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Global Leaders in Islamic Finance: Industry Milestones and Reflections

Global Leaders in Islamic Finance: Industry Milestones and Reflections

Emmy Abdul Alim

ISBN: 978-1-118-46523-3

Oct 2013

320 pages

$28.99

Description

Interviews with the professionals driving the rapid global growth of Islamic finance

Though the modern Islamic finance system has existed for more than forty years, its size and influence in the banking industry has expanded massively in just the last decade. This book looks at Islamic finance from the perspective of the experts shaping the industry, including some of the founders of the first Islamic banks—Haj Saeed Lootah, His Royal Highness Prince Mohamed Al Faisal Al Saud, and Sheikh Saleh Abdullah Kamel—as well as other professionals who have greatly influenced the industry. Editor Emmy Alim offers rare insight on Islamic finance with these insightful interviews focused on the development, rise, and future trajectory of Islamic finance.

  • Features rare insider perspective on the rise of Islamic finance with interviews from the top names in the industry in Asia, the Middle East, Europe, and the United States
  • An ideal resource for bankers and finance professionals working in traditional finance as well as Islamic finance
  • Written by Emmy Alim, Editor for Thomson Reuters Islamic Finance Gateway, a multi-platform forum for experts and professionals in the Islamic finance industry

Acknowledgments xiii

Selected List of Acronyms xvii

Introduction xxi

Chapter 1 The Islamic Economist/Activist 1
Khurshid Ahmad

Early Influences:Muhammad Iqbal, Muhammad

Asad, and Sayyid Abul A’la Mawdudi 3

Operationalising Islam: Sayyid Abul A’la Mawdudi and Jama’at-e-Islami 5

Milestone: First International Conference on Islamic Economics 8

International Influence: Islamic Economics as an Academic Discipline 10

Spreading the Message Abroad: Europe and the Islamic Foundation in the United Kingdom 14

Islamisation of the Pakistani Economy 15

Islamic Economics versus the Narrow Pursuit of Profit 19

Forty Years On: The Wood for the Trees 21

The Last Word 24

Chapter 2 The Very First Mover 25
Saeed Bin Ahmed Al Lootah

Always Begin at the Beginning 27

Dubai: The Environment 30

Dubai Islamic Bank: Early Response 32

First Islamic Banking Conference—May 1979, Dubai 34

Development and Challenges 35

DIB, UAE, and Corporate Governance 39

Hajj Saeed, Dubai, and the Islamic Economy 41

Forty Years On 43

The Last Word 45

Chapter 3 The Well of Influence 47
Prince Mohamed Al Faisal Al Saud Germination 48

Catalysis: The Establishment of Dar Al-Maal Al-Islami 52

The Business of DMI: Navigating Uncharted Waters 58

Current Holdings 62

Forty Years On: ‘‘The Aura Is Much Bigger than the Reality’’ 64

‘‘The Muslim World Went to Sleep’’ 72

‘‘Eventually, I Think, Everybody Will Become a Salafi’’ 77

The Last Word 80

Chapter 4 Steadily Spreading the Blessings 81
Saleh Abdullah Kamel

Spreading the Baraka 84

Gone West: Al Baraka in the United Kingdom 88

Advancing the Islamic Economy 91

Islamic Megabank 91

World Zakat Fund 93

The Halal Industry 94

Ask Not What the Community of Islamic Countries Can Do for You 95

Forty Years On: Mechanisms over Maqasid 96

The Last Word 99

Chapter 5 The Systematic Rise of a National Industry 101

Mahathir Mohamad and the Malaysian Story Lead-up to the 1981 Decision 102

Influence #1: Tabung Haji 103

Influence #2: Tunku Abdul Rahman, the OIC, and the IDB 103

Influence #3: Prince Mohamed Al Faisal Al Saud 105

National Steering Committee and Establishing Bank Islam 105

Building an Industry Systematically 108

Setting the Pace and Character of Overall National Economic Development 108

Phase 1: 1983 to 1993—Establishment and Entrenchment 109

Shari’ah-Compliant Financial Instruments 113

Phase II: 1993 to 2000—Liberalisation and Expansion 114

On Growth and Development 116

Islamic Capital Market: Malaysia as a Global Sukuk Leader 117

A Model Nation for Islamic Finance 122

Phase III: 2000 and Beyond—Internationalisation 126

The Better System 127

Thirty Years On: And Still Much More to Be Done 132

The Last Word 137

Chapter 6 The Islamic Economist 139
Abbas Mirakhor

The Second Stage of Islamic Economics 141

Risk Transfer and the Global Financial Crisis 145

Humanity 147

‘‘In Islam, the ‘Other’ Doesn’t Exist’’ 151

IMF and Islamic Finance 152

Forty Years On: The Wood for the Trees 155

Building the Roads to a Better Economy 158

The Last Word 160

Chapter 7 The Global Standard-Setter 161
Rifaat Ahmed Abdel Karim

Accounting for a New Paradigm 163

AAOIFI: A Landmark in the History of Modern Islamic Finance 167

Setting the Standards 168

IFSB: Working with the Regulators 172

Changing the Landscape: Integrating Islamic Finance into the Global Financial Architecture 178

Twenty Years of Setting Standards for Islamic Finance 181

Moving Forward 183

The Last Word 184

Chapter 8 The Shari’ah Scholar 185
Sheikh Nizam Yaquby

The Role of Shari’ah Scholars in Islamic Financial Institutions 188

What Is Shari’ah Compliance? 189

Shari’ah Compliance for an Ethical Society 191

Second-Generation Shari’ah Scholars 196

On Training Shari’ah Scholars for Islamic Finance: Climb the Stairs One by One 197

Two Boards, Three Boards, Four Boards, Five. How Many Is Too Many? 199

Great Strides in Islamic Finance: The Contribution of Shari’ah Scholars 203

‘‘Monumental Fatwa’’: Dow Jones Islamic Market Index 204

Forty Years On: The Wood for the Trees 206

The Last Word 208

Chapter 9 The Lawyer 211
Michael J.T. McMillen

Many Firsts 213

‘‘The United States Is Probably the Second Largest Islamic Finance Market in the World’’ 217

‘‘The United States Is One of the Easiest Places in the World to Do a Shari’ah-Compliant Deal’’ 220

Consulting and Structuring Deals Worldwide 222

Critical Factors for the Development of Islamic Finance 222

Code of Conduct: Lawyers and Shari’ah Scholars 226

Sheikh Muhammad Taqi Usmani Sukuk Pronouncement 228

On Freely Circulating Fatawa 229

101: On Wholesale and Retail 230

Maqasid al Shari’ah and the Non-Muslim Islamic Finance Lawyer 232

Seventeen Years On: The Woods for the Trees 233

The Last Word 234

Chapter 10 The Equity Capital Market Man 237
Rushdi Siddiqui

Building Indices and Benchmarks for the Global Industry 239

Global Viability: Outperforming Conventional Indices and Averting Enron 241

Wherefore the Pulse?: Shari’ah-Compliant and Shari’ah-Based Indices 244

Gaps and Disconnects 248

Major Disconnect: On Information 252

The United States of America, Islam, and Islamic Finance 253

The Halal Industry 256

The Last Word 258

Chapter 11 More than the Sum of Its Parts: Forty Years of Islamic Finance 261
Growth beyond Expectations 263

My Shari’ah, Your Shari’ah: What Is So Authentically Islamic about This System? 266

A Viable Business Model 270

Beyond Banking and Finance: The Islamic Economy 273

The Last Word: Commitment to the Islamic Basis as a Better Way 275

Glossary 279

References 283

About the Author 297

Notes 299

Index 315