According to Fitch Ratings (Fitch), growth in Oman’s Islamic banking sector is likely to continue into 2021-2022 building on the strong momentum seen in 2020, despite the dual impacts of COVID-19 and lower oil prices.  Why it matters?  The penetration of Islamic banking and finance products is expected to keep rising, with Islamic financing in Oman having risen a strong 9.5% in 2020 versus just 2.1% growth in loans from conventional banks. Demand for Islamic banking and finance products is the main driver, tog...

The Shariah Board of Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) has endorsed the Shariah Standard on Payment Cards, which is an update from the first standard issued on cards 17 years ago, according to a statement issued by AAOIFI.  Why it matters? Due to substantial technical developments in financial transactions, the AAOIFI’s Shariah Board resolved to re-look into the present version of the Standard and re-issue the Standard by keeping pace with recent developments. The new Standard was issued after several me...

The United Kingdom (UK) Debt Management Office (DMO) has announced its intention of issuing the country’s second sovereign Sukuk in the near future on behalf of HM Treasury, which is the UK Government’s Economic and Finance Ministry, according to a DMO statement issued on the 22nd of March 2021.  Why it matters?  The issuance will be UK’s second sovereign Sukuk, following its debut issuance in June 2014. The second sovereign Sukuk was originally planned to be issued in early 2020 prior to the COVID...

Bangladesh Bank (BB) intends to introduce a separate quota for Sukuk; however, the volume or percentage is yet to be confirmed. A BB official from the Debt Management Department has hinted that it could be 40%-50% for Islamic banks or for the Islamic banking windows of other banks. BB has also asked the National Board of Revenue (NBR) to categorise profits earned by individual investors from Islamic bonds as tax-free income. The NBR is yet to respond.  Why it matters?  Amidst growing demand for Sukuk, BB is determined to make it an attractive ch...

The Government of Maldives, acting through the Finance Ministry, has hired a group of banks to arrange a USD-denominated issuance of benchmark Sukuk, according to a document released on the 22nd of March 2021. Moody’s Investors Service (Moody’s) has assigned a B3 backed senior unsecured rating to the proposed Sukuk issuance.   Why it matters?  Proceeds of the Sukuk issuance will be partly used to fund a tender offer for the Government’s outstanding USD 250 million bonds at 7% that are set to mature in June 2022. ...

A new fintech unicorn, Mambu, has announced the launch of the Shariah-compliant version of its Software-as-a-Service (SaaS) banking platform. This is the first cloud-native platform that complies with the requirements of Islamic banking, and caters to the requirements of Islamic banks and lenders. The platform was made available to clients at end-2020. Why it matters?  Over 1.8 billion Muslims around the globe are underserved in terms of Shariah-compliant solutions to transact with money and Islamic financial institutions are continually lo...

PMB Investment, a Malaysian-based Islamic fund management company and member of Pelaburan Mara Group, has recently launched the PMB-An-Nur Waqf Income Fund (the Fund), as a joint venture with Waqaf An-Nur Corporation (WANCorp), which is the Waqf administrator of the Fund.  Why it matters?  This is the 17th fund managed by PMB Investment and provides investors income and capital growth over the medium to long term by investing in a portfolio of Shariah-compliant investments. The Fund also provides the abili...

Qatar International Islamic Bank’s (QIIB’s) shareholders have approved a Board of Directors (BOD) recommendation to issue up to USD 1 billion Tier-2 Sukuk once the required approvals from the authorities concerned have been obtained. The virtual ordinary general assembly endorsed the BOD recommendation to extend last year's general assembly approval of the USD 2 billion Tier-1 Sukuk (which was approved at the 2019 Annual General Meeting) and delegated to the BOD the decision-making with regard to the size of each issuance, terms and conditions, and issuance currency. QIIB has...

RAM Ratings (RAM) has downgraded MEX I Capital’s (MEX Capital) MYR 1.35 Billion Sukuk Musharakah (2014/2031) (the Sukuk) Rating to C3/Negative from BB1/Negative.  Ratings and Outlook Rationale The rating downgrade is based on MEX Capital’s continued liquidity issues and increased default risk amid plummeting traffic volumes along the Maju Expressway (MEX or the Highway). In addition, the downgrade is attributed to delays in the conclusion of the company’s planned restructuring exercise to refinance the Sukuk.  The O...

Pakistan Mortgage Refinance Company (PMRC) and its Partner Financial Institutions have issued Sukuk Musharakah (Sukuk) worth PKR 3.1 billion via private placement to promote housing finance in Pakistan, according to local media reports.  Why it matters?  This is the first time in Pakistan’s financial history that the private sector has issued Sukuk Musharakah with the aim of promoting the housing sector. The Sukuk has a unique Shariah-compliant structure under which investors and PMRC will enter into a Musharakah Agreement to create Musharakah in the Hou...