Given the ugly Global Banking face of today due to the Sub-prime crisis which has started showing a series of bankruptcies, Islamic banking has the opportunity to gain more popularity, as it has to see that every transaction is backed be a valid transaction and thus becomes the economic driver instead of a financial burden, and shariah scholars approve it transaction to transaction basis.  Although this is not enough yet, as compared to the total assets managed by all the financial Institutions around the world, but Islamic Banking is growing rapidly with no limit in sight. Two of the key developments that have made this growth possible are, firstly, Bahrain - a key intermediary centre for Islamic finance instruments - and secondly, Malaysia – where the decision to adopt Shariah compliant financial instruments as an integral component of its financial market have given this sector a general boost. As now rapid growth of Islamic banking has been witnessed in the global financial world, various parts of the world are actively promoting Islamic banking and finance in their respective jurisdictions and global conventional banking players are also venturing into Islamic financial activities.

Al Huda- Centre of Islamic Banking and Islamic Economics     (CIBIE)

Al Huda Centre of Islamic Banking and Islamic Economics organized the 2nd   International Conference and Exhibition on Islamic Banking and Finance” on 25th of August, 2008 at Aiwan-e-Iqbal, Lahore which was the  largest event of its kind all over  globe  with two highly interactive allied workshops on Takaful and Sukuks . It was a memorable event because  more than 1500 participants met  under one roof in the presence of national and international speakers talking on different topics in Islamic Banking, Finance, Takaful and Sukuks with the real experience from Industry.

Al Huda- Centre of Islamic Banking and Islamic Economics has so far organised/conducted over 120 trainings and workshops on almost all topics and issues in Islamic banking, finance and Takaful. In this way, Al Huda- CIBE has played a vital role in providing trained human resources to various Islamic banks and Islamic financial institutions not only in Pakistan but also in UAE, South Asia and African countries as well.

Considering the tremendous global growth and development in Islamic banking and finance industry over the last two decades, Al Huda- CIBE launched its training courses and conferences four years ago, and First such International Conference and Exhibition on Islamic Banking and Finance was organised by Al Huda- CIBE at the same venue in April 2006. As large number of Shariah Compliant banks, financial institutions, Sukuks and Takaful companies are emerging in the growing financial markets calling for more competitive and extremely sophisticated performance from the professional staff, the training needs are becoming critical.

 Distinguished leading regional and international specialists in academics, business leaders and financial experts shared there vision on diversified topics on Islamic Banking and Finance, Shariah supervision and audit, Takaful, Islamic funds and Sukuk. Al Huda- CIBE organised 6 Interactive sessions, 35 seasoned speakers from worldwide, over 1,500 Participants and almost 20,000 exhibition visitors who explored new horizons of Islamic banking and finance. It is widely accepted that Islamic Finance is one of the fastest growing areas of International finance. As Al Huda- CIBE is working for the promotion, awareness and training all the related areas. This program was basically designed for imparting conceptual learning with practical and operational mechanisms in Islamic banking and finance, Shariah Compliant investments and takaful to cater for the updated knowledge and professional skills to the participants.

Besides that big event of an International conference, the annexed workshops covered the following major topics in Islamic finance:

1. Islamic Banking
2. Takaful
3. Sukuks
4. Islamic Funds

Al Huda- CIBE is a well established name in the Islamic financial market for training, awareness and financial products development. Utilizing global knowledge database, it has carried out several market studies. The focus of these studies has been to identify the key fundamentals of unique customer base, product demand and emerging trends in the interest of the clients.

Al Huda- CIBE offers a vide range of training, education and professional services to Islamic Banking, viz.:

1. Post Graduate Diploma (PGD) in  Islamic Banking & Finance
2. Short Courses
3. In-House Training
4. Conferences
5. Seminars & Lectures
6. Workshops

    At Corporate Level:

1. Financial Modeling
2.  Feasibility Studies
3. Strategic Planning
4. Syndicated and Project Finance
5. Debt Advisory

At Business Management level:

1. Strategy and Business Planning
2. Risk Management Advisory
3. Identify Business Opportunities
4. Representing a client in Major Negotiations

At Research front:

1. Market Studies
2. Feasibility Reports
3. Re-Structuring of Conventional Products into Islamic Products
4. Surveys

Islamic Banking and Finance News an Online Magazine on Islamic Finance by Al Huda- CIBE, having the following features:

1. Free Subscribed (By 180,000 Desktops)
2. Islamic Banking News
3. Islamic Financial Product reviews
4. Analysis
5. Islamic Investment structuring news

Summary of International Conference and Exhibition & Workshops

The conference was officiallly inaugorated by two of the ministers from Punjab Government Mr. Tanvir Ashraf Kaira Minister of Finance and Mr Haroon Khwaja Minister of Commerce and Head of Chief Minister’s Monitoring team. Mr. Hamad Rasool Director Research and Training, Al Huda- CIBE co-ordinated/hosted the entire day on the stage as master of the ceremony, while Mr. Zubair Mughal CEO, Al Huda- CIBE ensured that everything goes well as planned as it was undoubtedly the largest gathering of Islamic banking professionals and learners ever held on the globe and the responsibility further enhanced in the wake of terrorist activities all across the country still some of the participants could not attend due to the security concerns from their governments.
The first session was chaired by Mr. Shafqaat Ahmad, Country Head, AlBarkah Islamic Bank Limited, focusing upon the basics on Islamic Banking and its practical difficulty angles.
Mr. Amer Khalil-ur-Rehman  said the  Muslims make over 20% i.e. 1/5th of world population and today there are  over 500 Islamic financial institutions, in around 70 countries, having capitalization in excess of USD 13 Billion, assets over USD 262 billion, financial investments above USD 400 billion and  deposits in excess of USD 202 billion.

Mr. Muhammad Ayub from NIBAF talked about the Shariah bases of Sukuk and issues like equity based essentials of Musharakah and Mudarabah and the specific directives from Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) on such transactions.  He discussed main elements which are involved in Islamic Banking like evaluating specific risks, isolating and efficiently allocating risks and evaluating the taxation, accounting and legal implications within the regulatory framework.

    Mr. Muhammad Ikram Thowfeek, Managing Director of First Global Investments Sri Lanka said ,the Islamic finance industry is said to be growing at various rates (10% -15% pa), (15% – 20% pa) some even say at 40%-50% per annum and also said to be managing funds $500 billion  to $1 trillion. It is quite evident that the industry is growing .The Gulf Cooperation Countries (GCC) markets are enjoying a period of extra ordinary growth reminiscent to that of the 1970’s oil boom. But this time, concentration is on construction, infrastructure, services, tourism and economic diversity as well as greater private sector role. Appetite for Islamic finance is very much high and appealing not only in the GCC or Asian markets, but globally. Islamic banking and finance is 20% tapped, so 80% industry is still untapped. The untapped market potential is available to bring benefits to individuals, corporate entities and the government. Standards & poors International rating agency has declared that demand for Islamic finance to rise to $4 trillion in coming five years.
The challenge going forward is Islamic finance must be portrayed as a ‘distinct alternative’ to conventional finance; otherwise, Islamic finance will be portrayed as ‘just another type of product/service’ under the conventional banking umbrella.

Mufti Muhammad Najeeb Khan, Shariah Advisor- Habib Metropolitan Bank (HMB) said, Islamic banking must be viewed as an evolving system and change management process and it has shown tremendous growth in last 25 years. He emphasized that financial engineering in the light of Principles of Shariah governance structure and conceptual development of Islamic Banking are the crying need of the hour if we really want to take advantage of the potential of market. He discussed the following main financial contracts:

1. Debt creating Modes (Low Risk Category)

            1. Qard Al-Hasan (interest- free loan)
            2. Murabaha and Musawama
            3. Salam (Commodity sale)
            4. Istisna (Order to manufacture)

2. Semi-debt Modes (Medium Risk Category)

            1. Ijarah

3. Sharing or Non-debt Modes (Full Risk Category)

            1. Musharakah (Close to venture capital)
            2. Specific Purpose Mudarabah
            3. General Purpose Mudarabah

            According to Prof. Dr. Anis Ahmad, Vice Chancellor-Ripha International University, the phenomenal rise in Islamic Banking, Investments, Takaful and Shariah Compliant businesses during the past four decades confirms a desire from the people to go for Halal and avoid Haram in their financial matters. The issue today is not viability of Islamic businesses and finance. Even the hardcore capitalist world has resorted to Islamic windows in its conventional banking and financial institutions. The real problem is the workforce, or the human capital, needed for Shariah compliant management of business and finances of the people, the human resource produced by the conventional academic and capacity-building programmes cannot satisfy the demands and challenges of the Islamic financial institutions. We need highly-competent, motivated and involved persons with required knowledge of conventional banking and finance as well as knowledge of Islamic Shariah. In a recent survey of over 60 banks in Karachi-Pakistan, 75% of senior bankers needed qualified staff in Islamic banking and finance, and 88% wanted their staff to be trained. 92% considered the organization benefited from training of their staff, while 90% indicated that training enhanced their capacity. 66% of respondents showed willingness to absorb candidates with MBA in Islamic Banking Finance and in their organization.

Second technical session was on Islamic Microfinance Chaired by Professor Dr. Khawaja Ajmad Saeed – Principle Hailey Collage of Banking and Finance.  Here Ms. Farida Tariq CEO Centre for Women Corporative Development (CWCD) presented a case study of their own success story on microfinance, and emphesasised  the need of the microfinance in Pakistan.

Dr. Muhammad Amjad Saqib said,  Akhuwat is interest free micro finance NGO in Pakistan which is giving interest free micro loans and it has created an interest free microfinance model and served more than 32,000 families by disbursing more than Rs. 340 million. Akhuwat is now trying to reach 100 cities of the country and also looking to establish Akhuwat Housing Micro Finance. He quoted the remarks of  Mr. .Malcolm Harper, chairmen micro- credit rating international Ltd as below about Akhuwat

‘’Akhuwat is already doing for conventional micro finance what Professor Yunus did for conventional banking in the late 1970’s……it is remarkable institution’’.

Professor Dr. Khawaja Ajmad Saeed while closing the session said that Islamic financial world can implement the emerging Islamic micro finance due to benefits as riba (Interest) free operations , shift of  focus to trading mode, better internal controls, reduced miss utilization of money in non productive activities, overall benefits to economic Environment and more Social Acceptability.

Third Technical Seccssion was on Islamic Banking and Finance Applications to different sectors and Chaired by Mr. Pervez Said Director, Islamic Banking Department, State Bank of Pakistan (SBP)

Dr. Muhammad Akram Laldin from International Shari'ah Research Academy for Islamic Finance (ISRA) Kuala Lumpur, Malaysia discussed the process and complications involved in Shari'ah Supervision of Islamic Banking from regulatory perspective with special reference to Malaysia.

Mr. Mujeeb Baig Head of Research & Product Development, Dawood Islamic Bank Limited. Presented a very interesting and innivative paper on Agricultural Sukuk , its mechanism and regulatory requirements and the required procedures and cares which the Shari'ah scholars and Islamic Banking professionals will be required to adopt.

Mr. Bilal Rasool the Registrar Modarabas was representing Securities and Exchange Commission of Pakistan (SECP) and he highlighted the role of Modarabas Sector in Development of Islamic Finance in Pakistan. Mr. Bilal Rasool has recently developed and impalement 12 new products for Modarabah Sector in Pakistan which he explained the process of implementation and regulator’s prospective

Br. Raffick Nabee Mohammed, General Secretary Albaraka Multi-Purpose Cooperative Society Limited from  Mauritius presented the case study of Mauritius and said that Muslims are 18% in Mauritius which is gateway to the Africa, South Asia & Asia,  out of 1.3 million population and establishing an Islamic bank in Mauritius in 1990’s was a manifestation of the Muslims. Islamic Finance can be promoted through cooperatives because a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. He also suggested that other Muslim countries should take the advantage of Mauritius of promoting Islamic finance through Cooperatives.

Mr. Pervez Said Director, Islamic Banking Department, State Bank of Pakistan while addressing to close this session appreciated the efforts from different Islamic Finance Professionals  and their Innovative workings specially Mr. Mujeeb Baig and  Br. Raffick Nabee Mohammed. Mr. Pervez Said also emphasised the coordination of SECP and SBP on mutual areas of regulation. Mr. Pervez Said showed his satisfaction on the expansion and development of Islamic Banking in Pakistan and predicted it to rise at a phenomenal rate as it happened to the telecom sector and the launching pad has been set for this growth in near future. He further disclosed his plan to raise the Islamic Banking share in Pakistan to 12% by the Year2012 and  called it as Plan 12/12.

Fourth technical session was on Takaful (Islamic Insurance) which was chaired by Dr. Mumtaz Ahmed Hashmi, Advisor on Insurance, Securities and Exchange Commission of Pakistan (SECP)

Capt. M. Jamil Akhtar Khan, Chief Executive Officer Takaful Pakistan Limited explained that takaful comes from the Arabic root-word ‘kafala’ - guarantee. Serious efforts were made in modern times, in 1970s to come up with an Islamic alternative to the conventional insurance. The first takaful company was set up in Sudan in 1979, almost simultaneously followed by another one set up in Bahrain. There are now around 150 takaful companies in over 40 countries. The total insurance premium of OIC countries for 2004 was USD 50 billion; of this, takaful contribution accounts for 5% (USD 2.5 Billion). This is expected to increase to USD 15 billion by 2015. Non–Muslims are increasingly opting takaful products for commercial benefits.

MicroTakaful is a mechanism to provide Shariah based protection to the blue collared, under-privileged individuals at an affordable cost. Only 80 million out of the world's 2.5 billion poor are currently covered by some form of micro insurance. Only 3% of poor lives are insured in India and China. Only 0.3% of the poor are insured in Africa. In 23 of the poorest 100 countries in the world, there is currently no identified micro insurance activity.

Mr. Vaqaruddin Chief Executive Officer, Pak Qatar General Takaful Limited discussed about the Operational mechanism of Takaful business with special reference to his company Pak Qatar General Takaful Ltd. And the shariah matters and their resolutions from time to time.

Mr. P. Ahmed Chief Executive Officer, Pak Qatar Family Takaful Limited explained the life and family Takaful business its specific features and the misconceptions held by the general public in this regard. Mr P. Ahmed also explained the family takaful mechanism its working model and its comparason with common Insurance contracts.

Mr. Justice (r) Khalil-Ur-Rehman khan Chairman Shairah Board, Munich Re Takaful, Malaysia and Emirates Global Islamic Banksaid that Islamic financing is asset-backed and Islam does not recognize money as subject matter of trade except in some special cases. Money has no intrinsic value and is only a medium of exchange and financing in Islam is always based on liquid assets, which create real assets and inventories. Capitalist theory is that capital and entrepreneur are taken to be two separate factors of production; capital earns interest while entrepreneur is entitled to profit. Interest is the fixed return for providing capital but Profit is earned only when there is surplus after distributing the fixed return to land, labour and capital (rents, wages & interest).

Islamic Concept is that it recognizes capital and entrepreneur as a common factor of production. Every person contributing (in the form of money) in a commercial activity assumes risk of loss, hence it is entitled to proportionate share of actual profit. Shariah scholars believe that conventional insurance is unlawful due to involvement of riba (interest), maisir (gambling) and gharar (uncertainty).

After a lavish, well organised and well managed lunch and a prayer break people gathered for the last two sessions but considering the time constraint it was decided to merge the last two sessions into one and this session being an interesting one was on the one hand the user side experiences from Industry and then two scholars talking on their practical experiences in Islamic Banking and Finance.

This last technical session was chaired by Mr. Muhammad Adrees, CEO and Managing Director, Sitara Chemical Industries, Faisalabad who shared his long experience and difficulties faced by him in implementing Musharikah based financial Instruments and the patience required in this process as a lot of shariah conflicts were encountered during this adoption due to non-availability of standard practices at that time in this regard.

Next came Mr. Muhammad Naeem Director and dupty chairman, Shafi group of companies mainly involved in leather and textile industries. He explained te history of their business and the step by step adoption of Islamic Banking by their group.

Mr. Masroor Ahmad Khan Chairmen, Ghani Global Group of Companies, represented Ghani Global Group, with his Chief Financial Officer who shared their experience of Islamic Banking in their setting up of the new plant its commissioning till commercial operation.

Dr. Mazhar Ali Bokhari,  Islamic Banking Consult/Expert to IBM, Saudi Arabia(KSA)  who is associated with Al Huda- CIBE since its beginning also highlighted the experience of International experience in Islamic Banking with special emphasis on his latest assignments in Kenya and Saudi Arabia.

Mr. Yahiya Yousaf, Deputy Head of Operation from Doha Islamic Bank – Qatar talked about Islamic Housing Finance through Diminishing Musharaka its critical angles and comparasions with ather alternatives.

Mufti Muhammad Najeeb Khan, Shariah Advisor- Habib Metropolitan Bank (HMB) then talked about his practical experience with Islamic banking staff and highlighted the HR Issues in Islamic Finance suggested their training requirements and their attitude in adopting the profession.

The Conference ended with a vote of thanks from Mr. Zubair Mughal the Chief Executive Officer, Al Huda- CIBE at around 6:00 pm in the evening. The Plaques were distributed to the learned speakers by Mr. Nicolas Rafique, The President and CEO – First Dawood Islamic Bank Limited who declared the conference a successful and overwelming from Islamic Banking point of view and appreciated and congratulated the organisers.

Workshops on Takaful and Sukuk – August 26 & 27, 2008

Takaful
Capt. Jamil Akhter Khan on the workshop on Takaful at Avari Lahore on August 26, 2008 further explained that Pakistan is a country where more than 96% population is Muslims and demand for insurance/takaful is increasing with increase in per capita income. Personal lines insurance business (leasing, health, Medicare) growing at a higher rate than other conventional classes and Islamic banking is on sound footing with support of the government now. Pakistan has tremendous prospects regarding micro takaful because large rural/urban divide in population (65%: 35%), 40% population below poverty level, mushroom growth of NGOs, State Bank of Pakistan said that 20% branches of commercial banks required in rural areas, benefit of economies of scale to make these viable ventures and financial Support from Asian Development Band and World Bank etc

Takaful Pakistan’s Initiatives:

1. Coverage to over 100,000 low-cost houses.
2.  Synergy with NGOs.
3.  Students Healthcare/Campus care cover
4.  Factory workers’ & Daily wagers
5.  Crop Takaful
6.  Credit coverage for Islamic Microfinance.
7.  Covers tailored for SMEs financing and all above at ‘no profit basis.

Mr. Atiquzzafar Khan said,  insurance and Takaful industry is growing very rapidly due to main advantages like safeguard against sudden loss and assurance of smooth functioning of business activities, improvement in the saving habits in the society and making funds available for productive investments and help of individuals in case of unforeseen financial loss.

SUKUK

Mr. Muhammad Ayub from NIBAF familiarized the participants about the basic concepts behind the Sukuk and differentiated Sukuk from the the stocks of companies prevailing in the market. He talked about the Shariah bases of Sukuk and issues like equity based essentials of Musharakah and Mudarabah. He discussed main elements which are involved in securitization of Sukuk like evaluating specific risks, isolating and efficiently allocating risks and evaluating the taxation, accounting and legal implications within the regulatory framework.
According to him securitization provides incentives for originator for developing transparent credit approval process and public availability of information about pool performance adds to confidence in securitized paper. From an investors’ perspective securitization, reduces the following kind of risks, pooling of diversified assets with heterogeneous risk and securitization mitigates earnings risk.
He also highlighted the various reasons, which caused the popularity of Sukuk in the Islamic financial world like alternative source of funding and strong demand for Shariah Compliant assets. Malaysia and Middle East have emerged as key Sukuk centres but sukuks are also issued in Germany, Britain, Japan, Filipenes and Pakistan. Ijarah concept is the most popular amongst issuers of global Islamic securities.He discussed the following types of Sukuk as suggested by Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI):

1. Mudarabah Sukuk
2. Musharakah Sukuk
3. Ijarah Sukuk
4. Istisna´a Sukuk
5. Murabaha Sukuk

The learned speaker also discussed the following important types of funds:

1. Equity Funds
2. Mudaraba Funds
3. Commodity Funds
4. Property Funds
5. Ijarah Funds

            Mr. Sibghatullah Ahsan highlighted some principles of Islamic finance like prohibition of riba, prohibition of sale of goods before acquiring ownership, prohibition of debt for debt and avoidance of gharar (uncertainty). He discussed different mechanism for exchange of homogeneous and heterogeneous commodities or currencies and exchange involving riba in homogeneous and heterogeneous commodities or currencies. He also introduced to participants some principles derived from the Hadith and on basis of these principles, he discussed Islamic contracts for commercial transactions and their characteristics.
Although Sukuk market is growing very rapidly not only in Muslim  countries but is in non Muslim countries as well but it also facing some critical issues like, Shariah' compliance and convergence, cost efficiency and development of market professionals. A variety of target-specific Sukuk can be issued, return on which will be either variable or quasi-fixed, not absolutely fixed.
Mr. Hamad Rasool, Director and founder Wapda First Sukuk Company and WAPDA Second Sukuk Company drew a clear difference between the the conventional and Islamic financial market because conventional financial instruments are debt based, called bond whereas Islamic financial instruments are asset/transaction based, known as Sukuk. The record number of Sukuk issues in 2007 Worldwide with a total volume of US$32.65 billion has helped the Islamic financial institutions in the areas like better liquidity management, diversification of  portfolio and increase in  portfolio size of tradable instruments with fixed income profile, short and long term (5– 10years) tenor sukuks.
In Gulf Co-Operation Council (GCC-) UAE leads in 2007 Sukuks with 58% and Musharika sukuks remained popular in 2007 in amount but on the other side, Ijarah Sukuks remained highest as number of issues in the  global. In Asia Pacific, Malaysia dominated with 95% share Pakistan stands second with only 3% Sukuks in Value. The diversification of funding sources, Creating and enhancing, secondary liquidity and ease of clearing and settlement are the main advantages to the Sukuk issuer but issuer has to consider Underlying Assets, Applicable laws – SECP rules, costs to the issuers and drafting of legal documents etc while issuing the Sukuk in the market.
Later on Mr. Hamad explained the typical international Sukuk mechanism like identification of assets forming the sukuk pool, sale of the sukuk pool to an SPV (special purpose vehicle), Lease/Ijarah of sukuk asset to an entity, issuance of the sukuk securities, trade mechanism and redemption of sukuk securities. He presented the case study of Sukuk issued by Wapda on January 2006 and July 2007 and following were Key objectives which were successfully achieved:

1. To raise financing in a cost efficient manner.
2. To Strengthen its presence in the local financial markets.
3. To diversify and cultivate WAPDA’s investor base.
4. To undertake a landmark transaction which will catalyze the promotion of Islamic financial instruments and lead the way for other public sector entities?

At the conclusion of this workshop Mr. Hamad Rasool also looked after the queries and interactive questions from the participants  regarding sukuk issuance its investor base and regulatory requirements and developments over the last three years or so.

Challenges for Islamic Banking, Finance, Takaful and :

1. Misconceptions and lack of knowledge about Islamic instruments.
2. Competition from Conventional financial system.
3. Shortage  of quality Human Resources.
4. Synergizing between the Shariah requirements with the legal and taxation framework.
5. Innovation in Shariah compliance and viable products.
6. Legal framework and Liquidity Management.
7. Balancing between the monetary gains and fulfilling the Shari’ah objectives.
8. Issues of transparency and an under developed infrastructure.

               Recommendations to tackle Challenges:

1. Working knowledge of Arabic needed for understanding of the Qur’an, the Sunnah and Fiqh literature.
2. Knowledge of Ayat and Ahadith that deal explicitly and implicitly with financial matters.
3. Knowledge of Islamic jurisprudence, the methodology of usul-al-fiqh and the objectives of shari’ah as well as the qawaid-al-fiqhiyyah.
4. Competence to conduct Ijtihad in the  development of new Islamic products.
5. Every Takaful Operator should have a Shariah Board of not less than three members and there will be Central Shariah Board in SECP.
6. Awareness and training of staff especially product related compliance.
7. Shariah compliance issues in Islamic banking can be solved by developing   proper internal shariah audit mechanism.
8. The secondary market is still under developed and for sustainable growth of Islamic finance industry, money markets needs and problems must be addressed on priority basis.
9. Investments of Gulf residents in United State is estimated US $ 800 billion, these huge funds should be used for Islamic banking and finance.
10.  Existing Islamic banks should look at microfinance both as a moral obligation and business opportunity. 
11.  A large range of products needed to be expanded to fulfill diversified requirements of the clients.
12. Compliance with accounting and auditing standards issued by  the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
13.  Islamic financial institutions should consider pooling their resources and networking for establishment of state of the art continuing education institutes in Islamic banking and finance.

1. There should be a Shariah Supervisory Board for any institutional Islamic investment body, and that such  Shariah Supervisory Board should consist of trustworthy scholars who are highly qualified to issue fatwas on financial transactions.
2. The funds of the Islamic investment product and of the financial institution, in which Shariah provisions are not observed, must be completely segregated.
3. Competitive pricing strategies should be formulated to attract investors that  will lead  to make a difference with conventional products offered by  banks.
4. Shariah advisors are the backbone of the industry without which the integrity of the whole industry will be at stake.
5. Advisory services are an amanah (responsibility) and must be discharged with utmost professionalism and integrity
6. More interactions is needed between the Shariah advisors and the market players so that the supervisory role will be enhanced.
7. Shariah scholars must ensure that all the decisions made are realistic and serve the interest of the Ummah.

Conclusion

Today there are more than 500 Islamic Financial Institutions operating all over the world ranging from China, Malaysia, Indonesia, India, Pakistan, Middle East, United Kingdom, Switzerland, Germany, Luxembourg and USA and Canada with the bulk of presence in Middle East, more than 250 Shariah Compliant mutual funds are managing about $ 11 billion in assets and around 300 institutions currently contribute to the Islamic finance industry world wide. According to reports, the greatest spread of the industry has taken place in the six member Gulf Cooperation Council (GCC), which includes Saudia Arabia, Bahrain, Kuwait, Qatar, Oman , United Arab Emirats and in GCC alone 18 Islamic banks are working.

With new technology and international standards, Islamic finance could further expanded to create more products acceptable internationally but there  is need to broaden understanding and knowledge on Islamic finance in line with current market developments. With greater awareness and knowledge of the Islamic finance principles of market instruments such as hedging and derivatives as well as debt instruments, Islamic finance could make a greater impact and gain lager share of the financial market. 

Now the whole financial system of the globe is rapidly reshaping the world. Japanees are welcoming the Islamic finance, France has shown its keen intention to facilitate the growth of Islamic finance in the country by making adjustments in its economic and legal frameworks, UK has launched first ever  Shariah Compliant insurance company, Salaam Halal Insurance Ltd and due to Muslim population South Africa also  recording growth in Islamic finance.  

The success of Islamic banks, financial institutions and businesses is directly related with highly-qualified business and finance managers with communication skills, knowledge of shariah and present day international business and finance. This can be achieved through Islamic research and training institutes of continuing education fully accredited with recognized universities. It is an uphill but promising and rewarding enterprise, no less than a gift to humanity. The existing workforce in Islamic business and finance institutions must enhance its capacity through short-term courses developed by various academic institutes in a modular form. Similarly, fresh human resource is to be developed as future leaders in Islamic finance.

Looking further ahead, there is scope to expand the market for Islamic products and services to non-Muslims as well as Muslims. The market is not confined to a particular group of consumers and Islamic finance providers can position their products to appeal more to the much larger non-Muslim population.

“Islamic banking and finance will emerge as a force to be reckoned with in shaping the future development of global finance …..”

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As international players are capitalizing the enormous growth potentials so they enter through Islamic banking windows, independent branches, full fledged subsidiaries and fully converted Islamic banks. As the market players are rapidly increasing but on the hand competition becoming stiffer and the customers becoming smarter to demand much more than Shariah Compliance.