Sudan is officially adopting a dual banking system, allowing interest-based banks to operate in the country, in a bid to open up following years of isolation. Meanwhile, a spate of new Islamic funds were launched in Egypt, Switzerland and Nigeria, and South Africa is looking to issue its sophomore Sukuk worth US$3 billion to follow up its debut issuance in 2014.
All these and more in this week’s IFN market round-up.
Sudan implements dual banking
Sudan, previously one of only two fully-fledged Islamic financial systems in the world, has officially opened its doors to conventional banking, adopting a dual banking mechanism. The move is part of the government’s plan to attract a more diverse pool of investors in its attempt to rejoin the international community after a decades-long isolation.
Separation of Islamic and conventional funds
Algeria’s High Islamic Council issued a Fatwa for banks in the country to separate Islamic and conventional funds, requiring them to also allocate funds dedicated to Islamic finance. The country had recently welcomed its third Islamic banking window operated by a private bank.
Nigeria partners with Brazil
The Nigerian government secured a US$1.2 billion financing facility, guaranteed by the IsDB and the Islamic Corporation of Insurance for Export Credit, from the Development Bank of Brazil. The funds will be used to support Nigeria’s agricultural and agro-processing projects.
Best Overall Islamic Bank 2020
The global Islamic finance and banking industry has voted Meezan Bank as the IFN Best Overall Islamic Bank of 2020, given its performance in a particularly difficult year as the COVID-19 pandemic took over public health and the world economy. Read more about Meezan Bank’s year here.
ICD and Uzbek bank sign agreement
The Islamic Corporation for the Development of the Private Sector (ICD) signed a US$25 million Islamic financing agreement with Uzbek Industrial and Construction Bank for the latter to finance businesses in the local private sector. The Uzbek banking sector has been preparing to launch Islamic windows, pending official legislation.
New Islamic funds
Malaysia’s Principal Asset Management announced plans to expand its Islamic product offerings with new strategies that include Islamic ESG [environmental, social and governance] Global Equity, among others.
In Switzerland, Horizon Capital established a Shariah compliant trade finance fund certified by Bahrain’s Shariyah Review Bureau, while Nigerian financial services group Norrenberger launched the Norrenberger Islamic Fund, an open-ended mutual fund with short-, medium- and long-term securities.
Iran’s new initiatives in 2021
The Iran Fara Bourse is preparing to launch a capital market sandbox for regulatory and fintech initiatives within the next few months, as well as a new over-the-counter market that focuses on negotiation deals. Listen to this week’s podcast episode with Iran Fara Bourse here.
Meanwhile, Bank Melli Iran launched its digital banking roadmap, the first in the country and in support of the Ministry of Economic Affairs and Finance’s push for digital transformation in Iran’s banking sector.
Islamic Naya certificates for UK and Europe
The Pakistani government is preparing to issue Islamic Naya Pakistan certificates denominated in the pound sterling and euro, to serve the Pakistani diaspora in the UK and Europe. The certificates debuted in October 2020.
Also in Pakistan, the Lahore Development Authority signed an agreement worth PKR10 billion (US$62.72 million) with Bank of Punjab, under which a consortium of banks that include Islamic players will provide mortgage financing and soft loans under Takaful.
Promoting Islamic savings
Government-owned savings and investment firm National Bonds Corporation set up an office in Sharjah, in addition to its existing branches in Dubai, Al Ain and Abu Dhabi, to build a Shariah compliant savings culture in the third-largest emirate.
Meanwhile, Moody’s Investors Service predicts that global Sukuk offerings in core countries will moderate in 2021 on the back of narrower financing needs driven by improved oil prices and economic activity and lower expenditures related to COVID-19.
The ratings agency also said in a separate report that the Islamic finance market share in South and Southeast Asia is expected to grow faster than its conventional counterpart.
Dar Al Takaful settles early
UAE-based Dar Al Takaful has made an early repayment worth AED100 million (US$27.22 million) out of the AED215 million (US$58.52 million) secured from Emirates NBD Bank for the acquisition of Noor Takaful.