The Modern Journey of Development

The Modern Journey of Development
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today 10th May 2015

Islamic Finance – Our Journey

Article Overview

See also: A History of Islamic Finance

An excellent video produced by the Royal Award (Malaysia) outlining the main milestones in the modern evolution and development of Islamic Finance.

About the Royal Award

The Royal Award for Islamic Finance (RAIF) is an international award that is held every two years to recognise one exceptional individual who has excelled in advancing Islamic finance globally through outstanding performance and contribution. The Royal Award provides further impetus to deepen the body of knowledge and cross-border application of Islamic finance.

Video – The Journey of Islamic Finance

Key Milestones

1961 – Establishment of first Islamic Bank. Mit Ghamr Bank, Egypt.

Dr Ahmad El-Naggar, an economist who pioneered the formation of the Islamic banking system by setting up Mit Ghamr Saving Association in Egypt.

1963 – Establishment of Tabung Haji, Malaysia Professor Diraja Ungku Abdul Aziz.

Malaysian economist who conceptualised a more structured form of savings by the Muslim community for the needs of performing the Hajj.

1975 – Establishment of Islamic Development Bank

Tunku Abdul Rahman shared his idea for an international Islamic financial institution with King Faisal, and together they brought the idea of IDB to fruition.

1975 – Establishment of First modern Islamic Bank

Dubai Islamic Bank His Excellency Saeed Bin Ahmed Al Lootah founded the world’s first modern Islamic Bank.

1979 – Establishment of first Takaful Company, Islamic Insurance Company

Sudan Islamic Insurance Company (Sudan) contributed effectively in the Islamisation of the insurance sector in Sudan.

1979 – Establishment of Islamic Arab Insurance Company

UAE Islamic Arab Insurance Company. A leading takaful and re-takadul company operating in more than 60 countries.

1981 – Formation of Dallah Al Baraka Group

Saudi Arabia Shaikh Saleh Abdullah Kamel founded the Dallah Al Baraka Group

1981 – Establishment of Dar Al Maal Al Islami Trust, Switzerland

Founded the Dar Al-Maal Islami Trust in Geneva. Acted as parent institution for 55 Islamic Banks. The group comprises three main business sectors which were Islamic Banking, Islamic Investment and Islamic Insurance.

1982 – Establishment of Islamic Bank International

Denmark Islamic Bank International of Denmark was the first Islamic bank in Europe, based in Copenhagen.

1983 – Establishment of Bank Islam, Malaysia

The first Sharia compliant bank in the Asian region

1984 – Establishment of Syarikat Takaful, Malaysia

The first Islamic insurance company offering both general and family takaful

1990 – Establishment of AAOIFI, Bahrain

The Accounting and Auditing Organisation for Islamic Financial Institution (AAOIFI) is an international autonomous non-profit corporate body responsible for the accounting, auditing, governance, ethics and Shariah standards for the Islamic financial industry.

1990 – Issuance of first modern Sukuk.

Shell MDS (Malaysia)

1992 – Introduction of Islamic windows/Islamic Banking Scheme, Malaysia

The Islamic window concept was introduced when Bank Negara Malaysia introduced the interest free banking scheme which allowed financial institutions of offer Islamic banking products and services using their existing infrastructure and branches. This resulted in the rapid growth of the Islamic banking sector.

1994 – Issuance of the first Sukuk Mudharaba, Cagamas, Malaysia

1997 – First Islamic stockbroking firm in the world. BIMB Securities, Malaysia

Introduction of worlds 1st Shariah compliant screening for listed securities, Malaysia

1999 – Establishment of the 1st Islamic Index, Bahrain

Dow Jones Islamic Market Index for investors seeking Shariah compliant stocks

2001 – 1st Guidelines on Offering of Asset Backed Debt Securities, Malaysia

2001 – Council for Islamic Banks & Financial Institution (CIBAFI), Bahrain

The aim of CIBAFI is the develop the Islamic finance industry in various fields including training and HR development. 2001 – Kumpulan Guthrie Barhad. Issuance of 1st Global Corporate Sukuk Ijara, Malaysia.

2002 – Establishment of Islamic Financial Services Board (IFSB)

Malaysia IFSB is an international standard setting body comprising regulatory and supervisory agencies to ensure the soundness and stability of the Islamic financial services industry.

2002 – International Islamic Financial Market (IIFM), Bahrain

An international standard setting organisation focusing on the Islamic capital and money market.

2002 – Issuance of the 1st Global Sovereign Sukuk.

Government of Malaysia

2005 – Issuance of the 1st Sukuk Musharakah

Musyaarakah One Capital

2006 – Issuance of 1st Exchangeable Sukuk, Kazanah Nasional, Malaysia

2009 – Establishment of Bura Suq Al Sila, Malaysia

Bursa Suq Al-Sila is a commodity trading platform dedicated to facilitate Islamic liquidity management and financing.

2010 – First Sukuk in Singapore Dollars, Kazanah Nasional, Malaysia

The largest sukuk issuance at that time.

2010 – International Islamic Liquidity Management Corporation (IILM)

Malaysia Established by monetary authorities and multilateral organisations to create and issue short-term Shariah compliant financial instruments to facilitate effective cross border Islamic liquidity management.

2011 – The first sukuk issuance in Renminbi (RMB500 million)

Kazanah Nasional, Malaysia

2011 – Islamic Interbank Benchmark Rate (IIBR) Thomson Reuters

The first Islamic interbank benchmark rate platform providing a robust indicator of the average expected cost of short-term Islamic interbank marketing funding.

2012 – Bloomberg AIBIM Bursa Malaysia MYR Sukuk Index, Malaysia

Serves as a benchmark for investors of Riggit denominated sukuk in Malaysia.

2014 – First Sovereign Sukuk issued by a non-Muslim nation, UK

The United Kingdom becomes the first non-Islamic country to issue a sovereign Sukuk.

Join the conversation at #IslamicFinance and #Sukuk