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| The Documentation
of Islamic Banking Products The Conference on The Documentation of Islamic Financial Products, organised by The Institute of Islamic Banking and Insurance (IIBI), London, in conjunction with The Islamic Development Bank (IDB), Jeddah, took place on the 17th & 18th of July 2002 in London. The event, attended by over 100 delegates from all over the world and representing conventional, as well as Islamic, financial institutions, proved to be a great success.
In his Welcome Address, Mr. Muazzam Ali, Chairman of the Institute, gave an inspiring presentation, citing verses from the Holy Qur'an, including those which stressed the importance of documentation in financial matters. Mr. Ali also pointed out the ills of the prevailing Western banking system, which has corrupted the world economy. He said that he hoped the deliberations of the Conference would be fruitful in helping to solve the problems the world is facing today, adding that the issues were of great importance as they had a bearing on national and international trade and industry, the backbone of every economy.
Mr Ali was followed by Mr. Paul Mills from HM Treasury, UK. Mr. Mills presented an excellent talk: "The Case Against Interest in Religious and Economic Thought." His presentation included a critique of the ethical, as well as the economic, effects of the use of interest in banking. The morning of Day One continued with Anwar Khalifa Al- Sadah, Director, Financial Institutions Supervision, Bahrain Monetary Agency, Bahrain, speaking on "The Development of Islamic Banking Supervision and Regulation in Bahrain".
Highlights of the first day included Mr. Bakkarudin Bin Ishak, Director, Islamic Banking & Takaful Department, Bank Negara, Malaysia, with his presentation entitled, "Dual Banking in Malaysia and the Development of Islamic Banking", outlining its implementation, the building of a regulatory and liquidity framework and recent developments and international initiatives, in Islamic banking; Mr. Toby Fiennes, from the Financial Services Authority (FSA), who spoke on UK regulatory requirements which was followed by a panel discussion on "Macroeconomic and Regulatory Concerns for Islamic Finance".
The afternoon of Day One included Dr. Mohamed Ali El-Gari, Professor of Islamic Economics at King Abdullah University and Sharia Advisor at The National Management Consultancy Centre, presenting his paper on "Sharia Concerns: Essential Requirements for Major Contracts", and Dr. Anas Zarqa, from The International Investor, delivering a talk on, "Basic Shariah: Essentials and Flexibilities in Designing Financial Products".
Isam Salah, of King & Spalding, gave a detailed and useful presentation on "The Application of Islamic Financial Contracts to Different Transactional Categories". Mr. Salah discussed Islamic property acquisition and financing structure, Islamic corporate acquisition and financing structure, Islamic working capital facilities, Islamic home-financing, etc. He was followed by Professor Rodney Wilson, University of Durham, UK, with an excellent talk on, "Reconciling Different Interpretations of Islamic Law and Standardising Financial Products".
The sessions during Day One were respectively chaired by Mr. Tariq Hameed, Senior Actuary, William M. Mercer, Sheikh Dr. M. A. Zaki Badawi, Principal, Muslim College, London, Dr. Abdin Salama, Senior Sharia Advisor, Al Rajhi Investment Bank and Mr Mabid Ali Al-Jarhi, Director, Research & Training Institute, IDB.
On the evening of the 17 July, the Institute also hosted a banquet in honour of the delegates. Mr. Omar Ali, former CEO, Dar Al-Maal Al-Islami, was invited as the Chief Guest. Dr. Abbas Mirakhor, Executive Director, International Monetary Fund, was the Guest Speaker and gave a speech that inspired the audience with a new and realistic dimension of Islamic banking. The audience not only listened to him with rapt attention, but afterward derived great benefit from talking about it.
On the second day, Mr. Ghulam Hussain Yusuf, of the Abu Dhabi Islamic Bank, delivered an excellent and informative presentation on "The Assessment and Mitigation of Risks in Islamic Banking". He started with an overview of Islamic banking financing products and contracts and followed with the assessment of risk in Islamic Banking. This was followed by "Risk Management Through Documentation", a paper delivered by Mr. Mohd El-Fateh Hamid, Legal Department, Islamic Development Bank.
Ms. Sarah Gooden, of Trowers and Hamlins, UK, delivered a professional piece on "Concerns of Stakeholders/Clients (Including Deposits)". Mr. Rafe Haneef, from HSBC Amanah Finance, spoke on "The Operational Aspects of Documentation".
Day two sessions were chaired by Mr. Iqbal Khan, CEO, HSBC Amanah Finance, Dubai, Mr. Duncan Smith, CEO, ABC Islamic Asset Management, and Ms. Stella Cox, Managing Director, Dawnay Day.
Also on the second day, "Case Study: IICG (Bahamas) Ltd vs. Symphony Gems", was discussed. It was the first case brought before the English High Court concerning a Murabaha Financing Agreement governed by English Law. A landmark decision in favour of IICG confirms that English courts will enforce suitabiy- drafted Murabaha Agreements governed by English Law. Austin Hall, Clyde & Co, UK., acted for claimant IICG. Adam Greaves, Partner, International Commercial Arbitration and Litigation Group, acted for the defendants in this case. Mr. Greaves also participated in the panel discussion following the case study.
A workshop session followed by a panel discussion was organised in the afternoon of the second day. Ms. Stella Cox, Managing Director, Dawnay Day, presided over the panel discussion. The panel also included Mohamed El-Gari, Mabid Ali Al-Jarhi, Mohd El-Fateh Hamid, Habib Ahmed, Anas Zarqa, Iqbal Khan, Ghulam Hussain Yusuf, Rafe Haneef, Isam Salah, Austin Hall and Duncan Smith.
The issues were introduced by Dr. Habib Ahmed and Dr. Anas Zarqa. This was followed by group presentations on "Identifying the Issues Under the Sharia: Operational, Legal and Regulatory". In the workshop, the participants were divided into two groups. Each group was asked to list the Islamic products (leasing, murabaha, istisna', mudaraba, etc.) which their respective institutions were offering, or considering offering, in the near future. Alternatively, a project prototype requiring financing was introduced. Each group was then asked to list Islamic products that could be utilised to finance different aspects of the project.
The groups were then asked to identify the problems they were likely to face in developing the documentation of such products. The main areas of consideration were: a) Operational issues; b) Legal and Regulatory issues; and c) Sharia-related issues. A representative of each group then presented the different issues identified in designing Islamic products. A panel of experts responded to the issues raised. |
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