Islamic finance an alternative to build Padma bridge

[Hammer-fist]

'Sukuk' an alternative source of financing for constructing Padma Bridge

Published : Wednesday, 06 February 2013

(from left) Wali-ul-Maroof Matin, Managing Director, Alliance Capital Asset Management Ltd, Abdul Mannan, Managing Director, Islami Bank Bangladesh Ltd, Shah Abdul Hannan, former deputy governor of Bangladesh Bank & Chairman, Central Shariah Board of Islamic Banks and Ahmed A Khalid of Islamic Development Bank seen at the IFN Road Show 2013 held in a city hotel Tuesday. — FE Photo


FE Report

Islamic 'Sukuk' could be an alternative source of financing for constructing Padma Bridge.

Sukuk is one type of Islamic Bond, which is asset based or asset-backed, where there is an asset (or pool of assets) underlying every transaction and the ownership of that asset or pool is transferred to investors.

A day-long international conference on Islamic finance, titled 'Islamic Finance news Roadshow' held Tuesday in the city discussed on the issue. The Islamic Finance news Roadshow brought together world's industry experts and the market movers of the country's Islamic finance industry.

"Thus investors enjoy all rights and obligations that accompany ownership. In asset-backed structures sukuk holders have recourse to the underlying assets," Touhidul Alam Khan, one of the panelists said.

The other panelists and delegates have also gave their thought-provoking speeches on this issue suggesting that the Government of Bangladesh can work on it through cross-border "SUKUK" transaction to raise required fund under syndication process.

This one-day event was address key issues pertinent to the country's Islamic financial market, Challenges & Opportunities in Bangladesh's Islamic

Finance Sector, Possibilities and Opportunities for Diversification of Islamic Products, Facilitating Shariah Compliant Investment Flows in Bangladesh and South Asia through innovative products, structures and channels, crucial steps to take Bangladesh's Islamic Finance to the Next Level.

Among them, Ahmed A Khalid - Regional Head (Asia), Coverage & Partnership Department, Islamic Corporation for the Development of the Private Sector, Islamic Development Bank, Aishath Muneeza - Head of Islamic Finance, Capital Market Development Authority, Maldives, Md. Touhidul Alam Khan, ACMA Senior Executive Vice President & Head of Corporate Assets & Client Origination of Bank Asia, Bangladesh, Mufti Ehsan Waquar Ahmad - Shariah Consultant, Pakistan, Mahbub Jamil - Head of Structured Finance, NDB Capital, Mahmud Hossain - Chief Executive Officer & Co-Founder, Millennium Information Solution, Dr. Md Mizanur Rahman - Senior Vice President, Research and Development, Islami Bank Bangladesh, Mohammad Abdul Mannan - Managing Director, Islami Bank Bangladesh, Mohammad Shoaib, CFA - Chief Executive Officer, Al Meezan Investment Management, Pakistan, Mushfique Mahmud - Legal Consultant, Dar Al Sharia, Shah Abdul Hannan - Former Chairman, Islami Bank Bangladesh & Founder Member, Central Shariah Board of Islamic Banks and Wali-ul-Maroof Matin - Chairman & Managing Director, Alliance Capital Asset Management were present.

The growth potential for Bangladesh's Islamic finance industry is enormous, and coupled with a steadily growing economy and financial reforms. With support from the Bangladesh government, financial regulators and the central bank, Bangladesh can be poised to become the next hub for Islamic finance in Asia and on a global scale, the world Islamic scholars opined in the Roadshow.

Ms. Navina Balasingam, Events Program Director of RedMoney Group, Malaysia anticipates that this Islamic Finance News Roadshow- 2013, Bangladesh will help to explore the growth opportunities for Islamic finance, as well as tax and regulatory developments to boost the country's Islamic capital markets. With the proper implementation of regulations, education and understanding of Islamic financial products, and the provision of sufficient infrastructure, Bangladesh is set to become a major player in the field of Islamic finance of the world.

The RED Money, organizer of the workshop is working on expanding the realms of Islamic finance all over the world. It has been organizing key Islamic finance events for eight years with the focus heavily on education and development. Besides, IFN Roadshow has been visiting key developing Islamic financial markets for the last six years to guide and assist all interested parties to development.

In the conference more than 100 delegates from all over the globe, who are mainly market experts and regulators attended and shared their knowledge and expertise with the Bangladeshi market, and explore the opportunities within the country for Islamic issuers, investors, corporate and financial institutions.

Financial Express :: Financial Newspaper of Bangladesh


@CaPtAiN_pLaNeT @UKBengali @madx @Moander @ShadowFaux @iajdani @eastwatch @asad71 @animelive @DURJOY @RiasatKhan @Banglar_Bagh and other nationalists, feel free to comment.

 

[Mattrixx]

We should choose best option and construction should be start at once.

 

[scholseys]

Awami League hoping god will save them!

Banks currently lack funds due to Awami League destroying our banking sector with rampant corruption and our share market. Public will not buy these bonds due to the lack of trust on the government based institution. This 'alternative' is nothing but a pipe dream. Awami League's plan is to set 2 pillars one on each side of the river padma and then claim they have started the construction of padma bridge, right now they are only into damage control, nothing else.

 

[livingdead]

yep, you will get it at 0% interest, go for it.

 

[ShadowFaux]

Acchha, I haven't read the whole thing. But just saw the name of Islami bank. Errr, some say they have a Jamat connection. Don't know whether it's true or not. Keu jene thakle janaben. Anyway, it should be made sure that any kind of jamati invlovement is avoided.

If solid backing can be made through Islamic finance, then why not?

 

[Hammer-fist]

Bangladeshi nationalism is increasing.

1. The Bangladeshi government has clashed with the west including America and Germany over some issues and told them off, something which many brown third world countries would not do.

2. A nationalist seeks not to rely on others and seeks self-sufficiency, our brothers in Turkey under the AKP government have pursued such a path.

I don't know if we can finance this project from our own resources, but we will definitely be able to do so in the future with the continued growth of the Bangladeshi economy.

Acchha, I haven't read the whole thing. But just saw the name of Islami bank. Errr, some say they have a Jamat connection. Don't know whether it's true or not. Keu jene thakle janaben. Anyway, it should be made sure that any kind of jamati invlovement is avoided.

If solid backing can be made through Islamic finance, then why not?

Though I hate Jamat, I have no problems if a bank with Jamati organization is connected, as long as the bridge is constructed.

It is not as if they are influencing legislation, national policies or international relations.

Anyway fundamentally building the bridge is bad for the senior Jamati leadership (not for the more sincere ground level types) as it means a stronger and more prosperous Bangladesh. A stronger and richer Bangladesh means virtually no chance of Bangladesh becoming part of Pakistan, which is the secret goal of the elite leadership of Jamat.

So Jamatis helping to build the bridge is an act of treason against their pro-Pakistan ideology.

 

[ShadowFaux]

Anyway fundamentally building the bridge is bad for the senior Jamati leadership (not for the more sincere ground level types) as it means a stronger and more prosperous Bangladesh. A stronger and richer Bangladesh means virtually no chance of Bangladesh becoming part of Pakistan, which is the secret goal of the elite leadership of Jamat.

So Jamatis helping to build the bridge is an act of treason against their pro-Pakistan ideology.

They sure will try to influence the system. But they will fail because people know better. And that would be epic.

 

[Hammer-fist]

They sure will try to influence the system. But they will fail because people know better. And that would be epic.

The irony...Jamatis contributing to the prospering of a country they seek to destroy.

A state they seek to destroy as a sovereign independent nation.

 

[ShadowFaux]

The irony...Jamatis contributing to the prospering of a country they seek to destroy.

A state they seek to destroy as a sovereign independent nation.

Their doors are shutting down lol. If BNP leaves jamat today and an election takes place tomorrow, BAL wont even get 20% vote. lol. BNP will ultimately leave them.

 

[Hammer-fist]

Their doors are shutting down lol. If BNP leaves jamat today and an election takes place tomorrow, BAL wont even get 20% vote. lol. BNP will ultimately leave them.

If the BNP do not need Jamat to form a coalition they will dump them in an instant.

1. BNP would want exclusive power and not share it with Jamatis.

2. Some in the BNP dislike/hate Jamatis anyway as traitors.

Anyway if there is a coalition Jamat will enjoy very little power and get minor cabinet posts but still be hated by the majority of the nation for the traitors that they are.

 

[Anubis]

I like the Islamic Bond idea as it has 0% interest.....but what asset are they going to keep as mortgage??If we can afford to give them that asset for a definite period of time then I do not see any reason not to do so.Besides if this works out we could use it for future projects too.As for Islami Bank I feel a little itchy about it.I think we should go with other banks that provide Islami Banking services example-Dhaka Bank,Exim Bank etc.

 

[scholseys]

I like the Islamic Bond idea as it has 0% interest.....but what asset are they going to keep as mortgage??If we can afford to give them that asset for a definite period of time then I do not see any reason not to do so.Besides if this works out we could use it for future projects too.As for Islami Bank I feel a little itchy about it.I think we should go with other banks that provide Islami Banking services example-Dhaka Bank,Exim Bank etc.

no money left in those banks, awami league has used them to finance the quick rental power plants.

 

[Anubis]

Their doors are shutting down lol. If BNP leaves jamat today and an election takes place tomorrow, BAL wont even get 20% vote. lol. BNP will ultimately leave them.

Like the last election.....BAL allied with Jatiyo Party but later found out that it was unnecessary.

 

[TopCat]

People just does not know how Islamic financing works. They charge more fees and profit than the regular bank.

A glimpse of how Islamic bank finance a venture.

1) Cost of constructing a building say 3 crore and you want bank financing.
2) Islamic bank will say ok Bank will buy 3 crore worth of product and services for that building but you buy them from bank instead of shops for say 5 crore. And bank will make profit of 2 crore. That 5 crore taka you have to pay in installment for about 5-10 years.
3) If you fail any installment, the bank will not charge you any composite interest on the outstanding rather charge you a fine which is more than the composite interest.

See there is no interest in the whole banking process yet its worse than the interest...

Only Dr. Yunus is the culprit but Islamic Banks which are saint as the name starts with Islam. Idiots

 

[animelive]

People just does not know how Islamic financing works. They charge more fees and profit than the regular bank.

A glimpse of how Islamic bank finance a venture.

1) Cost of constructing a building say 3 crore and you want bank financing.
2) Islamic bank will say ok Bank will buy 3 crore worth of product and services for that building but you buy them from bank instead of shops for say 5 crore. And bank will make profit of 2 crore. That 5 crore taka you have to pay in installment for about 5-10 years.
3) If you fail any installment, the bank will not charge you any composite interest on the outstanding rather charge you a fine which is more than the composite interest.

See there is no interest in the whole banking process yet its worse than the interest...

Only Dr. Yunus is the culprit but Islamic Banks which are saint as the name starts with Islam. Idiots

My father once went to an Islamic Bank to know how it works. So this guy says that they pay x% of investment every year if you keep it in bank, but they changed the name of interest to something else(forgot, sorry)