The Chronicle of BBA Continues… (Bank Islam Malaysia Bhd v Azhar Bin Osman and Ors)

High Court says BBA rebates ‘must be granted’
by Habhajan Singh Available at:

Islamic banks ‘must grant’ a rebate even if the Bai Bithaman Ajil (BBA) contract is silent on the issue when a default occurs, ruled a recent High Court judgment. The judgment, in four BBA cases heard together by High Court Judge Datuk Rohana Yusuf, brings to the fore an issue that has been a bone of contention for consumers making avail of Islamic home financing as Islamic banks deem rebate, or ibrar as it is known in Arabic, as discretionary. Consumers, on the other hand, would want more certainty in that matter.

“In doing so, the bank should not be allowed to enrich itself with an amount which is not due while at the same time taking cognisance of the customer’s right to redeem his property. “Therefore where the BBA contract is silent on issue of rebate or the quantum of rebate, by implied term I hold that the bank must grant a rebate and such rebate shall be the amount of unearned profit as practiced by Islamic banks,” she wrote in a 29-page judgment dated Jan 28 in Bank Islam Malaysia Bhd v Azhar Bin Osman, and three other cases. She also noted that legal documentations used by Islamic banks in financing should specify a formula for rebate, which at the moment is loosely attached to the principle loan agreement and whose implementation is very much left to bank’s discretion.

In the judgment, Rohana touched on the issues of ibrar and the quantum that banks can claim in an event of a default, two areas that have seen some debate and discussion from the Shariah perspective. “If the documents of the banks had in fact specified a formula of rebate or ibrar, it will demystify the intricacies of a BBA transaction. It will be easily understood by the customer who would then not be put in the dark as to what is ibrar and what would be the amount of ibrar he should be receiving,” she said.

The judgment seems to suggest that Rohana has taken a different tack from a recent Court of Appeal decision on a bundle of BBA contract cases which originated from the much publicised April 2008 decision by High Court Judge Datuk Abdul Wahab Patail, while maintaining that she is still within the bounds of what constitutes a binding decision from the higher courts.

“This is quite a departure form some of her earlier judgments,” said lawyer Mohamad Illiayas Seyed Ibrahim who has dealt extensively in Islamic finance cases. Ibrar, one of the two issues at the heart of this judgment, means surrendering one’s right of claim over debt either partially or in full, according to the definition from a published document by Bank Negara Malaysia (BNM) which regulates Islamic finance outfits.

Ibrar had been a bone of contention with consumers as banks generally do not give them a specific guarantee that they are entitled to a rebate should their loan end prematurely, either due to early payment or a default. The path pursued by Rohana, in this judgment, seems to push local Islamic banks to insert the ibrar clause explicitly into their financing documents, thus bringing about certainty to the issue of rebate and also streamlining the practice with what is already approved by BNM’s Shariah Advisory Council (SAC). Rohana ruled that “when an Islamic bank practices granting of rebate on a premature termination, it creates an implied term and legitimate expectation on the part of the customer. Accordingly it is only proper that such expectation and practice be read into the contract.”

The central bank’s SAC — which has the last say on matters pertaining to Shariah in Islamic finance as further reinforced in newly promulgated central bank regulations — had resolved in 2002 that ‘Islamic banking institution may incorporate the clause on undertaking to provide ibra’ to customers who make early settlement in the Islamic financing agreement on the basis of public interest (maslahah)’. The four cases in this judgement came from two sets of appeal before the Court of Appeal relating to BBA contracts in Islamic banking. The plaintiff in all the four cases was Bank Islam Malaysia Bhd (BIMB) who were represented by Oommen Koshy from Skrine & Co and Aedyla Bokari from Nassir Hafiz Nazri & Rahim.

In the first set involving 12 cases heard together, the Court of Appeal had decided on Aug 26, 2009 [Bank Islam Malaysia Berhad v Lim Kok Hoe & Anor and Other Appeals] that a BBA contract is valid and enforceable, thus reversing an earlier decision of the High Court in Arab-Malaysian Finance Bhd v Taman Ihsan Jaya Sdn Bhd & Ors. The Taman Ihsan Jaya case made headlines when Abdul Wahab had ruled that the widely used BBA contracts were contrary to Malaysia’s Islamic banking regulations. The Malaysian Reserve first broke that story on Sept 8, 2008.

For full judgement, click here:
Page 1-3
Page 4-6
Page 7-9
Page 10-12
Page 13-15
Page 16-18
Page 19-21
Page 22-24
Page 25-27
Page 28-29

Note (s): Thanks to my colleague, Mr. Aedyla Bokari of Messrs Nassir Hafiz Nazri & Rahim for copy of the judgement. For further reading, you may refer to my articles below:-
Shari’ah and Legal Issues in Al-Bay’ Bithaman Ajil in the Case of Arab-Malaysian Finance Bhd V Taman Ihsan Jaya Sdn Bhd & Ors [2008] 5 MLJ
Questions and Answers on the BBA Financing Facilities in Malaysia

Best Regards

  • With Professor Mausudul Alam Choudhury, Professor Rodney Shakespeare and Professor Nur Alam Siddiqi in Jakarta, Indonesia


    EU woes laughable: Tun Musa Hitam, head of the World Islamic Economic Forum

    EU woes laughable: Islamic finance chief
    Available at:

    BRUSSELS: Muslim nations are “laughing” at European efforts to grapple with a debilitating debt crisis in Greece, which has serious ramifications for the world’s biggest open market, the head of the World Islamic Economic Forum has said.

    Former Malaysian deputy prime minister Tun Musa Hitam spoke to AFP in Brussels as European Union plans for a backstop bailout enabling Athens to refinance tens of billions of euros of debt repayments and budget commitments were being thrashed out among eurozone officials.

    “Seen from the east, from developing countries, we’re laughing because they’re not doing what they taught us,” Tun Musa said of the EU’s decision to protect Greece rather than sending Athens to the International Monetary Fund. “You find that a European nation has adopted anything but good practice, which has resulted in a disaster (and) now the name and the prestige of the European Union is at stake, but more importantly, its economies,” he added. “The normal way of resolving these issues is to go to the IMF. Developing countries do that, but not the EU. “It’s yes, no, maybe every day,” he said.

    Tun Musa was speaking before eurozone finance ministers agreed last Sunday to pump some 30 billion euros (41 billion dollars) into Greece’s coffers this year if necessary — at below-market rates of around five per cent interest. But in the aftermath of the accord doubts have emerged as to the readiness and scale of the financial aid, with a series of political hurdles still to be crossed before these monies can ever be handed over. And within no time, new nationwide strikes had pushed Greek borrowing rates back through the pain barrier.

    With parallel EU negotiations with the IMF under way on its involvement, and 15 billion euros of loans anticipated in 2010 from Washington, Tun Musa maintained that the Western system where “anything goes in terms of lending and conduct” lay behind the Greek fiscal disaster. The missing ingredients of “responsibility, transparency and accountability,” glaringly absent throughout fraudulent Greek reporting to the EU, were instead to be found in Islamic finance, he argued. “The methodology of Islamic banking will become more acceptable, even without being in Islam,” he said.

    He cited a surge in the numbers of specialist economic religious ulama, who re-interpret Sharia law for expansion throughout non-Islamic territories. Sharia prohibits interest on money and re-distributes added value based on goods not paper.

    Ironically, Moody’s Investors Service said earlier this month that the Islamic finance industry had a market potential of at least 5.0 trillion dollars — more than five times its actual 2009 value. A host of countries, led by Britain but stretching from Italy to Japan and Russia, are planning joint Islamic finance ventures, seen as filling a perceived vacuum in confidence. The march of Islamic finance will form a major plank of the WIEF’s sixth annual conference in Kuala Lumpur next month.

    Tun Musa even blamed default in Dubai on the penchant in the Middle East to “look West”. A heavy hit endured by Singapore during the Asian financial crisis of a decade ago, was due to the same problem, he added. “Malaysia was hit least because we did not put our money in the West,” he insisted. In November, Iranian President Mahmoud Ahmadinejad argued before the 56 member-state Organisation of the Islamic Conference, the WIEF’s core backer, that the “world system based on usury has collapsed.”

    But anticipating criticism that a drive by Islamic finance was just another way to “ram Islam down Western throats,” Tun Musa said the onus was on Europe to find the political will to face down anti-immigrant, anti-Islam extremists, otherwise it would be “sunk.” Turkey’s long-stalled talks on EU accession represented the perfect test if Western and Islamic financial and economic models were to be successfully fused post-crisis.

    Europe was “going to lose a huge stabilising community that is playing a very important role as a bridge between the Muslim and the Western world,” he warned of a move, led by German Chancellor Angela Merkel, to pull back from full membership talks. “There will come a time that the Turks say ‘enough is enough, we’re going our own way,’” and that will be to turn towards Islam, he stressed.

    Today, there are three kinds of people: the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s. Earl Wilson

    Best Regards

  • London

    Most of Islamic Financial Products are not Islamic: Sheikh Saleh Kamel, Chairman and Founder of Dallah Al Baraka Group

    صالح كامل: أغلب منتجات البنوك الإسلامية غير “إسلامية”
    بقلم وائل مهدي
    Available at:

    صرح رئيس مجلس الغرف الإسلامية للتجارة والصناعة ورئيس مجموعة البركة المصرفية صالح كامل بأنه تم إنشاء هيئة إسلامية دولية للتأكد من العديد من المنتجات والخدمات التي تقدمها البنوك الإسلامية والتي هي في الواقع غير إسلامية.

    وقال كامل: “للأسف الشديد أن بعض البنوك توضع “لافتة” عبارة “إسلامي” والمنتجات المطروحة ليس لها علاقة بالإسلام.”

    جاءت تصريحات صالح كامل خلال مؤتمر صحفي عقده يوم أمس الأحد بمقر مجموعة دلة البركة التي يرأسها كامل، بمدينة جدة بمناسبة انعقاد الاجتماع الأول للهيئة الشرعية لتصنيف ورقابة المصارف الإسلامية والتي تتخذ من البحرين مقراً لها.
    تتمة المقالة في الأسفل ↓

    وأوضح كامل أن الاجتماع الأول الذي عقد أمس كان بهدف وضع النظام الأساسي واللوائح التنفيذية والنواحي الفقهية للهيئة الجديدة والتي ستقوم بتصنيف المنتجات الإسلامية التي تصدرها البنوك المختلفة للتأكد من مطابقتها للشريعة.

    وعن سبب تأسيس “الهيئة الشرعية للتصنيف والرقابة” قال صالح كامل بأن المجلس العام للبنوك والمؤسسات المالية الإسلامية والذي هو امتداد لاتحاد البنوك الإسلامية، قد رأى بأن عدد المصارف الإسلامية قد تجاوز 350 مصرفاً وأصبحت أغلب المنتجات الإسلامية لهذه المصارف مثار شك للعديد من المتعاملين.

    وعليه قرر المجلس في شهر رمضان الماضي إنشاء الهيئة الجديدة لحماية صناعة المصرفية الإسلامية من التشويش الذي تتعرض له المنتجات الإسلامية. وأضاف كامل بأن الهيئة ستنظر في كافة المنتجات الإسلامية المتاحة وتبين مدى ملاءمتها مع الشريعة من ناحية المقصد والآلية.

    وأسفر اجتماع يوم أمس الأحد والذي حضره عدد كبير من أعلام المصرفية الإسلامية عن اختيار الشيخ مختار السلامي مفتي تونس “السابق” ليكون رئيس للهيئة الجديدة وسيحل الدكتور عبدالسلام العبادي أمين مجمع الفكر الدولي، في منصب نائب رئيس الهيئة. وتم اختيار لعضوية الهيئة نخبة بارزة تتكون من “4” أشخاص وسيتم إنشاء الأمانة العامة لها وستبدأ العمل قريباً بحسب تصريحات كامل.

    وحضر الاجتماع يوم أمس العديد من الشخصيات الإسلامية في مقدمتهم الشيخ مختار السلامي والدكتور عبدالسلام العبادي ، والدكتور صالح المرزوقي أمين مجمع الفقه التابع لرابطة العالم الإسلامي وأحمد محمد علي رئيس البنك الإسلامي للتنمية ومندوبين عن بنوك مركزية وهيئات مركزية مثل بنك السودان المركزي وبنك باكستان المركزي والبنك الماليزي ومجمع الفقه الإسلامي بالهند.

    كما حضر الإجتماع أعضاء من اللجنة الشرعية لوزارة الأوقاف الكويتية التي تقوم برقابة البنوك الإسلامية في الكويت ومدير إدارة الإفتاء في دبي الشيخ أحمد الحداد ومن السودان الدكتور أحمد علي عبدالله والشيخ محمد سعيد البوطي من سورية والدكتور أحمد الطيب رئيس جامعة الأزهر.

    وقال كامل بأن هناك أجهزة مساندة في الصناعة المصرفية الإسلامية تتمثل في هيئة المعايير والمحاسبة والتي وضعت عدد كبير من المعايير الممتازة شرعياً ولكن لم يلتزم عدد كبير من البنوك الإسلامية بتنفيذ هذه المعايير للأسف الشديد على حد تعبير كامل.

    وأوضح كامل أن بإنشاء هذه الهيئات انتقلت المسئولية من المشرعين إلى المتعاملين ولهذا يجب أن يسأل كل شخص البنوك الإسلامية التي يتعامل معها إذا ما كانت تطبق معايير المحاسبة الإسلامية التي وضعتها “هيئة المعايير والمحاسبة”؟ وهل المنتجات المطروحة مصنفة من قبل الهيئة الشرعية للتصنيف والرقابة أم لا؟

    وقال كامل: “إذا كانت البنوك لا تطبق هذه المعايير ولا تصنف منتجاتها من قبل الهيئة الجديدة فنحن لسنا مسؤولون عن ذلك.”

    وتزدهر حالياً صناعة المصرفية الإسلامية في العالم والتي تجاوز حجمها 300 مليار دولار. والمصرفية الإسلامية هي الأسرع في النمو حالياً في ظل الازدهار الاقتصادي للدول الإسلامية وخاصة في الشرق الأوسط، مما دفع العديد من البنوك الأجنبية إلى التوجه إلى تطوير منتجات إسلامية وفي مقدمتها بنك “إتش إس بي سي” البريطاني و “سيتي بانك” الأمريكي.

    وتتنافس لندن لتكون عاصمة للتمويل والبنوك الإسلامية مع العديد من العواصم المالية العربية والإسلامية خصوصاً دبي والمنامة وكوالالمبور.

    من الجدير بالذكر أن المجلس العام للبنوك والمؤسسات المالية الإسلامية والذي هو امتداد لاتحاد البنوك الإسلامية الذي انشئ في الثمانينات وهو المنظمة الأولى في المجال البنكي الإسلامي التي تنبثق عن منظمة المؤتمر الإسلامي ويضم في عضويته 120 بنكاً.

    ومن أهم البنوك المؤسسة للمجلس العام هي هي البنك الإسلامي للتنمية، مجموعة الفيصل الإسلامية، مجموعة البركة، بيت التمويل الكويتي، وأخيراً بنك دبي الإسلامي

    Best Regards

  • Al Hambra, Granada, Andalusia, Spain



    Dear Readers,

    I am very grateful to share with you my recent article pertaining to agency theory in Islamic financial institutions. In view of the scarcity literatures on the subject, I wish to highlight one of the recent studies examining the state of corporate governance and the relevancy of agency theory in IFIs which is available in the journal of Corporate Governance: An International Review. 17 (2). pp. 142-158. Hopefully, my remarks and commentaries in this paper will enlighten further discourse on the agency theory in IFIs. For full article click here:

    (i) Article Review: New Insight on Agency Theory in IFIs: A Reappraisal
    (ii) Original Article: Safieddine, (2009). Islamic Financial Institutions and Corporate Governance: New Insights for Agency Theory. Corporate Governance: An International Review. 17 (2). pp. 142-158.

    This paper specifically aims at critically examining the arguments put forward by Safieddine, (2009) on the new insights for agency theory in IFIs by highlighting several fundamental corporate governance issues. Safieddine, (2009) has made valuable contribution on the topic of corporate governance by providing useful and beneficial information on the agency theory in IFIs. Nevertheless, his approach is mainly influenced by the shareholders value model of corporate governance which is to certain extent contradicted with the existing literatures that advocate the stakeholders’ value system as the ideal model for Islamic corporate governance. Indeed there are some areas that need further explanation and clarification particularly in term of theoretical framework of the agency theory in IFIs as well as the foundational dimension of corporate governance in Islam from the epistemological aspect.

    Enjoy Reading!

    Best Regards

  • Atlantis Hotel, Palm Jumeirah, Dubai, UAE

    The IFSB-IRTI-IDB publishes report on Islamic Finance: Global Financial Stability

    The IFSB-IRTI-IDB publishes report on Islamic Finance: Global Financial Stability

    Available at:

    A report on Islamic Finance: Global Financial Stability was launched in the Inaugural Financial Stability Forum organised by the Islamic Financial Services Board (IFSB) on Tuesday, 6th April in Khartoum. The Report examines the intrinsic strength of the Islamic finance model, the state of the Islamic financial services industry and challenges and strategies for strengthening financial stability in the Islamic financial services industry. Although the Islamic financial services industry was relatively less affected by the crisis, its underlying causes bear important lessons for the Islamic financial services industry going forward. This becomes even more important as Islamic finance operates within the global financial system that is characterised by increasingly large and volatile cross-border capital flows amid an environment of deeper international financial integration. Therefore, it is vital to accelerate the development of critical building blocks of the Islamic financial system to respond to the changing economic and financial landscape, and support the orderly development of Islamic finance for sustained global financial stability.

    The Report recommends, among other things, the establishment of an Islamic Financial Stability Forum or IFSF. The IFSF will be a dedicated forum to promote cooperation and collaboration among its members in areas such as surveillance, sharing of experiences in crisis prevention, management and resolution, implementation of international standards as well as international cooperation in capacity building and in the development of emergency infrastructure and facilities.

    The Inaugural Financial Stability Forum themed “Developing Capacity Building to Enhance Financial Stability in the Islamic Financial Services Industry” was held in Khartoum on 6 April 2010 and was chaired by H.E. Dr Sabir Mohamed Hassan, Governor of Central Bank of Sudan, and Chairman of the IFSB Council. Two papers were presented and discussed in the Forum, entitled (i) capacity building in the financial sector, and (ii) capacity building for central banks and regulatory authorities. The Forum was attended by the central bank Governors, governors’ representatives who are members of the IFSB Council and the Vice President of the Islamic Development Bank.

    The Report entitled Islamic Finance: Global Financial Stability is jointly published by the IFSB, the Islamic Development Bank (IDB) and the Islamic Research and Training Institute (IRTI). Dr Ahmad Mohamed Ali, President of the IDB Group stated in the Preface of the Report, “We believe that there is much that Islamic finance can contribute to this process. From this perspective, the new financial order would be more inclusive and more global in nature, lending it more support and sustainability. Collectively, we hope that we will be able to build a more stable and more peaceful world for the future generations.”

    The Report was produced by a Task Force on Islamic Finance and Global Financial Stability, in response to the recommendations of the Forum of the Global Financial Crisis and its Impact on the Islamic Financial Industry, which was organised by the IDB Group on 29 October 2008. The Task Force, headed by H.E. Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, includes an international group of eminent scholars, practitioners and Islamic finance experts. Dr. Zeti remarked that it is hoped that the report will provide useful insights on Islamic finance and the important focus that needs to be given to financial stability in the rapidly changing international financial environment. Equally important is the capacity to contribute to global financial stability. The priorities identified in this report are also aimed at strengthening further the foundations that will ensure the sustainability and capacity of Islamic finance to contribute towards global growth and a greater shared prosperity.

    For full report click here:

    Best Regards

  • University of Glasgow, Scotland

    IPM launches first Sharia fundamental index

    IPM launches first Sharia fundamental index
    Available at:

    Swedish based investment manager Informed Portfolio Management (IPM) said it has developed the first Sharia compliant portfolio based on fundamental index methodology for the Sedco Group based in Saudi Arabia. The mandate is based on a Global Sharia screened portfolio using FTSE Research Affiliates Fundamental Index (Rafi) Global Index weightings.

    Structured as a managed account, it joins the suite of IPM Rafi Funds in which many leading European institutional investors are invested, the company said in a statement. A Sharia compliant Rafi portfolio will benefit those institutions seeking the additional returns that Rafi offers, but that were previously excluded from existing Fundamental Index platforms.

    Commenting on the launch, Jonas Rinne, chief executive officer of IPM, said: ‘IPM is the market leader in implementing Fundamental Index solutions for what is an increasing number of European institutional investors.’ ‘This innovative new mandate builds on our expertise in this area and brings the advantages of the RAFI strategy to an important new range of investors in the Middle East and on a wider global scale.’

    The Fundamental Index methodology is a unique approach to portfolio construction, in which index weights are determined by fundamental measures of company size (cash-flow, book value, dividend and sales), instead of being based on price and valuation.

    Capitalisation weighted indices overweight all overvalued securities and underweight all undervalued securities. The Rafi approach aviods this problem, while retaining the benefits of index investing: full market representation, diversification, large capacity, high liquidity and low turnover.

    Rafi indices have outperformed their capitalisation-weighted counterparts by over 200 basis points per annum on average over time. Enhanced Rafi further improves the methodology, adding measurable value through systematic accounting screening and active re-weighting. Through a co-operation with Swedish-based GES Investment Services, IPM Rafi funds are screened for compliance with international conventions and guidelines on environment, human rights and business ethics.

    IPM is an investment manager offering diversified solutions to institutional investors. The assets under management currently exceed $8 billion for over 50 of Europe’s most sophisticated pension funds, sovereign funds and other institutional clients in GTAA, Currency Management, and Equity Management strategies.

    You can discover what your enemy fears most by observing the means he uses to frighten you. Eric Hoffer


  • National Library of Wales

    UM Financial launches first Islamic credit cards in Canada

    No interest MasterCard aims at devout Muslims
    Available at:–operating-finances-in-good-faith?bn=1

    Zero interest and faith are not words one commonly associates with credit cards. They do have a place in discussions about the iFreedom Plus MasterCard, tailored to meet the religious requirements of Canada’s Islamic community and recently launched by Toronto company UM Financial. “There are clients in the market looking for structured products that are compliant,” from credit cards to mortgages, said Omar Kalair, president and chief executive officer. UM Financial plans to market the card to all Canadians.

    The card meets the requirements of Sharia law, which prohibits usury, by being prepaid and therefore interest free, said Kalair. “Trade is permitted, but usury is forbidden,” he explained. Kalair, whose company has tried to offer Sharia compliant mortgages in the past, sees the card as a way to highlight an untapped segment of the Canadian population seeking financial offerings tailored to meet the requirements of their faith.

    He estimates there are roughly one million people who identify as Muslim in Canada. According to census data 579,000 people in Canada identified as Muslim in 2001. The next count won’t be published until 2012. About 100 people are testing the card, which can hold up to $6,000 and 10,000 will be made available to the general public this month. Activating the card for two years costs $50. Benefits include no monthly fee, no transaction fees, one per cent cash back on purchases of more than $100, and discounts on flights with Etihad Airways.

    Kalair said it is common for new immigrants from Middle Eastern or African countries to ask him if Canadian banks offer Sharia-compliant products. They do not, he said. UM Financial launched a Sharia compliant mortgage in 2005 through a funding partnership with the Credit Union Central of Ontario. The project started in 2005 and ran until 2007, with a funding line of $120 million. After the credit crisis hit they were not allowed to take on new clients, Kalair said.

    Kalair said 6,000 of his company’s clients are seeking a compliant mortgage and UM Financial is in active talks with Canadian financial institutions and hope to have a product available by 2010. “They do see it as a potential market…it is just a matter of timing,” said Kalair, adding four out of the big five banks sent representatives to a recent conference focusing on Islamic finance in Canada. Kalair was among the key organizers. At least one major Canadian bank has attempted to offer Sharia complaint products.

    RBC tried unsuccessfully to launch a Sharia-compliant equity-linked note investment product a few years ago, said Kalair. “When you have one of the leading banks try to go after a niche market and they fail it becomes a detriment for others institutions looking at it.” Kalair said the market for investment products is small, compared to the need for financing products, but a holistic approach is the best way to generate appeal. “If you go to 10,000 clients who have an Islamic mortgage they will be more receptive to do Islamic investments,” he said.

    Walid Hejazi, an associate professor of international business with the Joseph L. Rotman School of Management at the University of Toronto, said there is confusion about Islamic finance. The products are “just a financial instrument with a different set of characteristics,” said Hejazi. There is a huge demand for compliant mortgage products, he said. Canadian banks have lagged in tapping into this potential client pool “because we are a small protective market,” he said. “As long as it is compliant with the bank act there should be no problem at all offering those financial services.”

    Hejazi said that because Canada is slipping when it comes to foreign investment and the banks should be more open to Islamic finance to fill the deficit. Building demand takes several years and US institutions have taken up to ten years to break even on similar instruments, said Hejazi. “It requires that the financial institutions not just try it once and walk away,” he said.

    The demand dimensions for Islamic finance products in the Canadian market are becoming a bit clearer, said Dany H. Assaf, a partner at Bennett Jones LLP. “The reality is like any development of a new market segment; it is evolutionary and it is driven by the need to meet demand and to respond to competition.” Assaf described the market as ripened, and said he believes the market is waiting for one major player to move and will follow suit. Some Islamic financial projects were shelved when the economic downturn hit and people chose to focus on securing their core offerings, he said. “The storm has largely past it appears and I think people are going to get back to their original plans,” said Assaf. “You are going to see more movement on these offerings.”

    “Modern man drives a mortgaged car over a bond-financed highway on credit-card gas.” Earl Wilson


  • Raby Castle, Durham