Islamic Finance The Need To Emerge From The Conventional Shadows

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1.       Islamic ϐinance: The need to emerge from the conventional shadows ISLAMIC FINANCE By Youssef Aboul-Naja We are all acquainted with the saying, ‘No man is an island’ which actually comes from a poem by John Donne, where it says: “No man is an island, entire of itself; every man is a piece of the continent, a part of the main.” This self-explanatory phrase is cited, more often than not, to highlight our interconnectedness to each other; no one person is self-suĜcient. Yet, we often overlook the implicit reference to individualism embedded within the saying; this ‘man’, whom is perfectly deęned, is his own unique entity, while being part of the whole. To date, Islamic ϔinance has been playing within the shadows of the conventional industry, partly due to the industry’s comparatively smaller size It is important to stress that individuals and collectives alike play an important role in inĚuencing and shaping each other. For example, if we look at any one of the various systems (religion, language, culture, economics, etc), we note that any specięc subsystem has underpinnings from the collective and that specięc subsystem started translating accessible knowledge within its own interpretational lens. As the subsystem matures, it begins to produce its own set of knowledge; should it become large enough, it may even become its own respective system. newly formed discipline, Islamic ęnance borrowed heavily from its conventional counterpart. Over the next couple of decades, Islamic ęnance grew at unprecedented double-digit rates; and keeping in mind how systems behave, conventional banks began to take note. So just as Islamic institutions began ‘Islamizing’ conventional facilities, conventional banks began devising ‘Islamic windows’; channels aimed at pious-centric clients. But to date, Islamic ęnance has been playing within the shadows of the conventional industry, partly due to the industry’s comparatively smaller size. Although this may still be ęne for the time being, failure to detach from conventional practices, even in a gradual manner, may run the risk of capping the industry’s growth potential; worse yet, the Islamic ęnance industry may even be gobbled up by its conventional larger sibling. But in all seriousness, puĴing aside the doom and gloom scenario, today’s reality of the Islamic ęnance industry is nothing short of a rosy picture. The industry is in perpetual growth, orchestrated by highly motivated and innovative players capitalizing on phenomenal demand. The time is ripe for the industry to leap toward its next phase of maturity. “Turn your face to the sun and the shadows fall behind you” (CharloĴe WhiĴon). Any public opinion or media appearance is the author's independent personal opinion and should not be construed to represent any institution with whom the author is aĜliated. Youssef Aboul-Naja is an Ijarah specialist at a supranational banking institution. He can be contacted at yaboulnaja@gmail.com. Receive all the latest news via the No.1 Islamic finance based feed CROSS-BORDER FINANCING Fara Mohammad, director of Islamic ęnance, Foot Anstey CAPITAL MARKETS: Suhail Ahmad, CEO, Hikmah Capital Corp DERIVATIVES Suhaimi Zainul - Abidin, treasurer for Gulf-Asia Shariah Compliant Investment Association and advisor to 5Pillars GLOBAL ECONOMIC OUTLOOK Tariq Alrifai, expert, Islamic investment products and market trends LAW (EUROPE): Ayhan Baltaci, aĴorney at law, Bereket & Baltaci Law Firm LAW (MIDDLE EAST) Bishr Shiblaq, head of Dubai oĜce, Arendt & Medernach LEASING: Youssef Aboul-Naja, Ijarah specialist, a supranational banking institution MERGERS & ACQUISITIONS: Tushar Garg, associate, bulge bracket investment bank MICROFINANCE (ASIA): Dr Mahmood Ahmed, executive vice-president and director training, Islami Bank Training and Research Academy MICROFINANCE (AFRICA): Mansour Ndiaye, director of microęnance, Assistance and Consulting for Development PRIVATE BANKING & WEALTH MANAGEMENT: Thomas Woods, product development, wealth management, The Islamic Bank of Asia PRIVATE EQUITY & VENTURE CAPITAL: Arshad Ahmed, partner, Elixir Capital PROJECT & INFRASTRUCTURE FINANCE Anthony Coleby, head of corporate commercial department, Said Al Shahry Law OĜce (SASLO) REAL ESTATE Philip Churchill, founder partner, 90 North Real Estate Partners REAL ESTATE (MIDDLE EAST): Yahya Abdulla, head of capital markets — Middle East, Cushman & Wakeęeld REGULATORY ISSUES (ASIA) Intan Syah Ichsan , chief operating oĜcer, Samuel Aset Manajemen REGULATORY ISSUES (MIDDLE EAST): Mohammad Abdullah Malik Dewaya, head of Shariah compliance and audit, Maisarah Islamic Banking Services RETAIL BANKING: Chowdhury Shahed Akbar, oĜcer, Southeast Bank, Bangladesh. RISK MANAGEMENT: Dr Ken Baldwin, CEO, Islamic Financial Analytics SECURITIES & SECURITIZATION: Nidhi Bothra, executive vice-president, Vinod Kothari Consultants STOCK BROKING & TRADING: Athif Shukri, research analyst, Adl Capital STRUCTURED FINANCE: John Dewar, partner and head of Islamic ęnance, Milbank, Tweed, Hadley & McCloy SUKUK Anthony Coleby, head of corporate commercial department, Said Al Shahry Law OĜce (SASLO) SYNDICATED FINANCE Damir Galiev, portfolio manager, AK BARS Bank TAKAFUL & RE-TAKAFUL: Dr Sutan Emir Hidayat, assistant professor and academic advisor for Islamic ęnance, University College of Bahrain TAKAFUL & RE-TAKAFUL (AFRICA): Uwaiz Jassat, acting head of Islamic banking, Absa Islamic Banking TAKAFUL & RE-TAKAFUL (EUROPE): Ezzedine Ghlamallah, director, Solutions Insurance and Islamic Finance in France (SAAFI) TRADE FINANCE Anthony Coleby, head of corporate commercial department, Said Al Shahry Law OĜce (SASLO) TREASURY PRODUCTS: Naęth Al Hersh Nazzal, Islamic banking specialist, certięed ęnancial and investment advisor IFN Correspondents are experts in their respective ęelds and are selected by Islamic Finance news to contribute designated short sector reports. For more information about becoming an IFN Correspondent, please contact sasikala.thiagaraja@redmoneygroup.com To that end, ‘modern’ Islamic ęnance entered the ęnance world scene sometime in the mid-1970s. Like any © IFN Sector Correspondents 17 ʹ† ‡…‡„‡” ʹͲͳͷ