastated many Western institutions — continues to grow at a rate of about 20 percent a year. Financial centers from Bahrain and Dubai in the Persian Gulf to Malaysia and Singapore in Asia are moving to improve their regulatory frameworks in a bid to win a bigger piece of the pie.
Yet much of the industry’s potential remains untapped. And the competition itself may be part of the reason, bankers and analysts say.
A lack of consistency in the interpretation of Islamic law by scholars who decide if a product complies with shari’a principles is holding back the development of a vibrant capital market and asset management business. The industry must resolve differences between the secular element of contracts frequently based on English common law and a shari’a board’s interpretation of the same contract if conventional money managers are to see long-term value in Islamic finance, an essential element for future growth. Among other things, shari’a bans the charging of interest and requires that loans be structured on a profit-sharing basis.
“There is a need for standardization and uniformity,” says Arul Kandasamy, head of investment banking at Abu Dhabi Commercial Bank. “We cannot rely on shari’a scholars, as they have a vested interest in retaining the status quo. Governments and regulators have primary responsibility for resolving this situation.” Similar concerns temper the optimism of Mohieddine Kronfol, managing director of Algebra Capital in Dubai. “Shari’a-compliant assets are more than $1 trillion, but legal and market infrastructure as well as corporate governance standards are current and very relevant challenges facing Islamic finance,” he says.
The Islamic fund management business has total assets of just $52 billion, a fraction of the $22 trillion handled by conventional money managers, according to a recent report by accountants Ernst & Young. Most of the funds have less than $100 million under management, the threshold needed to achieve profitability, the firm says. The small size of the funds also limits their ability to match the variety and quality of conventional investment funds, it adds.
The market for sukuk, or Islamic bonds, shows signs of recovering from the blow dealt by Dubai’s near default last year, but the market remains a fraction of the size of the conventional fixed-income market. Sukuk issuance totaled $5.6 billion in the first five months of this year, up slightly from $5.3 billion in the same period of 2009.
The Dubai property developer Nakheel came close to defaulting on its $3.52 billion sukuk — the largest ever — before Abu Dhabi stepped in to bail out Dubai. The company’s debt problems raised doubts among investors about the ability of sukuk holders to seize control of assets backing the bonds in the event of a default — doubts that have yet to be resolved, bankers and analysts say. The region’s credit problems continue to weigh on the sukuk market. Gulf corporations are facing a wall of debt coming due, with $145 billion outstanding and $28 billion scheduled to mature in 2012, the bulk of it for companies in the United Arab Emirates, according to Moody’s Investors Service. It’s little surprise, then, that Malaysian entities are dominating the sukuk market, accounting for slightly more than half of global issuance this year through May.
“The cost of structuring and issuing sukuk remain high relative to conventional” bonds, says Nasser Saidi, chief economist of the Dubai International Financial Centre. “The lack of uniformity and certainty is also curbing and inhibiting innovation.”
Notwithstanding the problems, countries across the Gulf region and Southeast Asia are targeting the industry for growth and hoping to establish themselves as major centers for Islamic finance. “From our perspective, the exciting thing is, so many countries are focused on Islamic finance,” says Afaq Khan, the Dubai-based CEO of Standard Chartered Saadiq, the Islamic banking subsidiary of Standard Chartered Bank. “That can only be positive for industry growth.”
For many years, Bahrain has led the Gulf region by devising supportive Islamic and tax regulations that have boosted its reputation as a leading banking center. Bahrain has 28 Islamic financial institutions, the largest such concentration of any country, according to Kamal Ahmed, chief operating officer of the Bahrain Economic Development Board. Total assets in Bahrain’s Islamic banking sector jumped by nearly 50 percent last year, to $24.5 billion. As recently as 2000, assets totaled just $1.9 billion. Bahrain is also home to 47 Islamic investment funds with total assets of $2.15 billion, according to Ernst & Young.
The country regards a strong regulatory environment as a competitive advantage. The highly regarded Central Bank of Bahrain regulates the sector; its forerunner, the Bahrain Monetary Agency, was the first central bank in the world to develop and issue sukuk. The central bank has also moved to address the shortage of trained professionals in the industry by establishing the Waqf Fund for Research, Education and Training in 2006. The Bahrain Institute for Banking and Finance recently launched a master’s program in Islamic finance in conjunction with DePaul University.
“Bahrain is an important regional financial center and offers a well-established legal and regulatory framework and good ancillary services to support the financial services sector,” says Ikbal Daredia, who heads capital markets, institutional banking and the Malaysian arm of Unicorn Investment Bank in Bahrain.
Bahrain officials say they are eager to work with other financial centers to establish common standards and help overcome the fragmentation that is holding back the growth of Islamic finance. Fund managers in particular identify the lack of connectivity and a transparent screen-based trading platform as significant barriers to the growth of the Islamic fund business.
“We need to work with other countries to get appropriate regulatory structures for Islamic finance in place,” says the Economic Development Board’s Ahmed. “We are working with others, of which Malaysia is a big player, to develop the Islamic banking equivalent of Basel II.”
Dubai had sought to challenge Bahrain’s leadership in the Gulf with a raft of sukuk issues in 2006 and 2007. Nasdaq Dubai is one of the world’s largest exchanges by listed value of sukuk, with 20 issues worth a total $16.3 billion. The emirate faces an uphill climb to regain momentum, however, following the recent debt crisis and the restructuring of Dubai World’s $23.5 billion in borrowings.
Giambattista Atzeni, corporate trust business manager for the Middle East and North Africa at Bank of New York Mellon Corp., notes that Dubai has focused on international sukuk issues, many dollar-denominated, while Bahrain has concentrated on local currency offerings “and has a great track record in government deals.”
The emirate still has some ways to go if it is to become a serious regional contender, says ADCB’s Kandasamy. Most of Dubai’s sukuk offerings have been real estate plays, and the emirate’s regulatory framework lags behind that of Bahrain, he says. “Bahrain has taken the right steps to close the gap with Malaysia, but its small domestic market will constrain further growth,” says Kandasamy.
There are 12 Islamic funds domiciled at the Dubai International Financial Centre, with combined assets of $580 million. High costs are one key barrier to growth, officials acknowledge. Late last year the Dubai Financial Services Authority issued a report on collective investment funds that raised eyebrows when it stated that the DIFC was the most expensive financial center in the world.
By many measures, Saudi Arabia is rapidly becoming the biggest Islamic financial center in the Middle East, although its market is almost entirely domestic in focus. The kingdom boasts 174 Islamic funds with a total of $22.7 billion in assets, according to Ernst & Young. There has been a major trend toward Islamic banking, which was virtually unheard-of in the country a decade ago, notes Paul Gamble, head of research at Jadwa Investment in Riyadh. “New banks launched in recent years are 100 percent Islamic, as are virtually all the local investment companies,” he says. Saudi entities are also beginning to wade into sukuk in a big way, a potentially significant development for that market. Saudi Electricity Co. raised $1.9 billion in May with a sukuk priced to yield 95 basis points over the Saudi interbank offered rate.
Notwithstanding the efforts of the Gulf countries, Malaysia continues to claim the world’s largest Islamic capital market. The country has integrated the Islamic sector into its broader financial system, providing institutions as well as intermediaries a deep market in shari’a-compliant equities, sukuk, exchange-traded funds, real estate investment trusts and derivatives. At the end of 2008 (the most recent figures available), Malaysia’s Islamic banking assets had reached $72.5 billion, according to the Malaysia International Islamic Financial Centre. The country boasts 184 Islamic funds with assets totaling $5.1 billion, according to Ernst & Young. Shari’a-compliant companies make up 63 percent of the Bursa Malaysia’s 1.06 trillion-ringgit market capitalization.
Malaysian entities accounted for 53.4 percent of global sukuk issuance in the first five months of this year, according to Dealogic. The government itself has led the way by issuing a $1.25 billion sukuk, the largest ever by a Malaysian borrower, in May.
“Local investors’ demand and established market infrastructure has supported issuance, while local players such as Petronas and Khazanah have successfully issued large cross-border sukuk, raising capital abroad,” says BNY Mellon’s Atzeni. Kandasamy of ADCB agrees that Malaysia’s depth and sophistication give it a firm lead over the Gulf centers. “Malaysia has the best capability due to its advanced regulatory environment, strong government support and large pool of educated professionals to support growth,” he says.

For the Gulf to match the depth of the Malaysian market, it will need to establish more common standards to increase trading activity and attract new investors, industry experts say. Adopting a benchmark index like LIBOR would immediately improve transparency and liquidity and create clarity for conventional investors. “There is a consensus among scholars and market practitioners that a conventional benchmark index such as LIBOR can be applied to Islamic finance operations,” says Mohamad Nedal Alchaar, secretary general of the Accounting and Auditing Organization for Islamic Financial Institutions, in Bahrain. “Nevertheless, in the long term it will benefit the Islamic finance sector to have its own benchmark index.”
Malaysia’s success is spurring imitation in Asia, most notably by neighboring Singapore. The city-state is targeting Islamic finance in a bid to expand its financial center. The Monetary Authority of Singapore is extending its existing regulatory framework to the shari’a-compliant sector. “Our approach is to treat conventional and Islamic financial products similarly, as long as they share similar risk characteristics,” a spokesperson for the central bank says.
Recent regulations by the MAS allow Singapore-based banks to enter into Istisna financing transactions, a shari’a-compliant method of financing construction projects. The move appears designed to allow the country’s banks to participate in an expected surge of financing for major infrastructure work in the Gulf Cooperation Council, a bloc that encompasses Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. “The GCC are heavily investing in infrastructure, with $2 trillion of infrastructure investment over the coming five to seven years,” notes the DIFC’s Saidi.

Although Islamic finance is growing at an annual pace of about 20 percent, it remains a very small part of the overall market. Singapore has 13 Islamic funds managing a total of $760 million in assets, compared with $610 billion in assets run by conventional fund managers.
Elsewhere in Asia, Hong Kong has begun to look at Islamic finance with greater seriousness. It could be a shrewd move. The growing trade relationship between China and the GCC, particularly in energy, offers a rich possibility for Islamic finance projects. “Hong Kong has talked about strengthening its credentials as an Islamic financial center,” says Ben Simpfendorfer, chief China economist at Royal Bank of Scotland in Hong Kong. “This shouldn’t be interpreted as competing with Malaysia and Singapore. Hong Kong is hoping to profit from Islamic bond issuance by mainland Chinese corporates.”
With so much competition for leadership in Islamic finance, will there be enough business to go around? A little more cooperation to address some of the industry’s shortcomings could help grow the market for everyone.
Best Regards

ZULKIFLI HASAN

DURHAM, UK
Osaka Castle (1583), Japan
Islamic finance news
5 Comments
July 13, 2010
DR. ZULKIFLI HASAN
Thomas Cook fails in USD50 million Islamic bond bid
Thomas Cook fails in $50 mln Islamic bond bid
By Frederik Richter Available at:
http://business.maktoob.com/20090000488854/Thomas_Cook_fails_in_$50_mln_Islamic_bond_bid/Article.htm
MANAMA – Travel firm Thomas Cook has failed to place a $50 million aircraft finance Islamic bond with Gulf region investors, three bankers said, marking the failure of what would have been the first European corporate sukuk. Three bankers said the five-year sukuk, called the Golden Age sukuk, was marketed to Saudi investors by lead arranger Wasatah Capital, a Saudi investment company, but was called off last month after it failed to gain interest in the kingdom partly because the yield offered of 7 percent was seen as too low.
The private placement was also unrated and seen as too illiquid to be attractive to Islamic banks’ treasuries in the kingdom and elsewhere in the Gulf where it was marketed after it fell through in Saudi Arabia.
“There was limited access, it was a small issue and they didn’t pay enough,” said a Bahrain-based banker familiar with the planned sale who did not wish to be named. While small in size, a successful placement of the issue could have attracted more European corporates to tap funds in the world’s top oil exporting region through Islamic finance, bankers said. “They were going to great length outside Saudi Arabia to find a solution. They looked everywhere, really,” the banker said.
Bankers said the issue was also hit by a freeze of emerging bond markets triggered by the European debt crisis in May, with other bond issues in the Gulf Arab region being postponed as well. An official at Wasatah declined to comment, citing regulations by Saudi Arabia’s Capital Markets Authority (CMA). Wasatah, partially owned by Malaysian investment bank Kenanga, is an investment company licensed by CMA.
INVESTMENT RESTRICTIONS
The market for sukuk is expected to reach more than $26 billion in new issuance this year. Sukuk are structured around underlying assets that generate the cash-flows needed to pay investors. The Golden Age sukuk was structured as an ijara sukuk, a leasing structure. Its purpose was to finance two aircrafts used by Condor, a German unit of Thomas Cook, according to an offering circular. A spokesman for Condor, to which Thomas Cook referred Reuters queries, could not immediately comment.
Best Regards

ZULKIFLI HASAN

DURHAM, UK
Kyoto, Japan
Islamic finance news
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July 9, 2010
DR. ZULKIFLI HASAN
Demystifying the Myth of Shortage of Shari’ah Scholars
Assalamualaikum,
Dear readers,
I am very delighted to share with you my recent article in the Global Islamic Finance Magazine (GIFM) July Issue pp66-67. The GIFM is a London-based leading magazine that provides news, knowledge and information on Islamic finance. This article attempts to demystify the mundane assumption or myth about shortage of Shari’ah scholars that available in the market. For full article, click here:
http://content.yudu.com/Library/A1o6ii/ComplimentaryGlobalI/resources/66.htm
“The ink of the scholar is more sacred than the blood of the martyr”
Best Regards

ZULKIFLI HASAN

DURHAM, UK
Cordoba, Spain
Islamic finance news
My recent publication
My Thought
1 Comment
July 3, 2010
DR. ZULKIFLI HASAN
10 Great British brands No longer British
10 great British brands no longer ‘British’
By Donna Werbner Available at:
http://uk.biz.yahoo.com/02072010/389/10-great-british-brands-sold-foreigners.html
Tate & Lyle was bought this week by American Sugar Refining. Donna Werbner takes a look at other iconic British brands that no longer have the right to call themselves ‘British’.
If you are reading this while enjoying a Kitkat and a cup of Tetley’s tea with a teaspoon of Tate & Lyle sugar in a Wedgwood teacup that you bought from Harrods, you might think you are doing something quintessentially British.
You’d be wrong.

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The fact is, Kitkat is owned by the Swiss company Nestle, Tetley’s tea is owned by India’s Tata Group, Wedgwood was sold to an American private equity firm last year, Harrods was bought by the State of Qatar for £1.5bn in May, and Tate & Lyle was sold this week to American Sugar Refining for £211m.
Here, we take a look at some of the other great British brands who can no longer call the Queen their own:
1) Boots
Established in Nottingham in 1849 by John Boot, Boots was first sold to a foreign company in 1920 when Jesse Boot flogged it to the American United Drug Company. Part of Alliance Boots since 2006, it is now owned the Italian tycoon Stefano Pessina and the American private equity firm KKR.
2) Rolls Royce cars
Charles Rolls and Henry Royce started manufacturing cars in Derby in 1906, selling cars that are worth £71,100 today for just £890. In 1973, Rolls Royce Motors was bought by Sheffield engineering firm Vickers and 1998, it was sold to German company BMW.
3) Cadbury
John Cadbury began producing and selling tea, coffee and drinking chocolate in Birmingham in 1824, and in 1854 he and his brother received the Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria. Cadbury merged with drinks company Schweppes in 1960 and was bought by America firm Kraft this year for £11.5bn.
4) Bentley cars
In 1919, Walter Owen Bentley, a World War One captain in the Royal Naval Air Service, started manufacturing Bentley automobiles in Cricklewood, North West London. It was sold to Rolls Royce during the Great Depression in 1931 in a deal so secretive not even Bentley himself knew the true identity of the purchaser until the transaction was completed. Since 1998, the firm has been owned by German carmakers Volkswagen.
5) Jaguar
Motorcycle enthusiasts Sir William Lyons and William Walmsley manufactured the first Jaguar 2.5 litre saloon in 1935 in Coventry. In the early 1950s, Lyons invested heavily in motor racing in a bid to increase Jaguar’s appeal to ordinary motorists, resulting in historic victories for Jaguar at Le Mans in 1951 and 1953. In 1999, American conglomerate Ford Motors bought the company and then sold it during the recession to Indian firm Tata motors for £1.7bn in 2008.
6)  Walkers crisps
Henry Walker started off as a pork butcher in Leicester – but after World War Two rationing of meat forced him to turn to another, additional form of revenue: the un-rationed potato. The company was so successful at making Walkers crisps that it kept its focus on potato chips when meat was de-rationed in 1954. Walkers was bought by Fortune 500 American firm PepsiCo in 1989 and is now worth around £436million. It still sells 10 million packets a day in the UK.
7) Smarties/Aero/Rolo/Fruit Pastilles
In York in 1863, Henry Rowntree and his brother Joseph founded Rowntree’s and began manufacturing chocolates. Rowntree’s was responsible for iconic British Empire favourites like Smarties, Aero, Fruit Pastilles, Yorkie and Black Magic. In 1988, Swiss confectionary giant Nestle bought the company for $4.55bn and has dropped the Rowntree name from all packaging except Rowntree’s Cocoa and its famous Fruit Pastilles.
8) Mini
In the wake of the fuel shortage caused by the 1958 Suez crisis, the British Motor Corporation decided to design a new car to meet growing demand for small ‘German bubble’ cars. The Mini launched in 1959 and featured heavily in the iconic British film The Italian Job in 1969. It was sold along with Rover to German carmaker BMW in 1994.
9) Harry Ramsden
Harry Ramsden set up his first fish and chip shop in a wooden hut in West Yorkshire in 1928 and was so successful that, three years later, he was able to move into a ‘fish and chip palace’, complete with oak panelled walls and chandeliers. In 1999, the firm began expanding into motorway locations and in 2006 was sold to Swedish firm EQT Partners as part of a deal worth £1,822 million.
10) HP Sauce
Nottingham grocer Frederick Gibson Garton invented HP sauce in 1895. He called it HP because he’d heard a rumour that a restaurant in the Houses of Parliament was serving it to MPs – hence the label on the bottle (which shows a picture of the Houses of Parliament). Despite this continued emphasis on the British origins on the brand, HP sauce has actually been owned by the American food giant Heinz since 2005.
Regards

ZULKIFLI HASAN

DURHAM, UK
Dubai International Financial Centre
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SYARIAH COURT SYARIAH COURT

CRIMINAL PROCEDURE CRIMINAL PROCEDURE

ENACTMENT OF SELANGOR ENACTMENT OF SELANGOR

(AMENDMENT) 2003. (AMENDMENT) 2003.

CONTENTSCONTENTS

�� INTRODUCTIONINTRODUCTION

��RIGHT OF AN ARRESTED RIGHT OF AN ARRESTED

PERSONPERSON

��BAILBAIL

��CONCLUSIONCONCLUSION

Right of arrested personRight of arrested person

�� Before trialBefore trial--

�� right to be presumed innocentright to be presumed innocent-- AlAl--asl asl

baraatuzimmahbaraatuzimmah

� Let ten guilty men be acquitted
than one innocent man be
convicted.””””

�� Right to be produced b4 judge without Right to be produced b4 judge without

unnecessary delayunnecessary delay-- s 22s 22

ContCont……

�� In the courtIn the court--

�� Right to bailRight to bail-- s185 s185

�� Right to defense be defendedRight to defense be defended-- s 96s 96

�� Right to meet face to face with witness and Right to meet face to face with witness and

prosecutorprosecutor-- s96s96

�� Right to know chargeRight to know charge-- s78s78--9595

�� Right to ask for postponement for the case. S Right to ask for postponement for the case. S

7575

�� Right to appeal.s 136Right to appeal.s 136

BAILBAIL

�� A delivery or a bailment of a person to his A delivery or a bailment of a person to his
sureties upon their giving sufficient security for sureties upon their giving sufficient security for
his appearance.his appearance.

�� A Bond is an instrument binding the person who A Bond is an instrument binding the person who
executes it. It can be either :executes it. It can be either :--

�� 1) Bond of good behavior1) Bond of good behavior

�� 2) Bond to appear in court on particular date set 2) Bond to appear in court on particular date set
for trial.for trial.

�� 3) Bail bond binds the person who executes it to 3) Bail bond binds the person who executes it to
ensure the accused appears in ct to answer the ensure the accused appears in ct to answer the
charge against him.charge against him.

Section 185Section 185

�� When any person is arrested or detained When any person is arrested or detained

without warrant by REO or PO and is without warrant by REO or PO and is

prepared at any time while in the custody of prepared at any time while in the custody of

such officer or at any stage of the such officer or at any stage of the

proceedings b4 such ct to give bail, such proceedings b4 such ct to give bail, such

person shall be released on bail by a REO or person shall be released on bail by a REO or

PO.PO.

Section 186Section 186

�� Amount of bond:Amount of bond:--

�� Circumstances of the caseCircumstances of the case

�� Being sufficient to secure the attendanceBeing sufficient to secure the attendance

�� Not excessive.Not excessive.

�� Zulkifli B.Zulkifli B. Hj Hassan Hj Hassan VS PP (1987) 2 MLJ 527.VS PP (1987) 2 MLJ 527.

�� The appellant was charged under s 409 PC involving The appellant was charged under s 409 PC involving
RM16.7M. The judge allowed him bailRM16.7M. The judge allowed him bail--RM1M+2 RM1M+2
sureties. The court held that the requirements of bail are sureties. The court held that the requirements of bail are
merely to secure the attendance of the accused and not merely to secure the attendance of the accused and not
intended to be punitive and excessive bail ought not to intended to be punitive and excessive bail ought not to
be required. RM1M bail in this case had the effect be required. RM1M bail in this case had the effect
punishing the accused b4 he was guilty of the chargespunishing the accused b4 he was guilty of the charges
vsvs him. Reduce to RM200K with 2 sureties.him. Reduce to RM200K with 2 sureties.


BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
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Daily Archives: March 6, 2010
March 6, 2010
DR. ZULKIFLI HASAN
Shari’ah governance in Islamic financial institutions and the effect of the Central Bank of Malaysia Act 2009
Assalamualaikum,
Dear Readers,
I am very grateful to share with you my recent article on the recent legal development pertaining to Islamic finance in Malaysia entitled “Shari’ah Governance in IFIs and the Effect of the Central Bank of Malaysia Act 2009”. This article is published in the Journal of International Banking Law and Regulation, 2010, Volume 25, Issue 3, pp. 105-108 and available online.
The philosophical foundation of corporate governance in Islam requires an additional layer of governance for the purpose of Sharia compliance. With this aspiration, corporate governance in Islamic financial institutions (IFIs) needs a set of institutional arrangements to oversee the Sharia compliance aspects of their business and operations…..p 104. Zulkifli Hasan, J.I.B.L.R., 2010, 25 (3)
Best Regards

ZULKIFLI HASAN

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CIVIL AND CRIMINAL

PROCEDURE IN SYARIAH

COURT

LAA 3043

CONTENTS

• INTRODUCTION

• GENERAL OVERVIEW OF THE
COURSE

• CONCEPT OF JUSTICE, AL-
QADHA’ AND AL-DA’WA.

• CIVIL AND CRIMINAL
JURISDICTION

INTRODUCTION

• To familiarize with the necessary knowledge of
Islamic procedure.

• To give an overview of the current application of
the procedural law in syariah court.

• To equip and educate students with knowledge on
the syariah procedural legislation in Malaysia either
on the civil and criminal procedure; and

• The differences with substantive laws and
procedural laws.

GENERAL OVERVIEW OF

THE COURSE

• Part One-syariah civil procedure.

• Include explanation on the parties to an action;

the appointment, functions and duties of a

Peguam Syarie, the explanation on the pleadings,

subpoenas and affidavits; procedure of service of

documents and the process of discovery and

inspection; the process of sulh; the process of

hearing and judgments.

Cont….

• Part two discusses the syariah criminal

procedure:

• the students will be taught the nature of

charge and its ingredients, the process

of arrest and the criminal trial; aspects

of bail; the criminal trial and appeal;

sentencing in criminal procedure.

CONCEPT OF JUSTICE, AL-

QADHA’ AND AL-DA’WA.

• Surah Al-Anbiya (21) :78

“We also bestowed favors upon Daud and

Sulayman when the two were judging a case

regarding the field into which the sheep of certain

people had strayed by night and were watching

them to arrive at the right decision although we

had given wisdom and knowledge to both of

them”.

Cont…

• Surah An-Nisaa (4): 105

“ We have revealed to you book with the truth

so that you may judge between people in

accordance with the right way which Allah

has shown you so be not an advocate for

those who betray trust, seek Allah

forgiveness, surely Allah is forgiving ,

Merciful”.

Cont…

• Hadith Ummu Salamah reported that the
messenger of Allah declared;

“I’m only a human being and you bring your
disputes to me Perhaps some of you indulge in
logic to prove your assertions and it may be that I
give my decision or the strength of your
argumentation. Should I therefore give one that
which his brother entitled to he should not take it,
for it would be as if I am giving him a coal of
fire.”

Element of justice in the Syariah

Procedure Code

• By giving proper representation to the
parties in litigations (ss12, ss14, ss114)

• The case can be heard by impartial hearing.
(ss37, ss115 and ss123).

• Seeking the truth and do justice (ss76 and
ss94)

• Adherence to Islamic law and prevent
injustice (ss19, s87 and ss253)

ContCont……

� Al-Qadha’or Judiciary- anything which is

related with the administration of justice. It

includes court and officer of the court.

� Al-Da’wa or Charge- During trial-Words

accepted by a judge or qadhi to obtain a known

right from another person or to defend such

right in a legal dispute

CIVIL JURISDICTION

• Family laws in respect of:
(a) marriage, divorce, custody and
guardianship, maintenance of children,
matrimonial properties, alimony, Laws of
succession, Probate and Administration –
relating to distribution, Trust Deed – in
respect of gift inter-vivos.

CRIMINAL JURISDICTION
• Limited and confined to offences in respect of:

polygamous marriage, close proximity,  indecent
dressing and behavior, violation of the "pillars of
Islam” , not fasting during Ramadhan, not
attending Friday prayers, desertion by either
spouse  and apostasy.

• only over persons professing the religion of Islam
and it has only such jurisdiction in respect of
offences as is conferred by Federal law. Muslim
Courts (Criminal Jurisdiction) Act,
1965 Amendment 1984- Jurisdiction to deal with
cases punishable with imprisonment up to
three years, or f ine up to $5,000.00 or whipping
up to six strokes or the combination of all these.

CONCLUSION

• This course is very important for those who
want to practice in Syariah Court.

• The student has to know the jurisdiction of the
sy. Court before they may learn the civil and
criminal procedure.

• There were differences and similarities on the
nature of civil and and criminal procedures.

Thank You

Zulkifli Bin Hasan

Lecturer Faculty of Syariah & Law

E-mail: zul361977@yahoo.com.

Tel. No: 03-42892237

H/Phone No: 012-9236107


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Daily Archives: November 10, 2011
November 10, 2011
DR. ZULKIFLI HASAN
Rachid Ghannouchi, a Reformist
Ghannouchi…Tunisia’s Reformist Islamist
Available at:
http://www.onislam.net/english/news/africa/454636-ghannouchitunisias-reformist-islamist.html
TUNIS – Seen as a reformist and a champion of public freedoms, Rachid Ghannouchi, the leader of Tunisia’s Islamic-leaning Ennahda, sees himself on a mission to advocate “an applied version of Islam”.
“There is some confusion in the West about Islamism,” Ghannouchi told Reuters.
“Some confuse it with fundamentalism and link it to violence, extremism and takfir” — the practice of declaring other Muslims infidels.
Ghannouchi’s Ennahda party won 41.7 percent of votes in last month’s election, the first poll since the ouster of president Zine Al-Abidine Ben Ali in a popular revolution earlier this year.
The election will result in an assembly that will draw up the country’s new constitution.
The party says it will not write religion into the country’s laws and will focus instead on jobs for the unemployed and justice for all.
Ghannouchi says Ennahda will guarantee individual freedoms, including women’s rights.
He compared its approach to that of the Christian Democrats in Europe or United States politicians who invoke God and Christian values while working in a secular democracy.
“We are against the state trying to impose any particular way of life,” he said.
“There shouldn’t be any law to try to make people more religious. We believe in freedom of religion, including the freedom to change religion.”
Ghannouchi was forced into exile in Britain for 22 years because of harassment by Ben Ali’s police.
A softly spoken scholar, he dresses in suits and open-necked shirts while his wife and daughter wear the hijab.
Reformist
Ghannouchi’s pragmatic policies are often described as being inspired by the moderate Islamists in Turkey’s ruling Justice and Development Party (AKP), but they seem to have been just as influenced by him.
“Tunis has been a center of reformist Islamic thought since the 19th century,” said Mustafa Akyol, Turkish author of the recent book “Islam Without Extremes: A Muslim Case for Liberty.”
“The AKP doesn’t have a Ghannouchi,” he said, using the name of the ruling party of Turkish Premier Recep Tayyip Erdogan.
“Neither Erdogan nor (President Abdullah) Gul has written books about reform theology.”
A rare theoretician among Islamist politicians, Ghannouchi’s reformist writings were translated from Arabic into Turkish and read there as early as the 1980s.
His 1993 book “Public Liberties in the Islamic State” is “better known in Turkey than Tunisia,” he said.
It was banned until Ben Ali was ousted by Tunisia’s Arab Spring protests in January.
Ghannouchi believes that Islam and democracy fit together as all Islamic laws aim to preserve the universal values of life, religion, property, reason and family.
“When we establish democracy, we see that it achieves many of these aims,” Ghannouchi said.
“Anything that promotes these aims is Islamic, even if it is not called Islamic.
“That’s why we say that Islam and democracy are compatible.”
Radwan Masmoudi, Tunisian-born director of the Center for the Study of Islam and Democracy (CSID) in Washington, said democracy was the most suitable political system for putting Ghannouchi’s interpretation of Islam into practice.
“There are Islamic values that are universal and the state should uphold, such as justice, freedom and equality,” he told Reuters.
“For that you need a separation of powers and an independent judiciary. Those are secular values.”
Another pillar of Ghannouchi’s thinking — ijtihad, or reasoned interpretation of Islamic texts — needs freedom to operate effectively, Masmoudi said.
“You can’t practice ijtihad in a dictatorship,” he said.
“People used to think we needed to reform Islam to have a democracy. I think we need democracy first, then we can reconcile Islam with modernity.”
Regards

ZULKIFLI HASAN
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BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
Shari'ah, Law, Islamic Finance and Muslim News
Daily Archives: August 11, 2014
August 11, 2014
DR. ZULKIFLI HASAN
Demand for Islamic finance training from non-Muslims rose more than fourfold
Shariah Study Lures Non Muslim Students in Asia: Islamic Finance
By Yudith Ho and Liau Y-Sing  Available at:
http://www.bloomberg.com/news/2014-08-07/shariah-study-lures-non-muslim-students-in-asia-islamic-finance.html
Demand for Islamic finance training from non-Muslims rose more than fourfold in the past seven years as students seek to enter an industry whose assets are set to double to $3.4 trillion by 2018.
Malaysia’s International Centre for Education in Islamic Finance had 2,000 people enrolled on its courses this year, of whom about 14 percent are from nations with small Muslim populations, its Chief Executive Officer Daud Vicary Abdullah said in Kuala Lumpur yesterday. That compares with 3 percent in 2007, he said.
While students from South Korea, Japan and the U.S. dominate the enlistees, those nations have yet to introduce Shariah-compliant legislation. The U.K. became the first western country to sell sukuk this year, while Hong Kong and South Africa also plan to debut in the market in 2014. Ernst & Young LLP forecasts Islamic lenders will have 70 million customers by 2018, up from 38 million last year.
“Islamic finance is becoming less and less of a niche,” Daud said in a phone interview. “The Koreans and the Japanese see this as a business proposition and given the potential, they can’t afford not to participate.”
Malaysia, Indonesia and the six-member Gulf Cooperation Council are the world’s main Shariah-compliant industry centers, with Hong Kong, Singapore and the U.K. all vying to become regional hubs since introducing Islamic finance laws.
Professionals Needed
Australia has considered employing such legislation since at least 2010, while plans in South Korea met with opposition from Christian groups. Japan has no rules of its own but allows subsidiaries of its lenders and insurers to offer Islamic financing overseas. The U.S. has no laws that permit the sale of sukuk although it does provide Shariah-compliant services.
Shariah law bans investment in companies involved in activities deemed as unethical such as gambling, prostitution and alcohol. Scholars are employed to vet products and services to ensure they comply with religious tenets, including a ban on interest payments.
The industry needs 1 million people with Islamic finance knowledge by 2020 as Shariah-compliant assets are set to reach $6.5 trillion by then, according to a November report from the Malaysia International Islamic Financial Centre.
State Sponsored
Rodney Wilson, who used to teach Shariah-compliant banking at Durham University in the U.K. and is now an Emeritus Professor, said he’s taught students from South Korea at Malaysia’s INCEIF and non-Muslim Europeans at the England-based institution.
“Islamic banking and finance is now accepted by mainstream bankers and finance professionals, who see it as an opportunity,” Wilson said in an Aug. 5 e-mail interview. “Sukuk are becoming more popular as the issuance in non-Muslim countries illustrates.”
Global offerings of Shariah-compliant bonds rose 27 percent in 2014 from a year earlier to $26.9 billion, data compiled by Bloomberg show. A decade ago, full-year issuance amounted to $5.6 billion. Malaysia, the world’s largest sukuk market, accounted for 69 percent of sales last year, followed by Saudi Arabia with 12 percent, the United Arab Emirates with 6 percent and Indonesia with 5 percent, Bank Negara Malaysia data show.
Many students from non-Muslim nations are sponsored by state agencies, such as their foreign and finance ministries, said Daud at Malaysia’s INCEIF, who is also on the steering committee of the Royal Award for Islamic Finance organized by Bank Negara and the country’s Securities Commission. More education is needed to clear up misperceptions about the Shariah-compliant industry that some people have, he said.
Better Awareness
Hong Kong plans to sell as much as $1 billion of sukuk in its debut offering this year, according to an e-mailed statement in April. Maybank Kim Eng Holdings Ltd. and law firm Clifford Chance LLP began training staff in the city in preparation for this and future sales.
Hong Kong, Japan, South Korea, the U.S. and U.K. were home to less than 0.4 percent of the 1.6 billion global Muslim population in 2010, according to the website of the Washington-based Pew Research Center. That compares with 1 percent in Malaysia, 12.7 percent in Indonesia and 1.6 percent in Saudi Arabia.
Luxembourg and South Africa are planning to sell Islamic bonds by year-end, Emad al Monayea, chief executive officer of Kuwait’s Liquidity Management House for Investment, said in an interview in London on June 18.
“The awareness is getting better,” Raj Mohamad, managing director at Five Pillars Pte, a consulting firm in Singapore, said in a phone interview yesterday. “Non-Muslim countries want to tap the liquidity available in Islamic finance and expand their offerings.”
Regards

Zulkifli Hasan
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BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
Shari'ah, Law, Islamic Finance and Muslim News
Category Archives: My recent publication
April 11, 2014
DR. ZULKIFLI HASAN
In search of the perceptions of the Shari’ah scholars on Shari’ah governance system
Salam,
My recent article published in the International Journal of Islamic and Middle Eastern Finance and Management ” (2014) Volume 7 Issue 1 entitled “In search of the perceptions of the Shari’ah scholars on Shari’ah governance system”.
Available at:
http://www.emeraldinsight.com/journals.htm?issn=1753-8394&volume=7&issue=1&articleid=17108405&show=pdf
Document Information:

Title:	In search of the perceptions of the Shari’ah scholars on Shari’ah governance system

Author(s):	Zulkifli Hasan, (Islamic Science University of Malaysia)

Citation:	Zulkifli Hasan, (2014) “In search of the perceptions of the Shari’ah scholars on Shari’ah governance system”, International Journal of Islamic and Middle Eastern Finance and Management, Vol. 7 Iss: 1

Article type:	Research paper

Publisher:	Emerald Group Publishing Limited

Abstract:

Purpose – This article examines the Shari’ah scholars’ perception on Shari’ah governance system in Islamic financial institutions (IFIs) particularly to six its major areas namely issues of Shari’ah governance, internal framework, roles and functions of Shari’ah board, attributes of Shari’ah board members on independence, competency and transparency, and confidentiality, operational procedures and assessment of the Shari’ah board’s performance
Design/methodology/approach – The study conducted semi-structured interviews with Shari’ah scholars who are members of the Shari’ah boards in various IFIs. All interview questions were generated, structured and arranged in a way that all the data could be analysed easily through a coding and thematic approach.
Findings – The study discovers the different points of view demonstrated by the Shari’ah scholars who were interviewed on several issues and they have also conceded that there are serious gaps and weaknesses prevalent in all the six major areas of Shari’ah governance. This position acknowledges that there are shortcomings and weaknesses to the existing governance framework which needs further enhancement and improvement.
Practical implications – The study offers a useful source of information that may provide relevant guidelines to policymakers and practitioners for future development of Shari’ah governance practices in IFIs.
Originality/value – The study provides fresh data and significant information pertaining to the Shari’ah scholars’ perspective on Shari’ah governance system. This analysis on the various opinions of Shari’ah scholars on the aspect of Shari’ah governance system can also serve as an additional literature on the topic.
Regards

Zulkifli Hasan
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February 8, 2013
DR. ZULKIFLI HASAN
BETWEEN BANKER’S WINDOW DRESSING AND INVASION OF SCHOLAR WANNABES
BETWEEN BANKER’S WINDOW DRESSING AND INVASION OF SCHOLAR WANNABES
Zulkifli Hasan
Shari’ah scholars in Islamic finance are frequently put in a dilemma position. They have been accused upside down with numerous allegations even without any basis. During early implementation of Islamic finance, Shari’ah scholars have been alleged as forming an alliance with Islamic capitalist to create a new market for Islamic finance sector. In this instance, the Islamic banks are guided by those well-paid clerics and always issue rulings according to their needs. In fact, since 1980s, many of the scholars have been accused of being bankers’ window dressing and of over-stretching the rules of Shari’ah to provide easy fatwas to Islamic financial institutions.
Lately, it is quite surprising that the scholars have been criticized even by Islamic bankers. The myth of alliance between Islamic bankers and Shari’ah scholars seems to be no longer relevant. One of the critics refers to allegation where the Islamic financial market globally has been invaded by Shari’ah scholar wannabes, a new term introduced to refer to the so called unqualified Shari’ah scholars. This Shari’ah scholar wannabes have infiltrated Islamic banks, regulatory authorities and Shari’ah governing bodies without due consideration to stakeholders value. Much more serious is where the criticism includes allegation of changing the meaning of Quranic verses and Hadith by those Shari’ah scholar wannabes.
Caution and criticism are mostly welcomed and in fact warranted but not to baseless allegation and wrongful accusation. Constructive criticisms particularly on the governance issue in Islamic financial institutions will surely contribute to the development of Islamic finance industry. The unethical criticisms will lead the industry nowhere and in fact will infiltrate its development and negate the public confidence. Considering the significance of this issue, this article attempts to address several misconceptions on Islamic finance even by the so called truly Islamic finance practitioners with the aim of providing a basic understanding and removing any inaccurate or unfounded prejudice.
1. Islamic finance is a pure commercial transaction: Islamic finance concept is grounded in ethics, values and norms. As Islamic finance is not pure commercial transaction and not only confine to nominate contracts, Islamic financial institutions therefore should be commercially and morally oriented entities. Islamic finance assumes a moral based value preposition which offers solution for the economic and financial problems. These moral and ethical value systems require that the decision-making process in Islamic finance must not solely based on efficiency and equity but must have social and ethical dimensions.
2. Stakeholders value confines to shareholders interest: The stakeholder value orientation is not only concern on shareholders but also to protect all the stakeholders’ interest and rights. The stakeholders value, conceptually, require Islamic financial institutions to balance the corporate goal of maximizing the profit with the duty to uphold the principle of social justice and maqasid Shari’ah and this entails the notion of protecting the interests and rights of all stakeholders within the Shari’ah rules. Even the Basel Committee for Banking Supervision on ‘Enhancing Corporate Governance for Banking Organizations’, expands the term ‘stakeholders’ to include employees, customers, depositors, suppliers, supervisors, government and the community. Not only that the OECD further classifies the stakeholders into shareholders, internal stakeholders (employees and labour unions), operational partners (customers, suppliers, creditors and contractors), and the social community (state authorities, trade union, non-governmental organizations and civil society).
3. The true meaning of Bay is sale and it has no element of risk: Islamic finance is gharar-free, maysir-free and riba-free, but not risk-free. Since Islamic financial products and services are designed based on different nominate contracts, it is erroneous and would be a sheer misconception to say that Islamic finance is risk-free or less risky. Furthermore, Islamic financial products and services should have moral and ethical dimensions and therefore any transactions should be embedded in real economy which offers an alternative financing paradigm. At this point, the conceptual framework of Islamic finance suggests that it should be more than financialisation of the nominate contracts. Islamic financial institutions should take necessary risks equitably and not simply shifting the liability unfairly to the customer. In other words, Islamic finance should represent a holistic approach to financing not only bankable customer but also to allocate certain fund for non-bankable and underprivileged people as part of its social responsibility to the society and ummah.
4. Islamic financial institutions are purely profit-oriented entities: Based on its epistemological dimension, Islamic finance is actually a society oriented financing proposition as it aims to serve the community, ummah and not solely to the markets. Islamic finance must not only confine within profit-driven orientation but it should also address issues on economic and sustainable development, social justice and social investing oriented principles. With reference to several empirical studies, the current Islamic finance practices on the other hand do not indicate positive correlation with human development index scores. Surprisingly, the corporate social responsibility performance of Islamic financial institutions also has been rather weak and poor as compared to its conventional counterpart. This position demands Islamic financial institutions to seriously reevaluate and review their current practices and future direction.
5. Shari’ah scholar wannabes infiltrated the industry’s well being: The critics on the roles of Shari’ah scholars are always blown out of proportion and over-exaggerated. Undeniably, Shari’ah scholars, either senior or young scholars or conservative or pragmatic scholars have their own unique contribution to the industry’s well being but their approaches may be different. This should not be the reason of denying their significant contribution. The ‘Conservative’ scholars may view the legitimacy of Islamic financial products and services to be based on the legal and mechanistic aspects of Shari’ah. The products and services are classified as lawful and Shari’ah-compliant or Shariʿah-based if they meet the conditions of a valid muamalat transaction after going through the ordinary process of usul al fiqh.  On the other hand, the ‘Pragmatic’ scholars admit that Islamic finance should not confine their function by solely emphasizing the fiqh aspect. The ‘Pragmatic’ scholars acknowledged that Islamic financial products and services should not only be valid and lawful, must fulfil the spirit of maqasid Shariʿah but must also be ethical and uphold the Islamic values.
The critics upon Shari’ah scholars of either being banker’s window dressing or invasion of the scholar wannabes are actually misleading. These allegations to certain extent will negatively influence the Islamic finance industry as they are not supported with any empirical evidence. Rather than discussing these unnecessary issues, the Islamic finance discourse should actually be focusing on its fundamental principles and how to ensure its sustainability. It is important to critically evaluate the performance of Islamic financial institutions against their foundational base and at the same time to maintain its positive development. The existing practices of Islamic finance so far have failed to establish a distinct identity or to draw a clear demarcation line with conventional banks. In fact, with several corporate failures of Islamic financial institutions, such as the closures of Ihlas Finance House in Turkey, the Islamic Bank of South Africa and the Islamic Investment Companies of Egypt, and corporate difficulties, as in the case of the Dubai Islamic Bank, and Bank Islam Malaysia Berhad, Islamic finance is clearly not immune from the crisis. Islamic finance must learn from the history and take lesson from previous financial crisis. We do not want to hear that the only lesson that Islamic financial institutions have learned is that they never learn.
Disclaimer: This is the personal opinion of the author.
Regards
Zulkifli Hasan
Grand Mosque of Cordova
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January 4, 2012
DR. ZULKIFLI HASAN
AN ANALYSIS OF THE COURTS’ DECISIONS ON ISLAMIC FINANCE DISPUTES
Salam and happy new year,
Dear my weblog readers,
I am delighted to share with you my recent article entitled ‘An Analysis of the Courts’ Decisions on Islamic Finance Disputes’ published in the ISRA International Journal of Islamic Finance, 3 (2): 41-71. This article critically reviews and analyses the courts’decisions on Islamic finance disputes in four different jurisdictions, namely Malaysia, the United Kingdom, India and the United States.This paper highlights the distinctive approaches of courts in making decisions pertaining to Islamic finance issues. These jurisdictions were selected on the basis of the interesting case studies they provide, where Malaysia represents a country where the Muslims are a majority and the others where the Muslims are a minority.
For further reading, click
An Analysis of the Courts’ Decisions on Islamic Finance Disputes
This article is also available at:
http://www.isra.my/publications/journal.html
or
https://zulkiflihasan.files.wordpress.com/2008/05/an-analysis-of-the-courts-decisions-on-islamic-finance-disputes.pdf
Enjoy Reading!!
Considering the continuous legal uncertainties, the polemics of governing laws, the distinct interpretational approach and the different positions on the status of Islamic law as a recognised law of the land as argued and debated in the courts, it is important to have a proper, sound and clear legal environment to support the implementation of Islamic finance. In order to mitigate any sort of legal risk as well as Shariah non-compliance risks which are most likely to be disputed in courts, the ideal legal framework for Islamic finance must be characterised at least by four important features.

Firstly, in order to foster confidence in investors and consumers, there must be an enabling environment that accommodates and facilitates its implementation. Secondly, the enabling legal environment must be supported by a clear and efficient system that guarantees the enforceability of Islamic financial contracts. Thirdly, Islamic finance needs a credible and reliable legal avenue for settlement of legal disputes arising from Islamic finance transactions. At this point, alternative dispute resolution seems to be the best alternative to court proceedings which can streamline the resolution of disputes and avoid the need for court proceedings.

Finally, a sound legal framework is dependent on the instrumental function of its legal fraternity. Lawyers, judges, legal advisors, Shariaah scholars and other professionals in Islamic finance should acquire sufficient knowledge on the traditional Islamic legal concepts and be able to apply them in the context of modern finance and the law of international finance. All of these features are the prerequisites of a sound legal framework for the Islamic finance industry.
Best Regards

ZULKIFLI HASAN
Milan, Italy
Islamic finance news
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July 9, 2010
DR. ZULKIFLI HASAN
Demystifying the Myth of Shortage of Shari’ah Scholars
Assalamualaikum,
Dear readers,
I am very delighted to share with you my recent article in the Global Islamic Finance Magazine (GIFM) July Issue pp66-67. The GIFM is a London-based leading magazine that provides news, knowledge and information on Islamic finance. This article attempts to demystify the mundane assumption or myth about shortage of Shari’ah scholars that available in the market. For full article, click here:
http://content.yudu.com/Library/A1o6ii/ComplimentaryGlobalI/resources/66.htm
“The ink of the scholar is more sacred than the blood of the martyr”
Best Regards

ZULKIFLI HASAN

DURHAM, UK
Cordoba, Spain
Islamic finance news
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May 17, 2010
DR. ZULKIFLI HASAN
Regulatory Framework of Shari’ah Governance System in Malaysia, GCC Countries and the UK
Assalamualaikum,
Dear Readers,
Alhamdulillah and I am very grateful to share with you my recent article entitled “Regulatory Framework of Shari’ah Governance System in Malaysia, GCC Countries and the UK” in the special issue of the Kyoto Bulletin of Islamic Area Studies on Islamic Finance (2010 March, Vol. 3 No.2). The Kyoto Bulletin of Islamic Area Studies is a refereed journal published by the Centre for Islamic Area Studies of Kyoto University. I presented this paper during the Kyoto-Durham Workshop on Islamic economic that took place in Kyoto, Japan last July. This article will also be published by Routledge in a book edited by Asutay, Kosugi and Sairally entitled “New Horizons in Islamic Studies” Series this year, InsyaAllah.
For full article, click here:
REGULATORY FRAMEWORK OF SHARIAH GOVERNANCE SYSTEM IN MALAYSIA GCC AND UK
Enjoy Reading!
….Uniquely, it is a sine qua non for the significant differences of Shari’ah governance system

particularly from the regulatory overview as Malaysia represents model in mixed legal jurisdiction, GCC in Islamic and mixed legal environment and the UK in non-Islamic legal environment…… Hasan, (2010: 82).
Best Regards

ZULKIFLI HASAN

DURHAM, UK
With Dr. Mehmet Asutay, Professor Kosugi Yasushi, Mr. Hylmun Izhar and Professor Abdul Ghafar Ismail at Kyoto University.
Islamic finance news
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← Older posts
AUTHOR
DR. ZULKIFLI HASAN
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Welcome to My Blog of Knowledge

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My Thought

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My Activity

My Conference

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Search
Al-Baqarah, 2:275
Calendar
November 2023

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T

W

T

F

S

S

1

2

3

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5

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22

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24

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30
« Feb
Academic
Centre for Islamic Area Studies at Kyoto University

Durham Islamic Finance Programme

Harvard University Islamic Finance Project

IIUM Institute of Islamic Banking and Finance

INCEIF

International Institute of Islamic Economics

International Shari'ah Research Academy for Islamic Finance

MIHE
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Mahmud El-Gamal

Mohammad Obaidullah

Monzer Kahf

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Sheikh Muhammad Afifi Al Akiti

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Liquidity Management Centre
Islamic Finance Worldwide
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