Basel III in Islamic Finance Industry

Centre for Islamic Business and Finance Research (CIBFR) of The University of Nottingham Malaysia Campus, hosted an Industry Forum recently to discuss the major theme within the Islamic finance industry. The industry forum has prolific line of speakers with the likes of Dr. Zamir Iqbal, Head, World Bank Global Centre for Islamic Finance, Zahid Rehman, Assistant Secretary General, Islamic Financial Services Board (IFSB)) among others.

There were two major themes of the forum, the first session focused on the risk management in Islamic financial institutions (IFIs) and BASEL III capital regulation for Islamic banks. Addressing the audience, Dr. Zamir Iqbal highlighted that asset quality is important for Islamic Banks and accredited that Asian Islamic bank loan portfolio is rather poor, compared to conventional counterparts. Sharing the same sentiment, Zahid acknowledged that IFSB is working closely with Islamic banks to develop and implement capital adequacy framework and stress testing mechanism for IFIs.

In an another session, a panel discussion which was moderated by CIBFR Director, Dr. Nafis Alam, with panelists, Dr. Humayun Dar, CEO Edbiz Consulting, UK, Faizal Karbani, CEO Simply Shariah, UK and Dr. Wan Nursofiza Wan Azmi, Director Strategy of Asian Institute of Finance deliberated on the future of Islamic finance and the way forward for the Islamic finance industry. The panelists conversed on ways to bridge the gap of demand and supply in Islamic financial system. Dr. Nursofiza suggested this can be achieved by investing in developing human capital of the industry. Panelists also identified the lack of awareness as the major challenge for the Islamic finance industry. Among many, the distinguished panelists recommended “coming out of the Islamic hype’’ phenomenon to generate value for the Muslims as well as non-Muslims. The forum was well attended by the representatives of Islamic financial institutions such as Hong Leong Islamic Bank, IFSBs, industry practitioners and leading academic institutions.

Earlier in the day, CIBFR hosted its first Industrial Advisory Board meeting which was attended by the senior management of The University of Nottingham Malaysia Campus and CIBFR advisory board members which consists of Raja Teh Maimunah, CEO of Hong Leong Islamic Bank, Datuk Azahari Kamil, CEO, Asian Finance Bank, Rafe Haneef, CEO, HSBC Amanah Malaysia, Dr Zamir Iqbal, Director, World Bank Global Centre for Islamic Finance, Dr. Humayon Dar, CEO, Edbiz Corporation, UK and Faizal Karbani, CEO, Simply Sharia, London.

Much discussion ensued on the future of the CIBFR and developing the CIBFR as one of the major players in thought leadership in the Islamic finance industry. It was highlighted that in the first six months of CIBFR’s inception, the achievements are plentiful which was well appreciated by the advisory board members. Members of the advisory board have commended for industry-driven research on Islamic banking and finance that will establish Malaysia’s role in Islamic finance to western world.

CIBFR was established in 2014 as a specialised research institute to conduct quality research in the area of Islamic business and finance. Dr Nafis Alam, also Associate Professor of Finance of Nottingham University Business School Malaysia Campus, has been instrumental in establishing the Centre in order to focus on ‘interdisciplinary research’ connecting Islamic banking and finance with entrepreneurship, wealth management, and social development. Dr. Nafis can be reached at nafis.alam@nottingham.edu.edu.my.

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Notes to editors: The University of Nottingham  has 4 3,000 students and is ‘the nearest Britain has to a truly global university,with campuses in China and Malaysia modelled on a headquarters that is among the most attractive in Britain’ (Times Good University Guide 2014).It is also the most popular university in the UK among graduate employers,in the top 10 for student experience  according to the Times Higher Education and winner of ‘Research Project of the Year’ at THE  Awards 2014. It is ranked in the world’s top one per cent of universities by the QS World University Rankings.

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