The Institute of Islamic Banking and Insurance held its monthly lecture Programme on the 24^th of November 2000 at the Institute’s office in London. The lecture was chaired by Mr Tariq Hameed of William M. Mercer Ltd. The topics of the discussion were: 

“Selling Islamic financial products to women  - The Hijra Experience.” Presented by Hjh Rohani bt. Dato Mohd, Chief Executive of Hijrah Trust Management Group Berhad Malaysia. Hjh Rohani gave an insight into their low risk investment fund which has a long term potential for dividends and capital appreciation.

The fund is targeted towards women and it enjoys the support of Malaysia's biggest women political movement of more than 1 million. Further that the objective behind the establishment of Hijrah Trust is "to enhance and uplift the social and economic status of women and to increase women's investment literacy rate via relevant custom-made solutions." 

 “Zero Interest Banking and Inflation Free Economy” was presented by  Mr Shahid Jamil FCA. Mr Jamil looked into the reasons for zero interest banking, the countries in which it is being practised and outlined the concepts of the system. He also discussed the advantages of an inflation free economy and concluded that implementation of this system if properly managed would lead to repayment of national debt, off budget funding for vital social sectors, elimination of mass poverty and greater social justice. 

On the 25th September 2000 the institute of Islamic Banking and insurance hosted a lecture on “Monitoring the performance of Islamic Equity Funds", chaired by Mr Mukarram Ali, President of the Institute. The distinguished speakers were Mr. Tariq Al Rifai of The International Investor (TII), who is also the President of Failaka International, and Mr. Bernard Taylor, Managing Director, Jevington Associates Ltd.

There are currently 102 Islamic equity funds on the market including more than ten announced this year. Unfortunately, Islamic investments have been plagued by negative publicity and mishaps, which have led many Muslims to be cautious towards Islamic finance. However, the situation is now changing mainly due to the introduction of Islamic indices such as the DMI 150, the Dow Jones and the TII/FTSE.

Hence, the necessary parameters are being put in place as standards and benchmarks are being established, which with the growing awareness and interest of Muslims in the industry, marks animportant juncture for the future industry. In light of these developments Mr Al Rifai gave an interesting insight into the development of Islamic Equity Funds. He stated that for more than three years Failaka International has been monitoring over half of the Islamic equity funds world wide and suggested that total assets in Islamic equity funds are approximately 1.5 billion. Due to the problems in gathering data from financial institutions, Failaka is yet to obtain an accurate figure of the industry size, which in his opinion is close to $2 billion.

According to him the key driving forces behind the development of Islamic equity funds are the growing pressure in Muslim countries to develop Islamic financial services and the increasing awareness of the religious beliefs among Muslims for Shari'ah compliant products. He explained that other major factors are the role of financial markets in daily life, new distribution channels (Internet, partner- ships), and the growing demand for capital protected funds because of the " volatility in the past. The indices such as FTSE and Dow Jones Islamic Index have also led to a global exposure of Islamic funds. The development of Islamic Indices has also brought attention of investment and financial community as these indices set a benchmark for the investors. He also said that due to the explosion of Islamic Equity funds in the market there is a huge need for fund research and development.

Mr. Bernard Taylor discussed in detail about structuring indices and issues regarding index tracking. In general he suggested that in order to use an index properly, one needs to be informed as to its workings.

Mr Taylor pointed out there is still great potential within the Islamic financial system for setting up indices in particular for Islamic companies being that they would reflect the Islamic perception of an economy, as their activities are Shariah compliant. He raised important issues such as having the right portfolio, careful knowledge of indices and factors that dominate them.

IIBI Lecture On Friday 14th July the Institute of Islamic banking and Insurance hosted a lecture on "The Regulation of Islamic Banking" chaired by Dr. Mahmoud Faruqui and presented by Professor Rifaat Abdul Karim, secretary general of the Accounting and auditing organisation for Islamic Financial Institutions (AAOFIF).

Dr Rifaat Abdul Karim gave a detailed and interesting insight into AAOIFIs endeavours which recently also includes the setting up of a 15 member Shariah board which some commentators cite as being important to the future development of Islamic banking.

AAOIFI, based in Bahrain, was established in 1991 by Islamic financial institutions and other interested parties, to set international accounting and auditing standards for Islamic financial institutions based on the Shariah precepts. AAOIFI's pronouncements are intended to serve Islamic financial institutions in the various countries in which they operate.

To date, AAOIFI has issued financial accounting statements relating to the objectives and concepts of financial accounting for Islamic financial institutions, accounting standards, auditing standards, a code of ethics for accountants and auditors of Islamic financial institutions, and three exposure drafts - two accounting and one auditing.

AAOIFI does not have the power to force Islamic financial institutions to implement the standards it promulgates. AAOIFI has, therefore, pursued a strategy of having its standards implemented through co-operating with the concerned governmental and professional agencies - central banks and bodies responsible for implementing accounting standards.

This approach has proved successful with the supervisory authorities in Bahrain and Sudan asking Islamic banks to adhere to AAOIFI's standards in preparing their financial statements. Some Islamic banks in other countries, for example, Malaysia and Saudi Arabia, have also started to voluntarily use AAOIFI's accounting standards to prepare their financial statements. Furthermore, international rating agencies have also started to take AAOIFI's standards into consideration when rating Islamic banks.

The lecture was very well attended by a cross section of representatives from Islamic financial institutions and representatives from the UK Financial Services Authority (FSA).