Put trust in the cloud says Islamic Bank of Britain COO

Banks should not be afraid to go further and faster in their adoption of cloud computing, says Mohamed Gamil, chief operating officer at Islamic Bank of Britain.

Founded in  2004, Islamic Bank of Britain markets itself as the UK’s only wholly Sharia complaint retail bank. It offers mortgage alternatives, current accounts and savings accounts as well as wealth management services, and also handles corporate business through products such as commercial property finance.

“When I came to the country six years ago, the challenge was not just that Islamic finance is a niche market, but that we are a small fish in a big ocean,” Gamil told Banking Technology. “The big players such as Lloyds and HSBC spend hundreds of millions of pounds on IT every year, while our budget is smaller. But our customers don’t expect any less customer service or less competitive rates. That’s a challenge for a small bank – and that’s why the cloud idea is just brilliant to fit that purpose.”

IBB currently has a deal with US cloud computing company Salesforce.com, best known for its customer relationship management products – products that Islamic Bank of Britain found attractive when it began exploring cloud solutions in 2009. According to Gamil, the adoption of the cloud means that he is free to experiment with new ideas without spending millions of pounds up front. It also means the small Islamic bank is able to get more ‘bang’ for its buck.

“There’s no direct relationship between the number of applications I’ve implemented using Salesforce.com and the extra cost I’ve incurred,” he said. “We haven’t changed the annual subscription since 2011 – I still pay the same – yet I have almost trebled the applications I’m using on this platform.”

Islamic Bank of Britain originally turned to cloud computing for customer relationship management, encompassing tasks such as claims management. As the bank grew into the project, it began to realise that the same concept could be applied to sales management, including such tasks as opportunity and lead management. It then decided to move customer on-boarding for current accounts and savings into the cloud – a project that began in October 2011 and was completed in January 2012. Finally in July 2013, Islamic mortgage alternatives were added to the cloud (Islamic finance does not charge interest).  However, Gamil says he now wishes the bank had gone further and faster in moving products and services to the cloud.

“If I think back to 2004, if we had known about the potential of the cloud, I wouldn’t build servers and a data centre,” he said. “These are the parts of the business where we still suffer today. No, I’d be far more aggressive in moving things to the cloud. Right now, I’m thinking of reforming the telephony system we use – and I will likely choose a cloud solution, because it’s more reliable and it helps us to stay light on the ground.”

Cloud computing has existed in various forms for many years. But financial institutions and especially banks have historically been reluctant to embrace the cloud, in part due to fears over security. That has changed significantly within the last few years, as a combination of cost pressures and greater familiarisation with the technology has allowed cloud services to grow. Gamil notes that software as a service, platform as a service and infrastructure all have a role to play in making the bank’s operations more profitable.

“Last year, we doubled the book of our business liabilities and assets,” he said. “I don’t know how much of that is purely Salesforce.com and how much is products, but in four years we haven’t achieved that. In one year, we did it and in six months we doubled what we doubled. A good element of that is the platform.”

Another example of the value of the cloud to the bank is the creation of ‘super users’ with access to different parts of the business. The bank has four or five of these individuals, who use the technology to improve aspects of day to day operations. The bank’s weekly customer survey, for example, was moved from spreadsheets onto the Salesforce.com cloud platform. Internally, the platform also serves as the main collaboration tool between different departments in the bank.

Islamic Bank of Britain offers products that are designed to match Islamic Sharia principles. These principles forbid the charging of interest, as well as dealing in products related to vices such as alcohol, gambling, weapons sales and tobacco. In addition, trading activity should be based on a real underlying asset to avoid speculation and communal initiatives such as profit sharing are encouraged.

To meet these needs, the bank uses Misys core banking tools, which at the time of purchase didn’t have an Islamic module – although one was later added. As a result, the bank built its own Sharia products, effectively developing its own Islamic module. According to Gamil, the record keeping, systems and accounting needed by an Islamic bank are much the same as a conventional one. The difference lies more in the presence of Sharia as a guiding principle, which has an important bearing on the way the bank’s services are arranged. For example, the bank may be charging a client for a particular service at a rate that is in line with the industry in the UK, but the Sharia experts might point out that there is no direct correlation between the amount of admin work the bank has to do and the rate being charged – and therefore recommend the rate be reduced.

“Islamic banking’s main selling point may be serving the Muslim community, but don’t forget there’s an aspect of ethical banking as well,” said Gamil. “The advantage of Islamic banking is its purity – it’s very transparent, like a glass of water, and that has attracted a good number of customers that are not Muslims. You can see exactly how we are dealing with your money, and we want to be fair.

(Business Cloud News / 30 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Afghanistan: World Council Announces First Islamic Finance Manual for Credit Unions

In Afghanistan, Helmand Islamic Investment and Finance Cooperative's accountant (right) receives training on end-of-month adjustments from the IIFC Group head of Helmand province.

MADISON, Wis. - World Council of Credit Unions has published theIslamic Finance Manual: Operating Policies and Procedures for Credit Unions, the first known guide to establishing Shariah-compliant credit unions in the developing world. The Customer Owned Banking Association, World Council's member organization in Australia, developed the manual based on World Council's experience establishing Islamic investment and finance cooperatives in Afghanistan (2004-2012).

The comprehensive guide details operating policies and procedures based on international standards for financial cooperatives and adapted to comply with Islamic Law. The 305-page document addresses membership, shares and savings mobilization, Shariah-compliant financing and collection, provisions and allowances for bad debts, asset and liability management, capitalization and capital adequacy, accounting, cash operations, internal controls, human resources, procurement and information technology and security. Each chapter includes a comprehensive review of procedural requirements and who should be involved, including template forms and contracts.

"The Islamic Finance Manual produced with the initiative of the Customer Owned Banking Association of Australia is a product of years of dedication and cooperation among World Council staff and local Afghan leaders to adapt World Council's traditional credit union building model to an Islamic banking environment," said Brian Branch, World Council president and CEO. "The manual now provides a cornerstone for local credit union development in countries as diverse as Libya and Pakistan to Australia and the United States."

World Council's nine-year program in Afghanistan, through which the manual was developed, focused on establishing sustainable financial cooperatives as well as a national apex trade association. World Council consulted Islamic scholars and local religious leaders to modify its traditional credit union development methodology and establish the country's first fully Shariah-compliant financial institutions. Today, more than 30 IIFCs and points of service in 14 provinces across the country offer share savings and loan products that heed the Islamic prohibition on paying or receiving interest. Afghanistan's national financial cooperative association, the Islamic Investment and Finance Cooperative (IIFC) Group, was established in 2009 and became a World Council member in 2012. Afghan IIFCs comprise the world's youngest credit union movement and is the only one to claim full compliance with Islamic Law.

Islamic finance is a form of ethical financing, defined by the fair distribution of wealth, concern for the welfare of communities and economic stability. Islamic finance principles promote the protection of consumer rights and prevent investment in businesses that are considered "harmful," including gambling, armaments, alcohol and pornography. The creation of economies based on physical assets is at the heart of Islamic finance - a key reason why the Islamic financial sector was largely unaffected by the recent global financial crisis. Islamic financial markets operate in 37 Muslim countries, and many non-Muslim countries in Europe offer Islamic finance options.

(Zalora / 30 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Islamic banking in India

Around four decades ago, banking industry started to realize the benefits of ‘Fiqh- al Muamalat’ (transaction rules) of Shariah law. It began showing steady growth right from its inception at around 15% a year. Today Islamic investments & finance institutions make the largest growing sector in this industry, with staggering 25% growth every year, notwithstanding economic-meltdown of the US & other recessions in the world economy.

Islamic banking has been adopted by more than 50 countries, including the United States & Great Britain. And it is certainly not to cater to any vote-bank, since Muslims in these countries do not constitute any sizeable enough population to be considered for political appeasement. It is purely on the basis of the fact that Islamic banking offers a solution, a recession-proof future to these countries which live on credit. However, it bewilders me to see India, the third largest Muslim populated nation in the world, with almost 200 million Muslims in it, not even indulged in any serious debate about this new trend. The Reserve bank of India's governor, D. Subbarao, recently issued a statement, ''We got to see that Islamic Banking which does not allow charging interest or taking of interest is inconsistent with our existing laws. All that I am saying is Islamic banking is not consistent with current banking laws". The reason is quite evident. Even as per him, any Islamic banking institution has to be under the purview of Shariah regulations, calling for a Shariah court to act as the regulatory authority over it. Currently, all the banking & financial institutions in India have only RBI as their regulatory authority. 

So, to conclude, for Islamic banking to be possible in India, there have to be two regulatory agencies on the same institution, ‘RBI’ for banking regulation & ‘Shariah court’ as the regulator for Islamic banking. The Governor was very clear that it is the Government which has to decide if they want to allow Islamic banking or not. So, it is not what many of my dear economists in India opine, that Islamic banking is just not possible in India. The complete truth is that it can be made possible if government agrees to allow it. India is not a theocratic country that its laws are decreed by God. If the country benefits and its Muslim citizens religious obligation is served, why can not amendments to the current law be made, the way many Western and 'not-so-Islamic' countries have done? If some fascists oppose it on the basis of its affiliation with Islam, let them call it an 'Interest-free banking'.

‘All India Muslim Personal Board’, boasts of safeguarding the religious rights of Indian Muslims, on its website. Undeniably, it has achieved some commendable milestones. The irony is that it has exhausted all its efforts to resist 'Child marriage Restraint Act' to ensure legality of such marriages. Their argument is that since there is no age- bar set up by Islam on marriage, hence country cannot set it up for them, which makes sense to me. However, what about the Interest (Riba or usury), which is unambiguously forbidden in Islam, where as per one hadith, Allah & His prophet (SAW) declare a war against such a Muslim. Why is their ante so low on it? Comparatively, this issue deserves the most attention. Clearly, more than AIMPB's resistance to 'Right of children for free education act, 2009' and their rightful opposition to Salman Rushdie's video conference to Jaipur literature festival.

At the state-level, JK bank being the leading financial institution here and catering to the only Muslim majority state in India, must realize this moral responsibility of strongly pleading for this religious right of its Muslim customers, so that they have an option to choose from. They must not just issue press statements, but connect with all those who are interested, like the Govt of Kerala & AIMPB to form a pressure group, as Governments do not do anything unless its people convey their demands, 

effectively & efficiently. This step will not just win Muslim voters for the government, if they permit it, but non-Muslims as well, since this is not just to cater to the religious rights of minority but also a chance to bail out India from precarious economic situation.

(Mehboob Makhdoomi has an M.B.A from USA & a research degree from the U.K. His book, ‘Social Marketing & Conflict Resolution: An analysis of the Kashmir situation’, is set to be released this August in Kashmir.)

(Greater Kashmir / 30 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Malaysia: Takaful operators to use Islamic Financial Services Act (IFSA) grace period to ensure growth

PETALING JAYA: Takaful operators like Syarikat Takaful Malaysia Bhd and Takaful Ikhlas Sdn Bhd, a unit of MNRB Holdings Bhd, are aggressively strategising their operations to ensure profitable growth and taking advantage of the five-year time frame given to composite takaful players to fully comply with the new Islamic Financial Services Act (IFSA).

Under the Financial Services Act (FSA) and IFSA, which came into force on July 1, composite insurers and takaful players would be, among others, required to split their life and general insurance businesses under separate licences.

Takaful Malaysia group managing director Datuk Mohamed Hassan Kamil told StarBiz that as takaful operators are given the five-year time frame by Bank Negara to fully meet the terms of the new Act, the company would be devising and evaluating an array of potential options to achieve more efficient solutions from the capital management and shareholder return perspectives.

“We would review and evaluate all this. Hence, it is unlikely for the changes to materialise in the current financial year. The takaful industry players have yet to digest the full breadth of the IFSA to decide what would work best for them, going forward, especially towards sustainable growth of the takaful markets. This would definitely take time, as financial institutions need to better understand the application of the IFSA,” he added.

On whether the Act would take a hit on Takaful Malaysia’s bottomline in view of the split in operations of its family (life) and general businesses, Hassan said although there would be potentially higher cost initially due to start-up costs, in the long run, it would benefit the company and consumers as a whole, as the company would be more focused in terms of strategic planning, management, cost control and enhanced customer service. The capital position too would be further strengthened, he noted.

RHB Research, in an earlier report, said that the new ruling to split the life and general insurance businesses could have a “huge impact” on insurance firms, especially takaful players like Syarikat Takaful Malaysia and Takaful Ikhlas.

It added that the impact would be felt more deeply in the takaful industry due to the higher number of composite licences issued to them compared with their conventional insurance counterparts.

Meanwhile, Takaful Ikhlas president and chief executive officer Abdul Latiff Abu Bakar said while the split timeline given to comply was within five years, the company was looking more towards compliance with the other requirements first, of which the deadline for compliance was within a year.

“We are currently at the gap/impact analysis stage. As far as business is concerned, Takaful Ikhlas would continue to focus on enhancing its family agency business, of which new investment link products were just recently launched. It is too premature to comment on the capital and profitability.

(The Star Online / 23 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

UAE: New OBG report on Islamic finance in Abu Dhabi

The growing role Islamic finance is playing in the expansion of Abu Dhabi’s banking sector will be mapped out in a forthcoming report to be published by Oxford Business Group (OBG).

The Report: Abu Dhabi 2014 will look in detail at the new tools and measures which are becoming available on the back of rising demand for Sharia-compliant financial services.

It will also consider the contribution that major government projects are expected to make in galvanising growth across the emirate’s banking industry.

OBG, a global publishing, research and consultancy firm, has signed a memorandum of understanding (MoU) for the seventh year to collaborate with the Abu Dhabi Islamic Bank (ADIB) for its forthcoming report on the emirate.

Under the agreement, OBG will have access to the bank’s expertise and research resources which will be used to help compile the group’s coverage of Islamic financial services in the report.

OBG’s regional editor Oliver Cornock said trends noted for 2012, which included increases in liquidity and larger profits from Islamic finance, showed that while lending remained somewhat sluggish, Abu Dhabi’s banks were heading towards recovery from the financial crisis five years earlier.

“Abu Dhabi’s bid to target non-hydrocarbon segments of its economy for growth, including financial services, is gathering pace, while the setting up of public-private partnerships should provide plenty of opportunities for banks to facilitate the rolling out of new projects,” he said.

The report will be a vital guide to the many facets of the emirate, including its macroeconomics, infrastructure, banking and other sectoral developments. It will be available in print or online in the first quarter of 2014, he added.

(Trade Arabia / 30 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Sanusi: Islamic Finance, Key to Nigeria's Infrastructural Development

The Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has stated that the Islamic Banking System, which was introduced to Nigeria, is vital to the country's infrastructural development.

Sanusi, who was represented by his Personal Assistant on Islamic Banking, Dr. Bashir Aliyu Umar, stated this in Abuja during the international conference on Islamic Finance organised by The Metropolitan Skills Limited, Abuja, with endorsement by CBN and related agencies.

He said the Islamic Finance asset-backed and asset-based financing instruments to fund infrastructural needs would go a long way in promoting financial inclusion, enhancing the productive capacity of the nation and by extension, contribute to its economic development.

The CBN Governor also noted that the theme of the conference ‘Infrastructure Development through Alternative Funding(Islamic Finance) in Africa’, was appropriate and timely because of the current low level of infrastructural development experienced in most African countries as well as dwindling sources of finance especially in the aftermath of the global financial crises.

He also revealed that a good approach to funding of infrastructure in Africa is through the Public-Private Partnership (PPP) explaining that the current administration in Nigeria has already embraced the method.

Sanusi said: “There is no gainsaying that the financial resource required to fund infrastructural development is huge, and government and the banking system might not be able to provide the needed funding alone; considering the gestation of the projects as well as the risk of crowding out the private sector.

“A very good approach to funding of infrastructure in Africa is through the PPP, which the current administration in Nigeria has already embraced. This provides a window under Islamic finance asset-backed and asset-based financing instruments to fund infrastructural needs, which will go a long way in promoting financial inclusion”, he added.

Also, MSC Coordinator Islamic Finance, Faculty of Islamic Studies, Qatar, Prof. Monzer Kahf, who was one of the guest speakers, described Islamic Finance as a depository institution of financial intermediary specialised in providing finance on sale, lease or sharing bases which is committed to the Islamic Shari'ah criteria of financial transactions especially realism, morality as well as prohibition of interest.

Kahf condemned the way the Islamic Banking is being misinterpreted in some quarters, adding that the bank does not put any restrictions on one’s faith or belief, but rather grants an equal opportunity that operates under the principles of fairness, realism and morality.

Earlier, the Chief Executive Officer, Metropolitan Skills Ltd, Ms Ummahani Ahmad Amin, said the subject of Islamic Finance has gained further prominence following the global financial crises and sovereign debt crises, which highlighted a range of fallacies. In the conventional financial systems and underscored the usefulness of Islamic principles for stability and sustainability.

“Islamic economics us becoming more relevant for socio-economic development of countries, regions and the world, which is facing high unemployment, unsustainable growth and above all ethical crises”, Amin added.

(This Day Live / 24 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

India: Islamic finance to power Kerala startups

Cheraman Financial Services Ltd, jointly promoted by the Kerala government and non-resident Keralites, is to fund hundreds of cash-strapped student startups coming up in the state.

The financial institution functioning on Islamic principles has set aside Rs150mn for companies in the Startup Village, Kerala’s answer to Silicon Valley, from its Rs2.5bn Alternative Investment Fund that primarily targets the Shariah-compliant service and manufacturing sectors.

There are more than 900 firms – and the number is growing fast - with innovative products started by students waiting to set up their units at India’s first telecom incubator mentored by Infosys co-founder Kris Gopalakrishnan.

“The decision to fund these projects was taken at the recent meeting of our board of directors,” P K Kunhalikutty, state industries minister who is also a director of the company - which recently received Reserve Bank of India (RBI) approval  - said while addressing the Weekend@Startup Village programme here yesterday.

Cheraman, which has also got clearance from the Securities and Exchange Board of India, focuses on new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering.

At least one company of students with innovative ideas is being set up each day at the Startup Village. The Village aims to host 3,000 startups by 2020.

Coming up on the same campus in this port city is the Kerala Technology Innovation Centre, another zone exclusively for bio-technology.

“A new silent revolution is happening in Kerala. Educational institutions are mushrooming and so is a new breed of young and enterprising entrepreneurs,” said the minister who spent a day with youngsters at the Startup Village.

“For these young entrepreneurs, money will not at all be a constraint”.

Chief Minister Oommen Chandy, who delivered his speech via Skype said his government was extending all help to the Startup Village to create a ‘Silicon Valley’ here.

Chandy also announced a funding scheme to regularly send student entrepreneurs to Silicon Valley to gain firsthand experience.

Startup Village chairman Sanjay Vijayakumar said the chief minister used to meet him and his team for 30 to 45 minutes each week to make the project a reality.

Anil Menon, who heads the second global headquarters of Cisco, based in Bangalore, said the world leader in networking has decided to set up a Cisco Lab at the Startup Village to tap its potential. The Lab will start “soon” he added.

Kris Gopalakrishnan disclosed that the 180 startup firms located at Technopark in the state capital Thiruvananthapuram was generating Rs2bn a year and has created 4,500 jobs. The new breed of young entrepreneurs straight from the campuses is making all the difference in Kerala, he added.

“Creating a community of entrepreneurs is much more difficult than building a company. This is going to be a fantastic success, something that’s going to change Kerala,” insisted Gopalakrishnan.

(Gulf Times / 28 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

"Zakat Inspired" Ensures That All Funds Are Distributed in Accordance with the Tradition of the Prophet Muhammad

Passaic, NJ -- (SBWIRE) -- 07/26/2013 -- One thing for which Islam is highly respected is its willingness to help the lower class of the society with much essential and basic necessities of life. The religion has always been on the path shown by the Prophet Muhammad. In such a similar way, Zakat charity is a project that has been started to make the dreams of the prophet come true. The portal asks all individuals and institutions from local as well as national community to add-on to zakat collection. The portal then makes sure that all the funds collected here in this portal are distributed in the local New Jersey area as well as nationwide so that many people get benefited by them. Also, people can do direct payment to Zakat charity.

The Zakat charity also has made many measures and policies to ensure that all the funds collected are distributed with the traditional Islamic laws. All the policies of the portal are reviewed properly by the well appointed independent body of scholars called as Zakat Executive Council. The policies laid down by the portal are even approved by many local and countrywide scholars.

About Zakat Inspired

Zakatinspired.org is a wonderful organization which help all the people who are in need and it try to fulfill all the basic facilities of life like money, clothes, food, etc. Zakat Inspired enforces very tight monetary controls and also adds a lot of transparency along with responsibility in all its dealings in all levels. The policy related to the charity is approved by many scholars and has measures for internal as well as external audits with several checks to make sure that zakat pay zakat funds are not misused. It has been done without any material benefit but their aim to help the needy, for the sake of “Allah The Most High”.

(SB-Wire / 26 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

All About Zakat Al-Fitr

1. Who Should Pay Zakat Al-Fitr?

Zakat Al-Fitr is incumbent on every free Muslim who possesses one Sa` (2.176 kilograms or 4.797 pounds) of dates or barley over and above his basic needs of food for himself and his family/dependants for the duration of one day and night. Every free Muslim must pay Zakat Al-Fitr for himself, his wife, children, and servants.

Ibn `Umar, may Allah be pleased with them both, said,

"The Prophet, peace and blessings be upon him, enjoined the payment of one Sa` of dates or one Sa` of barley as Zakat Al-Fitr on every Muslim, young and old, male and female, free and slave." (Al-Bukhari and Muslim) 

2. Significance of Zakat Al-Fitr

 Zakat Al-Fitr was declared by the Prophet (peace and blessings be upon him) as a requisite for one's fast to be accepted. It is meant to cement the relationship between the members of the Muslim society, to alleviate the pains of the poor, to cultivate the sense of brotherhood and solidarity in the hearts of the Muslims, etc.

Various reasons are given by scholars for this obligatory charity. Some say that this charity helps the poor and needy, and takes care of their needs in the month of Ramadan and also makes it possible for them to celebrate the `Eid festival with other Muslims. Other scholars maintain that this charity is meant to expiate (Kaffarah) for any mistakes or wrongdoings a person may have done during this blessed month. Ibn `Abbas said,

"The Prophet (peace and blessings be upon him) enjoined Zakat Al-Fitr so that those who fast are purified of their sins and the poor and needy are fed. Therefore, whoever gives it before the `Eid prayer, it will be counted for him as an acceptable Zakah (of al-Fitr), but if someone delays and gives it afterwards, his charity will be an ordinary one." (Abu Dawud and Ibn Majah) 

3. Time of Zakat Al-Fitr

This charity should be given during the month of Ramadan, anytime before the `Eid-ul-Fitr prayer. Because it can be given anytime until the time of `Eid-ul-Fitr, it is called Zakat Al-Fitr. The Prophet  (peace and blessings be upon him) urged Muslims to pay this charity in the month of Ramadan. 

4. The amount of Zakat Al-Fitr

The amount of Zakat-ul-Fitr was fixed by the Prophet (peace and blessings be upon him). It is about 5 pounds of wheat, flour, barley, dates or raisins. Some jurists also allow paying cash to the poor and needy. The head of the household must pay this amount on behalf of all the members of the household or his dependants; males or females, adults or children. 

5. The recipients of Zakat Al-Fitr

This Sadaqah should be given to the poor and needy. Individuals can also make the payments to Islamic charitable organizations that collect this fund. These organizations then should distribute these funds as soon as possible so that they reach the needy people on time. 

6. The place in which Zakat Al-Fitr is paid

It is better to pay Zakat Al-Fitr in the place one lives and fasts. However, if someone fasts in a country other than his home town, he should pay Zakat Al-Fitr therein, this is the position of the Hanbalis and Shafi`is, because Zakat Al-Fitr relates to where one is resident (during the fast).

As for sending Zakah from one country to another, it is permissible if there is a strong enough reason: The country where he lives is in no need of Zakah; another country is in dire need because of starvation, calamity, or war; or the payer has some relatives in another country who need his help. These reasons permit the Muslims to send their Zakah to the poor Muslims who are resisting aggressors or suffering from starvation and calamities, as in Palestine, Afghanistan, Kashmir, Bangladesh, Burma, etc. 

7. Should the Muslim pay Zakat Al-Fitr for his non-Muslim wife?

It is very important to note that a Muslim husband does not need to pay Zakat Al-Fitron behalf of his non-Muslim wife, according to the majority of Muslim scholars. On the other hand, Abu Hanifah and his followers see that a man in this case is obliged to pay Zakat Al-Fitr on behalf of his non-Muslim wife.

Sheikh `Atiyyah Saqr, former head of Al-Azhar Fatwa Committee, stated the following:

“Zakat Al-Fitr is to be paid by the head of the household for himself and for those he is obliged to maintain, i.e., his family members including his wife. Although all Muslim scholars agree that a man is obliged to sustain his non-Muslim wife, they differ concerning paying Zakat Al-Fitr for her.

The majority of scholars, including Malik, Ash-Shafi`i and Ahmad, maintain that a man is not obliged to pay Zakat Al-Fitr for his non-Muslim wife, as she herself is not required to pay it because she is outside the boundaries of Islam. They base their opinion on the view that implies that a non-Muslim is not charged to perform the rules of Shari`ah. It is, moreover, reported that the Prophet (peace and blessings be upon him) prescribed Zakat Al-Fitr on all Muslims, free and enslaved; male and female; young and old. Also, Zakat Al-Fitr is considered a way to purify the fasting person from lewdness and abuse, as reported by Abu Dawud with a sound chain of transmitters, on the authority of Ibn `Abbas (may Allah be pleased with them both). Hence, it is meaningless to demand non-Muslims to pay Zakat Al-Fitr, as they are not required to observe fast, like the Muslims.

The fore mentioned hadith restricts prescribing Zakat Al-Fitr to Muslims. In thehadith, the word ‘Muslims’ refers to the persons on whose behalf Zakah is paid, not the person who pays it. Therefore, it is not necessary for a man to pay Zakat Al-Fitron behalf of his non-Muslim slave, even though he is obliged to maintain him. The same ruling applies to a non-Muslim wife. (Ibn Qudamah; Al-Mughni; vol. 2, pp. 646-647)

 Abu Hanifah and other scholars maintain that a Muslim has to pay Zakat Al-Fitr on behalf of his young son who apostatizes from Islam, because one is not accountable for apostasy unless he fulfills the conditions of legal accountability that include adulthood. They also opine that a man should pay Zakat Al-Fitr on behalf of his Christian or Jewish slave. They base their view on the fact that a father is obliged to maintain his young son, and a master his slave. They cite a hadith from the Prophet (peace and blessings be upon him) in which he said, “Pay half a Sa` of barley (one Sa` = 2.176 kilograms or 4.797 pounds) on behalf of everyone, free or slave; young or old; Jew, Christian or pagan.” However, the majority of scholars have refuted this hadith, saying that it is not reported in the well-known books of Hadith.

Some argue that Zakat Al-Fitr purifies the fasting person from any lewdness or abuse he committed while fasting, and is, thus, not paid on behalf of non-Muslim family members due to the fact that they do not fast. However, it is paid in favor of the needy on behalf of those who are excused from fasting. Hence, a non-Muslim wife or slave is in the same position as the excused.

This claim is also refuted by the fact that if a Muslim does not observe fasting in Ramadan without a valid excuse, he will be charged with two things; to make up for the fast and to pay Zakahul-Fitr. Neither of the two replaces the other.”

8. Paying the monetary value of Zakat Al-Fitr 

on the legitimacy of paying Zakat Al-Fitr in cash, Sheikh Yusuf Al-Qaradwi said,

“First: Imam Abu Hanifah and his companions, Al-Hasan Al-Basri, Sufyan Ath-Thawri, Caliph `Umar ibn `Abd Al-`Aziz, and many other scholars permitted paying the value of Zakah, including Zakat Al-Fitr, as money. Both supporters and opponents of the opinion depended on many pieces of evidence and points of views. I have detailed this matter in my book Fiqh Az-Zakah, in a chapter on paying the monetary value when giving Zakah.

Sheikh Ibn Taymiyah reached an opinion that is considered a compromise between these two parties, "Paying the value of Zakah in money when there is no need or interest in doing so, is impermissible… As for paying the value of Zakah as money because of a need or interest, it is permissible. For example, if a Muslim sells the fruits or the crops of his land for some dirhams, he can pay the tenth of these dirhams and he should not be asked to buy fruits or plants... Also, if he has five camels he is obliged to give a sheep as Zakah, but if he does not find a sheep to buy, he can pay the value in cash and he is not asked to travel to another city to buy a sheep. In addition, if those who deserve Zakah ask him to pay it as money because of some need, he can do so. It was narrated that Mu`adh Ibn Jabal (may Allah be pleased with him) said to the people of Yemen, "You can bring me khamis and labis(local textiles) instead of the actual plants and fruit, for this will make matters easy for you and will be more useful to the poor Muhajirun (immigrants) and Ansar (helpers) in Madinah." It was narrated that he said these words concerning Zakah, and it was said they were concerning Jizyah." (Majmu` Fatawa Ibn Taymiyah, 25/82-83, Saudi edition)

The essence of disagreement is between two schools: One school considers the total objectives of Shari`ah without neglecting the specific texts, and another school considers only the specific texts.

The opinion that it is permissible to pay the value of Zakat Al-Fitr as money was in effect during the age of the Tabi`in (the generation following the Companions) and was supported by many scholars and one of the caliphs. Ibn Abi Shaybah narrated on the authority of `Awn, "I heard the letter of `Umar ibn `Abdul-`Aziz being read to `Adiyy, the ruler, 'The people of the divan should take from every Muslim half a dirham.'" The same reported that Al-Hasan said, "There is no harm in paying the value of Zakat Al-Fitr in dirhams," that Abu Ishaq said, " I saw them paying the value ofZakat Al-Fitr in dirhams", and that `Ata' narrated, "I used to give the value of Zakat Al-Fitr in silver dirhams. (Musannaf, 4/37-38) "

Actually, there is much evidence that supports this opinion:

1. The Prophet (peace and blessing be upon him) said, "Enrich them (the poor) on this day." Enriching is achieved through food and also its value, which may even be better than food, as the poor person who has plenty of food may be forced to sell some of it; whereas if the monetary value is given it will enable him to buy whatever he wants of food, clothes, etc.
2. Ibn Al-Mundhir narrated that the Companions (may Allah be pleased with them) permitted giving half a Sa` of wheat, as they believed that it equaled the value of a Sa` of dates or barley. Thus, Mu`awiyyah (may Allah be pleased with him) said, "I see that two mudds (a mudd equals a handful of an average-sized man) of the Levantine wheat equal a Sa` of dates."
3. This opinion is easier for the Muslims in this age, especially for those who live in the industrialized countries where people deal only with money, and it brings great benefit in most cases for the poor in many cities.

Second, when the Prophet (peace and blessings be upon him) asked Muslims to giveZakat Al-Fitr from the common foodstuffs, he wanted to make matters easy for them; silver and gold money were rare means of dealings among the Arabs and the majority of people did not own but a few coins. Moreover, the poor were in dire need of the common foodstuffs, such as wheat, dates, raisins, and cheese. Thus, giving Zakat Al-Fitr from the staple food was easy for the payer and beneficial for the recipient. Also, he (peace and blessings be upon him) permitted the owners of camels and sheep to give cheese as Zakat Al-Fitr in order to facilitate matters for them.

Furthermore, the purchasing power of money varies from one time to another and from one country to another. Thus, estimating the amount of Zakat Al-Fitrby a fixed amount of money would make it fluctuate and be unstable. That is why the Prophet (peace and blessings be upon him) fixed it by an amount that does not vary or fluctuate. This amount is the Sa`, which is usually considered as sufficient food for one family for a day.

Third, our scholars agreed that fatwas change according to the time, place, and condition of the people involved. The one who impartially examines the current status will realize that giving food as Zakat Al-Fitr is only suitable for simple societies in which the poor need grains and the payer finds such grains easily. In the large and complex societies that have a high population density and where grains are rare and the poor do not need them, as they no longer grind, knead, and bake their food, the impartial will agree that paying the value of Zakat Al-Fitr as money is more suitable.

Imam Ibn Taymiyah did well when he permitted the Muslim who had sold the fruits of his land for some dirhams to pay the tenth of these dirhams and not to be asked to buy fruits to just to give them to the poor. Also, he permitted the owner of the camels who was obliged to give a sheep as Zakah to pay the value in money and did not ask him to travel to another city to buy a sheep. This is true fiqh (understanding of Shari`ah). Then how can we ask a Muslim in a city like Cairo, where more than 10 million Muslims live, to give grain that has become rare and is of no need to the poor as Zakat Al-Fitr?

There is a big difference between the one who has a stock of food and refrains from giving the poor and the one like a city dweller who has nothing but money and is just to the poor. Zakat Al-Fitr was made obligatory in order to help the poor and make them not need to go from one place to another seeking food on the day of `Eid while the rich enjoy their wealth with their children. One should ask oneself, "Would he make a poor person not need to go to the market if he gives him a Sa` of dates or barley in a city like Cairo, for example?" Of course not, as the poor will surely go to market to sell them to obtain money to buy suitable food for their families! Thus, some of the Muslim scholars took into consideration the objectives involved and permitted giving Zakat Al-Fitr from the common foodstuffs of the country; this food is not even listed in the Shari`ah.”

(On Islam / 25 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Dubai launches Center for Islamic Banking and Finance

Sheikh Hamdan Bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Chairman of Dubai Executive Council and President of the Hamdan Bin Mohammed e-University (HBMeU), has launched the Dubai Center for Islamic Banking and Finance as a new step in support of the efforts towards establishing Dubai as the world’s capital for Islamic economy.

The centre is a collaboration between the Hamdan Bin Mohammed e-University and the emirate’s initiative: ‘Dubai: Capital of Islamic Economy’.

“The launch of the Dubai Center For Islamic Banking and Finance is a significant boost to the Islamic economy sector in the UAE, and a major step forward in the economic development agenda of Dubai, in line with the vision of Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, for transforming Dubai into the capital of Islamic economy,” said Sheikh Hamdan.

The announcement made on WAM news agency follows the unveiling of a plan in January by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, for the emirate to become the “global capital” of the Islamic economy.

According to Sheikh Hamdan, the new centre is expected to help cooperation between different sectors in the UAE based on investing in the best international expertise and experiences of Islamic economy, in order to benefit this sector, in general, and to consolidate the global economic stature of Dubai, in particular.

The new centre will provide support to the initiative through three academic programs on human resources development, scientific research and community service.

In the area of Human Capital Development, the Centre offers programs and courses to all learners along the Center’s lifelong learning model based on Masters programme in Banking and Finance which is accredited by the UAE Ministry of Higher Education and Scientific Research.

On the research front, The Centre conducts and facilitates research to advance the professional and theoretical foundation for Islamic Banking and Finance.

The Center will also play a vital role in widening access to Islamic banking and finance education to the wider community. The Center offers several major services including short term courses in both English and Arabic provided on a special track within HBMeU Cloud Campus, seminars and webinars for professionals, businesses, and educational institutions, as well as consulting on Islamic.

Islamic Banking and Finance – Market and Potential

Islamic finance is a financial system that operates according to Islamic law (called sharia) and is, therefore, sharia-compliant.

According to a report by KFH Research, Islamic banking will continue to grow in the GCC region during 2013, as it enters new markets worldwide, driven by growth factors and increasing demand. Islamic banking assets are expected to reach USD 1.5 trillion by end of this year with an accumulative growth rate of up to 20%.

Islamic banking represents the largest market share (80.3%) in the Islamic finance total assets. According to KFH Research, Iran’s Islamic banking assets contributed 42.7% of the total global Islamic banking assets in 2012, followed by GCC (34.1%) and Malaysia (10.0%).

Although Islamic banking industry currently constitutes a meagre 1% of the global banking assets, Islamic banking is the fastest growing segment in the international financial system.

(Arabian Gazette / 27 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Zakat brings happiness to poor

LUCKNOW: Though Fatima got admission to an engineering college, she had almost lost hope of completing her higher studies due to financial constraints. Her father, a clerk, asked her to discontinue studies as it was hard for him to support his six children . Help came to Fatima's way through 'zakat' (charity). Now, Fatima is close to fulfilling her dreams of becoming an engineer. 

Like Fatima, the holy month of Ramadan gives many poor and needy a reason to cheer as it is the time of the year when the faithful make generous donations, mostly in the form of the ritual charity. Zakat has been derived from an Arabic word which means 'to purify' . It is one of the five pillars of Islam. 

"In Islam, it is compulsory for every Muslim to give zakat comprising 2.5% of their wealth. If an individual's wealth including cash and kind is equal to 52 tolas (10gm) of silver over a period of one year, he or she has to pay zakat . Specifically paid during Ramadan, it benefits and helps poor and needy achieve their goals," said Imam-e-Eidgah Maulana Khalid Rasheed Farangi Mahali. 

He added that as compared to last year, the price of silver has fallen drastically, hence, this year a large number of people will come under the ambit of zakat. Last year, 52 tolas of silver cost around Rs 55,000 but this year, it has come down to nearly Rs 26,700. "While calculating zakat, some people do not include their jewellery, business property and savings. If Muslims start giving zakat properly, it will eradicate poverty from our country," he said.People indulge in this obligatory charity in various forms. Paying zakat directly to the poor is the best way. While most of them make a donation to madrassas , religious NGOs and social organisations, others give clothes and gifts to orphanages and old-age homes. Many sponsor a child's education or girl's marriage or give charity to those seeking medical aid. 

Naba Khan, a private executive said, "When we observe roza, we become sensitive to the sufferings of the hungry. Through zakat, we help them become independent.

(The Times Of India / 23 July 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com