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In writing Global Leaders in Islamic Finance, Thomson Reuters Editor, Islamic Finance Gateway, Emmy Abdul Alim has accomplished a rare feat of scholarship akin to such modern classics as Market Wizards and The Money Masters. Taking her cue from authors Jack Schwager and John Train, she has brought together an elite group of leaders who have broken new ground in Islamic finance and let them express, in their own words, their views on the development, rise and future course of the industry.

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Available wherever books and ebooks are soldwww.wiley.com/buy/9781118465240

978-1-118-46524-0 | Hardback 352pages | December 2013 US$34.95 | £23.99 | €28.80

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Global Leaders in Islamic FinanceThe 10 leaders featured in this book stand on their own strengths and merits. In selecting people to be interviewed for this book, the author, Emmy Abdul Alim’s overarching aim was to include living individuals whose contributions to Islamic finance have made a global impact and who have blazed new trails and broken new ground for Islamic finance. In this book, Emmy offers rare insider perspective on Islamic finance focused on the development, rise and future trajectory of the global industry.

Chapter 1 - the IslamIC eConomIst/ aCtIvIst

Professor Khurshid Ahmad

“My contributions, humble they are, were, in the earlier phase, to explain what Islamic economics is and show why a new approach was needed in economics. There was also a need to show that riba (interest) is at the root of many problems, not only in the Muslim world, but globally, and that we have to get rid of it.”

The development of the theoretical framework for Islamic economics, banking and finance started in the 1950s, most particularly among Arab, Indian and Pakistani scholars and activists. Two decades later, the 1970s saw the kickstart of the operationalizing of Islamic banking, and the arrival of Islamic economics as an academic discipline. At the heart of this development stands Professor Khurshid Ahmad. Professor Khurshid’s vision and activism from the 1960s planted the seeds for the development of Islamic economics at the institutional, political, and academic level. He was seminally involved in organizing the watershed First International Conference on Islamic Economics in Mecca in 1976, and started the first ever academic Islamic economics programme in the 1960s at Karachi University. He later served as the founding chairman of the International Institute for Islamic economics at the International Islamic University in Islamabad, established in 1983. Professor Khurshid has also been intimately involved at the national level with Pakistan’s attempts at Islamising its economy, since 1978. Professor Khurshid’s work also extends to the United Kingdom where his Islamic Foundation, an institution he founded in Leicester in 1973, has been a major influence.

Chapter 2 - the very FIrst mover

Saeed Bin Ahmed Al Lootah

“I was raised on Islamic teachings and these say that riba (interest) cannot be touched. Travelling to many countries I saw how people transacted with banks and did their business and trading. Over here in Dubai there were also these riba banks. And nobody said anything, nobody objected. That made me think: Why do we have to accept their banking and financial system? Why don’t we use Islamic principles?”

Saeed Bin Ahmed Al Lootah, or Hajj Saeed as he is known, established the world’s first Islamic commercial bank in 1975. Dubai Islamic Bank was a bold pioneering venture that arose primarily from Hajj Saeed’s leap of faith. To this day, Dubai Islamic Bank is the United Arab Emirates’ leading Islamic commercial bank. Hajj Saeed is regarded as a true pioneer not only in Islamic banking but perhaps more profoundly now with Dubai’s ambitions of becoming the world’s capital of the Islamic Economy, Hajj Saeed is regarded as a visionary within the realm of the larger Islamic economy. Hajj Saeed is famous for saying that the economy and education are the two most important areas that need development in the life of man. While his life’s work in Islamic banking and finance has been largely limited to Dubai Islamic Bank in the UAE, he has made far-reaching contributions to the overall Islamic economy through his businesses and educational institutions that are established and run based on Islamic precepts. For example, Al Islami Foods, established in 1981, one of the many businesses under his successful SS Lootah Group, is recognized as a top 40 Arab brand by Forbes magazine.

9781118465240 | Hardback | 352pages | December 2013 | US$34.95 | £23.99 | €28.80

The leaders featured are:


Chapter 3 - the Well oF InFluenCe

His Royal Highness Prince Mohamed Al Faisal Al Saud

“How do you measure success? Do you measure it by being an example or do you measure it by accomplishing your goal? Our goal is not yet accomplished, and we still have a long way to go. But if you measure success as being an example, then we have succeeded. We are telling the whole world we have a system, that the system is operable; here it is, if you want you can use it. Even a lot of riba banks today offer Islamic services so in that sense, our products now are being promoted by our competitors.”

Perhaps the most prominent pioneer of Islamic finance, His Royal Highness Prince Mohamed Al Faisal Al Saud’s driven activism in the 1970s and 1980s planted the seeds for numerous developments that have contributed to the creation and growth of the global Islamic finance industry. A son of the highly influential and respected late Saudi King Faisal (who was known as the King of the Ummah, or King of the global Islamic community), who reigned from 1964 until his assassination in 1975, Prince Mohamed followed through with his late father’s desire to see Islamic financial institutions spread across the world. Prince Mohamed’s Dar Al-Maal Al-Islami (DMI) exploded onto the scene in 1981 in quite prominent fashion and was the Islamic finance industry’s first ever multinational corporation, with founding shareholders made up of heads of state and royalty across the Muslim world. In the words of scholar Ibrahim Warde DMI’s establishment “was a potent mix of finance, politics and religion.”

Under DMI Prince Mohamed established Islamic financial institutions across the Arab world and North Africa, and Malaysia’s former Prime Minister Dr Mahathir Mohamad credits the prince for planting the idea of an Islamic bank in Malaysia. DMI was the first Islamic financial institution to set up a sharia supervisory board whose function was to approve all Islamic operating systems. Today, sharia supervisory boards are a default setting in all Islamic financial institutions across the globe. DMI was also a main influence in the establishment of the global Islamic finance industry’s first standard-setting body – the Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI) – in Bahrain in 1991. Today, DMI and its subsidiaries are spread across the world - not only across the Middle East and North Africa but also in Europe and Asia.

Chapter 4 - steadIly spreadIng the BlessIngs

Saleh Abdullah Kamel

“It has been beyond our dreams to have Islamic banks all over the world, holding this amount of money.”

Saleh Abdullah Kamel, or Sheikh Saleh as he is referred to, is a pioneer whose contributions have left an indelible imprint on the global Islamic banking and finance industry. His name is almost synonymous with the modern Islamic finance industry. He has established Islamic financial institutions under his Al Baraka banner, and initiated research centres and a widely respected annual symposium, all of which are foundational building blocks of the global industry, and all of which have advanced and supported the development of the global industry. Sheikh Saleh’s Al Baraka banks started with the Jordan Islamic Bank in 1978 and to date can be found in 13 countries. From 1982 to 1993 Sheikh Saleh ran Al Baraka International Bank in the United Kingdom; the bank was a successful Islamic financial institution.

Sheikh Saleh is perhaps even better known away from the financial sector, as he is regarded as one of Saudi Arabia’s most successful business tycoons. Sheikh Saleh retired from business life in the late 2000s but continues to keep busy with different projects and initiatives. He heads a string of organisations that further the cause of the larger Islamic Economy, including the Islamic Chamber of Commerce and Industry, and the General Council for Islamic Banks and Financial Institutions.

Chapter 5 - the systematIC rIse oF a natIonal Industry

Dr Mahathir Mohamad

“In a way, [Islamic finance] has succeeded more than I expected. But also it has not expanded to be accepted generally as a banking system. You see we are emphasizing the religious and Islamic part of it. If you stress on not charging interest and not calling it Islamic banking, maybe it will expand much faster.”

Shortly after he became Prime Minister in 1981, Tun Dr Mahathir Mohamad ordered the formation of a national steering committee to explore the possibility of opening an Islamic bank in Malaysia. The formation of the country’s first Islamic bank in 1983 was a direct result of the recommendations of that committee. Since then the country’s Islamic finance industry has grown from strength to strength. Tun Dr Mahathir presided over the country’s global rise in Islamic finance as prime minister from July 1981 to October 2003. Today Malaysia is recognized as the country with the fullest functional Islamic financial system, and the dominant global player in the sukuk (Islamic bonds) market.

The systematic rise of the national industry demands the contributions of an extensive group of experts – to this end, Tun Dr Mahathir is joined in the chapter by three Islamic finance experts. Tan Sri Nor Mohamed Yakcop was responsible for Islamic banking at the Malaysian central bank from the 1980s to become Tun Dr Mahathir’s Special Economic Advisor during the Asian Financial Crisis in the late 1990s and then Minister of Finance II from 2004 to 2009, and then Minister in the Economic Planning Unit until May 2013. Mustapha Hamat was Managing Director of Bank Islam, the country’s first Islamic bank,


for 18 years, and remains a highly respected international Islamic finance expert, working quietly yet forcefully “behind the scenes”. Wan Rahim Kamil was also with Bank Islam from the outset, and is the expert responsible for structuring Malaysia’s first sukuk (Islamic bond) in 1990. He is recognized the world over as an expert in the Islamic capital market and is consultant to Malaysia’s Securities Commission.

Chapter 6 - the IslamIC eConomIst

Professor Abbas Mirakhor

“Personally, if our policymakers, students, and industry players as well as all interested parties understand this one principle – risk sharing – according to which Allah ordains that humans must organize their lives, that would be my endgame. That is the singular, most important principle upon which the hope for the future of mankind rests. Anything else is not going to work.”

Regarded as a leading Muslim economist of the second phase of Islamic economics, and one of the intellectual godfathers of Islamic finance, Professor Abbas Mirakhor was an expert economist consulted by the United State’s NASA in the 1970s, and was Dean of the International Monetary Fund’s executive board. He retired from the IMF in 2008 after 24 years with the Fund. He is now distinguished scholar and first holder of Kuala Lumpur-based INCEIF – The Global University of Islamic Finance’s chair in Islamic finance.

According to Dr Zamir Iqbal, an economist with the World Bank, it was Professor Abbas who was responsible for providing “the intellectual thinking and rich theoretical foundation” for the IMF’s research on Islamic finance. In this vein, Professor Abbas Mirakhor’s work has been instrumental in creating the bridge between Islamic economics and conventional ‘Western’ economics. He and his colleagues showed Western-trained economists what Islamic economics and Islamic finance is about, and more important, that the Islamic system is a viable one. At the same time, the work has shown other Muslim economists and the Islamic world that standard economic techniques could be used to analyse the issues of Islamic economics, banking, and finance.

In 2002, well before the start of the global crisis in 2007, Professor Abbas Mirakhor pointed out the fragility of a debt-based system and that more financial crises were possibly to come. Professor Abbas’ main argument for Islamic finance lies in its underlying principle of risk sharing, which is directly opposed to the conventional interest-based system that rests on risk transfer and risk shifting. He has written prolifically on the subject, and his 2012 book “Risk Sharing in Finance: The Islamic Finance Alternative” (Wiley) was praised by Nobel Laureates Robert C. Merton and George Akerlof. On the ground, Professor Abbas works closely with the Malaysian authorities to narrow the paradigm gap between what Islam teaches and what actually happens in the markets.

Chapter 7 - the gloBal standard- setter

Professor Rifaat Ahmed Abdel Karim

“You can’t have Islamic finance in isolation. It won’t grow that way. That’s why, for example, at the IFSB when we drafted the Articles of Agreement, the first objective was to adapt existing international standards and then to take into consideration the specificities of shari’ah. In that case, for example, you have to look at what the Basel Committee publishes, take them, and adapt them to Islamic finance. That’s how you integrate it into the global finance environment.”

Professor Rifaat Ahmed Abdel Karim has been providing leadership in setting the standards for the Islamic finance industry since 1991. He was the inaugural Secretary-General for two of the industry’s international standard-setting bodies – the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). At AAOIFI from 1991 to 2002 and thereafter at IFSB from March 2003 to April 2011, Professor Rifaat has been at the heart of strengthening the industry and ensuring its stability. He was responsible for expanding both AAOIFI’s and IFSB’s membership, and introducing many new market players and national regulators to Islamic finance. IFSB has been the most substantive platform for regulators of both the conventional and the Islamic financial industries to meet.

While contributing professionally at the highest global levels, he has also maintained a steady stream of authoritative academic and scholarly works. Professor Rifaat is an authority on accounting and auditing for Islamic financial institutions and has written, co-authored and edited many books on the subject as well as on regulatory challenges facing the Islamic finance industry. His work has created a bridge between the Islamic practice and the conventional or ‘Western’ academic community, drawing them into the conversation.

His contributions to the global Islamic finance industry continues with his leadership of the International Islamic Liquidity Management Corp., where he assumed the position of chief executive in October 2012.


Chapter 8 - the sharI’ah sCholar

Sheikh Nizam Yaquby

“We should join like-minded people, people of the ethical finance movement, the corporate social responsibility movement, the green movement, all these people we have common causes with. It doesn’t mean we can adopt everything they say or that they will adopt everything we say, but I think if we join hands with these people, we will be a growing power which politicians would have to deal with in the future.”

Sheikh Nizam Yaquby is one of the most prominent and influential shari’ah scholars practising in the Islamic finance industry today. He is sought for his expertise by Fortune 500 companies as well as small Islamic financial institutions. The main role of shari’ah scholars in the Islamic finance industry is to align financial structures, transactions and operations to shari’ah. Because of this, shari’ah scholars are known as the ‘gatekeepers’ of the Islamic finance industry; their signatures are needed to pass off on millions and billions of dollars worth of transactions. Sheikh Nizam’s first step into Islamic finance was as a shari’ah advisor to the Arab Islamic Bank in Bahrain in 1989. Since then he, and an elite circle of shari’ah scholars, have been responsible for some of the greatest strides in Islamic finance, including the move towards greater harmony in shari’ah rulings and the Dow Jones fatwa that unleashed the Islamic capital market in the late 1990s.

Chapter 9 - the laWyer

Michael McMillen

“One of my criticisms of the development of modern Islamic finance in the global context is that we have done a poor job of conveying to people that, in most areas, such as leases, shari’ah principles as applied, such as through the nominate contracts arrangements, are more similar to their Western counterparts (and vice versa) than they are different. It’s like the human genome – over 99 percent of the genome of all humans is the same. The amount of the genome that’s different is small. Yet too many people focus on differences.”

Michael McMillen is one of the most prominent Islamic finance lawyers in the world. He is also a medical doctor. An American and a non-Muslim, McMillen strongly believes in the ethical nature of Islamic finance. McMillen’s work in the global Islamic finance industry started in Saudi Arabia in 1996 and since then he has worked on Islamic finance deals and structures all around the world. McMillen works closely with leading shari’ah scholars such as Sheikh Nizam Yaquby on structuring financing transactions and investment funds. Together, legal experts like McMillen and shari’ah experts work to harmonise both shari’ah and non-Islamic legal concepts and frameworks. It has been

an immense undertaking, and McMillen’s success in building bridges between different legal systems has made him an exemplary lawyer in Islamic finance. He has been responsible for some of the most significant transactions and structures in the United States, and he gives us direct insight into the widespread use of Islamic finance in the United States. In 2007 McMillen became the founding chair of the Islamic finance section of the American Bar Association (which boasts 400,000 members) and, since 2006, he has taught Islamic finance at the University of Pennsylvania Law School and the Wharton School of Business. He is currently a partner with law firm Curtis, Mallet-Prevost, Colt & Mosle LLP.

Chapter 10 - the equIty CapItal market man

Rushdi Siddiqui

“Islamic investing is actually about doing good by avoiding bad. Today’s way of investing in the conventional space is on environment, sustainability, and governance – ESG. But Islamic investing doesn’t push that. We’re still focused on financial ratios and permissible revenues and technicalities and mechanisms like that. These things, honestly, don’t capture anyone’s imagination anymore. It’s really high time to talk about positive screening, Islamic ESG – then the wider investment and financial community will pay attention.”

Rushdi Siddiqui may possibly always be known as the Index Man, and this would be entirely of his own doing. In 1999, Rushdi led a Dow Jones team and five shari’ah scholars to launch the Dow Jones Islamic Market Index (DJIMI), the first Islamic index to be integrated into a global financial platform. He then went on to create over 90 Islamic indices with Dow Jones. Rushdi then moved to Thomson Reuters where, as Global Head for Islamic Finance and OIC countries, he continued to build pioneering benchmarks for the global Islamic finance and halal industries. He is now focused on the sector he feels most connected to – halal. He recently set up his own private equity firm – Azka Capital - dealing exclusively with the global halal industry.

Islamic indices are based on shari’ah screens and as with the example of the Dow Jones Islamic Market Index, equities are filtered for different quantitative considerations aligned with shari’ah. Significantly, these shari’ah screens delisted Enron, World-Com, and Tyco six to eight months before their failures showed up because they no longer complied with shari’ah criteria. After 2008, Islamic investment portfolios have remained resilient in the global financial crisis because they were not exposed to companies like AIG, Lehman Brothers, and Bear Stearns. The birth of global Islamic indices like the Dow Jones Islamic Market Index that Rushdi set up have presented a massive boost for the Islamic capital market, with shari’ah compliant becoming a ready option for individual as well as much larger and more influential institutional portfolios globally.

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Extracted from Global Leaders in Islamic Finance: Industry Milestones and Reflections published in 2014 by John Wiley & Sons Singapore Pte.

Ltd., 1 Fusionopolis Walk, #07-01, Solaris South Tower, Singapore 138628. All rights reserved.

Copyright © 2014 by John Wiley and Sons Singapore Pte. Ltd.

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138628, tel: 65-6643-8000, fax: 65- 6643- 8008, email: [email protected]

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Contents

Acknowledgments xiiiSelected List of Acronyms xviiIntroduction xxi

Chapter 1 The Islamic Economist/Activist 1Khurshid AhmadEarly Influences: Muhammad Iqbal, MuhammadAsad, and Sayyid Abul A’la Mawdudi 3Operationalising Islam: Sayyid Abul A’laMawdudiand Jama’at-e-Islami 5Milestone: First International Conference onIslamic Economics 8International Influence: Islamic Economics as anAcademic Discipline 10Spreading the Message Abroad: Europe and theIslamic Foundation in the United Kingdom 14Islamisation of the Pakistani Economy 15Islamic Economics versus the Narrow Pursuitof Profit 19

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Contents

Acknowledgments xiiiSelected List of Acronyms xviiIntroduction xxi

Chapter 1 The Islamic Economist/Activist 1Khurshid AhmadEarly Influences: Muhammad Iqbal, MuhammadAsad, and Sayyid Abul A’la Mawdudi 3Operationalising Islam: Sayyid Abul A’laMawdudiand Jama’at-e-Islami 5Milestone: First International Conference onIslamic Economics 8International Influence: Islamic Economics as anAcademic Discipline 10Spreading the Message Abroad: Europe and theIslamic Foundation in the United Kingdom 14Islamisation of the Pakistani Economy 15Islamic Economics versus the Narrow Pursuitof Profit 19

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viii C O N T E N T S

Forty Years On: The Wood for the Trees 21The Last Word 24

Chapter 2 The Very First Mover 25Saeed Bin Ahmed Al Lootah

Always Begin at the Beginning 27Dubai: The Environment 30Dubai Islamic Bank: Early Response 32First Islamic Banking Conference—May 1979,Dubai 34Development and Challenges 35DIB, UAE, and Corporate Governance 39Hajj Saeed, Dubai, and the Islamic Economy 41Forty Years On 43The Last Word 45

Chapter 3 The Well of Influence 47Prince Mohamed Al Faisal Al Saud

Germination 48Catalysis: The Establishment of Dar Al-MaalAl-Islami 52The Business of DMI: Navigating UnchartedWaters 58Current Holdings 62Forty Years On: ‘‘The Aura Is Much Biggerthan the Reality’’ 64‘‘The Muslim World Went to Sleep’’ 72‘‘Eventually, I Think, Everybody Will Becomea Salafi’’ 77The Last Word 80

Chapter 4 Steadily Spreading the Blessings 81Saleh Abdullah Kamel

Spreading the Baraka 84Gone West: Al Baraka in the United Kingdom 88Advancing the Islamic Economy 91Islamic Megabank 91

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viii C O N T E N T S

Forty Years On: The Wood for the Trees 21The Last Word 24

Chapter 2 The Very First Mover 25Saeed Bin Ahmed Al Lootah

Always Begin at the Beginning 27Dubai: The Environment 30Dubai Islamic Bank: Early Response 32First Islamic Banking Conference—May 1979,Dubai 34Development and Challenges 35DIB, UAE, and Corporate Governance 39Hajj Saeed, Dubai, and the Islamic Economy 41Forty Years On 43The Last Word 45

Chapter 3 The Well of Influence 47Prince Mohamed Al Faisal Al Saud

Germination 48Catalysis: The Establishment of Dar Al-MaalAl-Islami 52The Business of DMI: Navigating UnchartedWaters 58Current Holdings 62Forty Years On: ‘‘The Aura Is Much Biggerthan the Reality’’ 64‘‘The Muslim World Went to Sleep’’ 72‘‘Eventually, I Think, Everybody Will Becomea Salafi’’ 77The Last Word 80

Chapter 4 Steadily Spreading the Blessings 81Saleh Abdullah Kamel

Spreading the Baraka 84Gone West: Al Baraka in the United Kingdom 88Advancing the Islamic Economy 91Islamic Megabank 91

Contents ix

World Zakat Fund 93The Halal Industry 94Ask Not What the Community of IslamicCountries Can Do for You 95Forty Years On: Mechanisms over Maqasid 96The Last Word 99

Chapter 5 The Systematic Rise of a NationalIndustry 101Mahathir Mohamad and the Malaysian StoryLead-up to the 1981 Decision 102Influence #1: Tabung Haji 103Influence #2: Tunku Abdul Rahman, the OIC,and the IDB 103

Influence #3: Prince Mohamed Al Faisal Al Saud 105National Steering Committee and EstablishingBank Islam 105Building an Industry Systematically 108Setting the Pace and Character of Overall NationalEconomic Development 108

Phase 1: 1983 to 1993—Establishment andEntrenchment 109

Shari’ah-Compliant Financial Instruments 113Phase II: 1993 to 2000—Liberalisation and Expansion 114On Growth and Development 116Islamic Capital Market: Malaysia as a GlobalSukuk Leader 117A Model Nation for Islamic Finance 122Phase III: 2000 and Beyond—Internationalisation 126The Better System 127Thirty Years On: And Still Much Moreto Be Done 132The Last Word 137

Chapter 6 The Islamic Economist 139Abbas MirakhorThe Second Stage of Islamic Economics 141Risk Transfer and the Global Financial Crisis 145

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Contents ix

World Zakat Fund 93The Halal Industry 94Ask Not What the Community of IslamicCountries Can Do for You 95Forty Years On: Mechanisms over Maqasid 96The Last Word 99

Chapter 5 The Systematic Rise of a NationalIndustry 101Mahathir Mohamad and the Malaysian StoryLead-up to the 1981 Decision 102Influence #1: Tabung Haji 103Influence #2: Tunku Abdul Rahman, the OIC,and the IDB 103

Influence #3: Prince Mohamed Al Faisal Al Saud 105National Steering Committee and EstablishingBank Islam 105Building an Industry Systematically 108Setting the Pace and Character of Overall NationalEconomic Development 108

Phase 1: 1983 to 1993—Establishment andEntrenchment 109

Shari’ah-Compliant Financial Instruments 113Phase II: 1993 to 2000—Liberalisation and Expansion 114On Growth and Development 116Islamic Capital Market: Malaysia as a GlobalSukuk Leader 117A Model Nation for Islamic Finance 122Phase III: 2000 and Beyond—Internationalisation 126The Better System 127Thirty Years On: And Still Much Moreto Be Done 132The Last Word 137

Chapter 6 The Islamic Economist 139Abbas MirakhorThe Second Stage of Islamic Economics 141Risk Transfer and the Global Financial Crisis 145

x C O N T E N T S

Advancing Risk Sharing for the Benefit of AllHumanity 147‘‘In Islam, the ‘Other’ Doesn’t Exist’’ 151IMF and Islamic Finance 152Forty Years On: The Wood for the Trees 155Building the Roads to a Better Economy 158The Last Word 160

Chapter 7 The Global Standard-Setter 161Rifaat Ahmed Abdel KarimAccounting for a New Paradigm 163AAOIFI: A Landmark in the History of ModernIslamic Finance 167Setting the Standards 168IFSB: Working with the Regulators 172Changing the Landscape: Integrating IslamicFinance into the Global Financial Architecture 178Twenty Years of Setting Standards for IslamicFinance 181Moving Forward 183The Last Word 184

Chapter 8 The Shari’ah Scholar 185Sheikh Nizam YaqubyThe Role of Shari’ah Scholars in IslamicFinancial Institutions 188What Is Shari’ah Compliance? 189Shari’ah Compliance for an Ethical Society 191Second-Generation Shari’ah Scholars 196OnTraining Shari’ah Scholars for Islamic Finance:Climb the Stairs One by One 197Two Boards, Three Boards, Four Boards, Five.How Many Is Too Many? 199Great Strides in Islamic Finance:The Contribution of Shari’ah Scholars 203‘‘Monumental Fatwa’’: Dow Jones Islamic Market Index 204Forty Years On: The Wood for the Trees 206The Last Word 208

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Contents xi

Chapter 9 The Lawyer 211Michael J.T. McMillenMany Firsts 213‘‘The United States Is Probably the SecondLargest Islamic Finance Market in the World’’ 217‘‘The United States Is One of the Easiest Placesin the World to Do a Shari’ah-Compliant Deal’’ 220Consulting and Structuring Deals Worldwide 222Critical Factors for the Development of IslamicFinance 222Code of Conduct: Lawyers and Shari’ah Scholars 226Sheikh Muhammad Taqi Usmani Sukuk Pronouncement 228On Freely Circulating Fatawa 229101: On Wholesale and Retail 230Maqasid al Shari’ah and the Non-Muslim IslamicFinance Lawyer 232Seventeen Years On: The Woods for the Trees 233The Last Word 234

Chapter 10 The Equity Capital Market Man 237Rushdi SiddiquiBuilding Indices and Benchmarks for the GlobalIndustry 239Global Viability: Outperforming ConventionalIndices and Averting Enron 241Wherefore the Pulse?: Shari’ah-Compliant andShari’ah-Based Indices 244Gaps and Disconnects 248Major Disconnect: On Information 252The United States of America, Islam, and IslamicFinance 253The Halal Industry 256The Last Word 258

Chapter 11 More than the Sum of Its Parts: FortyYears of Islamic Finance 261Growth beyond Expectations 263My Shari’ah, Your Shari’ah: What Is SoAuthentically Islamic about This System? 266

x C O N T E N T S

Advancing Risk Sharing for the Benefit of AllHumanity 147‘‘In Islam, the ‘Other’ Doesn’t Exist’’ 151IMF and Islamic Finance 152Forty Years On: The Wood for the Trees 155Building the Roads to a Better Economy 158The Last Word 160

Chapter 7 The Global Standard-Setter 161Rifaat Ahmed Abdel KarimAccounting for a New Paradigm 163AAOIFI: A Landmark in the History of ModernIslamic Finance 167Setting the Standards 168IFSB: Working with the Regulators 172Changing the Landscape: Integrating IslamicFinance into the Global Financial Architecture 178Twenty Years of Setting Standards for IslamicFinance 181Moving Forward 183The Last Word 184

Chapter 8 The Shari’ah Scholar 185Sheikh Nizam YaqubyThe Role of Shari’ah Scholars in IslamicFinancial Institutions 188What Is Shari’ah Compliance? 189Shari’ah Compliance for an Ethical Society 191Second-Generation Shari’ah Scholars 196OnTraining Shari’ah Scholars for Islamic Finance:Climb the Stairs One by One 197Two Boards, Three Boards, Four Boards, Five.How Many Is Too Many? 199Great Strides in Islamic Finance:The Contribution of Shari’ah Scholars 203‘‘Monumental Fatwa’’: Dow Jones Islamic Market Index 204Forty Years On: The Wood for the Trees 206The Last Word 208

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xii C O N T E N T S

A Viable Business Model 270Beyond Banking and Finance: The IslamicEconomy 273The Last Word: Commitment to the IslamicBasis as a Better Way 275

Glossary 279References 283About the Author 297Notes 299Index 315

Contents xi

Chapter 9 The Lawyer 211Michael J.T. McMillenMany Firsts 213‘‘The United States Is Probably the SecondLargest Islamic Finance Market in the World’’ 217‘‘The United States Is One of the Easiest Placesin the World to Do a Shari’ah-Compliant Deal’’ 220Consulting and Structuring Deals Worldwide 222Critical Factors for the Development of IslamicFinance 222Code of Conduct: Lawyers and Shari’ah Scholars 226Sheikh Muhammad Taqi Usmani Sukuk Pronouncement 228On Freely Circulating Fatawa 229101: On Wholesale and Retail 230Maqasid al Shari’ah and the Non-Muslim IslamicFinance Lawyer 232Seventeen Years On: The Woods for the Trees 233The Last Word 234

Chapter 10 The Equity Capital Market Man 237Rushdi SiddiquiBuilding Indices and Benchmarks for the GlobalIndustry 239Global Viability: Outperforming ConventionalIndices and Averting Enron 241Wherefore the Pulse?: Shari’ah-Compliant andShari’ah-Based Indices 244Gaps and Disconnects 248Major Disconnect: On Information 252The United States of America, Islam, and IslamicFinance 253The Halal Industry 256The Last Word 258

Chapter 11 More than the Sum of Its Parts: FortyYears of Islamic Finance 261Growth beyond Expectations 263My Shari’ah, Your Shari’ah: What Is SoAuthentically Islamic about This System? 266

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Acknowledgments

Whoever does an atom’s weight of good will see it,And whoever does an atom’s weight of evil will see it.

—Al Qur’an, Sura 99, Az Zalzalah, Verses 7–8

Many have helped make this book possible, and I would liketo thank all for any and every contribution. Please acceptmy sincerest apologies if I have missed anyone.

None of this would have been possible without the graces andblessings of Allah (swt), and I am very thankful for His infinite generosityand guidance.

My most special thank you to my most-loved and cherished friendswho have kept me sane for so many years. The most special thank youand my utmost debt of gratitude to Tatiana Tahir-Craven who, evenfrom Melbourne, Australia, provided me with much-needed supporton a daily basis. I speak nothing but the truth when I write that I couldnot have survived without her friendship. My love and thanks also toRashidah Brandeis in Singapore, Samija Serifa in Latvia, and AnnexAchieng in Italy. By extension, thank you Peter Craven, Paul Brandeis,Luigi Leotta, and all your bubbly brood—Sarah, Thara, Sonia, Lea,Umred, and Agostino.

My appreciation to Nick Wallwork, Jules Yap, Gemma Rosey andChris Gage at JohnWiley & Sons in Singapore and to Siti Kasim in Kuala

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Lumpur, who remembered me enough to introduce me to Nick somemoons ago.

For the work of transcribing dozens of hours’ worth of interviews,thank you especially Jason Gray in South Africa and Zaheer Thai Kandyin Dubai.

For suffering the reading of draft chapters, thank you especially to AlZaquan Amer Hamzah in Kuala Lumpur and Nagham Osman in Cairofor introducing me to Tanya Chan-Sam in the UK. Many thanks alsoto others who provided feedback and comments, including AmeenaAl Haddad and Juhaina Kasimali in Bahrain, Zuzanita Zakaria in theUnited States, and Nurini Kassim of Securities Commission Malaysia.To Cheryl-Ann Low in Singapore, thank you for your fresh eyes onthe pages.

Thank you to all at Thomson Reuters Islamic Finance Gateway forthe work that has taught me a lot, including Dr Sayd Farook, WiebkeBuelow, Blake Goud, Shaima Hasan, Ammar Radhi, Yusuf Radhi,Redha Al Ansari, Karim Arafa, Ameena Al Haddad (again), JuhainaKasimali (again), Dua’a Al Masqati, Noor Khamdan, Mazen Al Saleh,and Sameera Al Bulushi.

The interviews were made possible with the help of many peopleincluding Shiraz Gull and Ajmal Mehmood Awan of the Institute ofPolicy Studies in Islamabad, Pakistan; Ahmad Majid Lootah in Dubai;Edith Butcher of Dar Al-Maal Al-Islami in Switzerland; Sharaf Khawajaof Ithmaar Bank in Bahrain; Hassan Ibrahim, Dato’ Vaseehar Hassan,and Mohamed Mousa of Dallah AlBaraka Group in Saudi Arabia;Maznah Bahari and Ima Abu Bakar of Perdana Leadership Foundationin Kuala Lumpur; Wan Zaleha Radzi also in Kuala Lumpur; and SihamIsmail and Yazmin Aziz of IFSB in Kuala Lumpur.

Thank you very much to those who very generously gave of theirtime to entertain my questions and provide me with much back-ground information, including Dr Ibrahim Kamel; Professor RodneyWilson; Dr Yahia Abdul Rahman of LARIBA; Khalid Abdulla-Janahiof Dar Al-Maal Al-Islami; Daud Vicary Abdullah of INCEIF; ProfessorSimon Archer; Professor Hossein Askari; Rafiza Ghazali of Caga-mas; John Goodman of Ogilvy Noor; Abdulaziz Goni of ThomsonReuters; Dr Wafik Grais; Farrukh Habib then of INCEIF and nowof ISRA; Rafe Haneef of HSBC Amanah; Abdullah Haron then of

Acknowledgments







xiii

Acknowledgments







xiii

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xiv A C K N O W L E D G M E N T S

Lumpur, who remembered me enough to introduce me to Nick somemoons ago.

For the work of transcribing dozens of hours’ worth of interviews,thank you especially Jason Gray in South Africa and Zaheer Thai Kandyin Dubai.

For suffering the reading of draft chapters, thank you especially to AlZaquan Amer Hamzah in Kuala Lumpur and Nagham Osman in Cairofor introducing me to Tanya Chan-Sam in the UK. Many thanks alsoto others who provided feedback and comments, including AmeenaAl Haddad and Juhaina Kasimali in Bahrain, Zuzanita Zakaria in theUnited States, and Nurini Kassim of Securities Commission Malaysia.To Cheryl-Ann Low in Singapore, thank you for your fresh eyes onthe pages.

Thank you to all at Thomson Reuters Islamic Finance Gateway forthe work that has taught me a lot, including Dr Sayd Farook, WiebkeBuelow, Blake Goud, Shaima Hasan, Ammar Radhi, Yusuf Radhi,Redha Al Ansari, Karim Arafa, Ameena Al Haddad (again), JuhainaKasimali (again), Dua’a Al Masqati, Noor Khamdan, Mazen Al Saleh,and Sameera Al Bulushi.

The interviews were made possible with the help of many peopleincluding Shiraz Gull and Ajmal Mehmood Awan of the Institute ofPolicy Studies in Islamabad, Pakistan; Ahmad Majid Lootah in Dubai;Edith Butcher of Dar Al-Maal Al-Islami in Switzerland; Sharaf Khawajaof Ithmaar Bank in Bahrain; Hassan Ibrahim, Dato’ Vaseehar Hassan,and Mohamed Mousa of Dallah AlBaraka Group in Saudi Arabia;Maznah Bahari and Ima Abu Bakar of Perdana Leadership Foundationin Kuala Lumpur; Wan Zaleha Radzi also in Kuala Lumpur; and SihamIsmail and Yazmin Aziz of IFSB in Kuala Lumpur.

Thank you very much to those who very generously gave of theirtime to entertain my questions and provide me with much back-ground information, including Dr Ibrahim Kamel; Professor RodneyWilson; Dr Yahia Abdul Rahman of LARIBA; Khalid Abdulla-Janahiof Dar Al-Maal Al-Islami; Daud Vicary Abdullah of INCEIF; ProfessorSimon Archer; Professor Hossein Askari; Rafiza Ghazali of Caga-mas; John Goodman of Ogilvy Noor; Abdulaziz Goni of ThomsonReuters; Dr Wafik Grais; Farrukh Habib then of INCEIF and nowof ISRA; Rafe Haneef of HSBC Amanah; Abdullah Haron then of

Acknowledgments xv

IFSB; Dr Zamir Iqbal of the World Bank; Shelina Janmohamed ofOgilvy Noor; Sairana Mohd Saad; Jahanara Sajjad of Hawkamah inDubai; Sheikh Muddassir Siddiqi; Anthony Travis, and Dr Murat Unalof Funds@Work.

Last but most certainly not least, thank you to the individuals whovery graciously and generously gave of their time to sit through the inter-views with me. Encounters with them have been inspiring: ProfessorKhurshid Ahmad, Hajj Saeed Lootah, HRH Prince Mohamed Al FaisalAl Saud, Sheikh Saleh Abdullah Kamel, Tun Dr Mahathir Mohamad,Tan Sri Nor Mohamed Yakcop, Mustapha Hamat, Wan Rahim Kamil,Professor Abbas Mirakhor, Professor Rifaat Ahmed Abdel Karim,Sheikh Nizam Yaquby, Michael McMillen, and Rushdi Siddiqui.

15

Introduction

What is Islamic finance, and how is it different from “reg-ular” finance? Why is there a need for it, and how did itall start? Is it only for Muslims?

This book is not a technical book or textbook on Islamic finance;it will neither teach you the finer details of Islamic financial structuresnor present the minutiae of technical issues that challenge the Islamicfinance industry.

This book brings you the individuals who have built the industryfrom scratch, individuals who were there from the very beginning of thisnew industry, and individuals who have contributed to Islamic finance atthe global level. Within these pages you will encounter the motivationsbehind industry milestones and learn about the major challenges andissues affecting the modern Islamic finance industry since its birth inthe 1970s through the perspectives and very candid opinions of leadersresponsible for some of the industry’s most significant developments.

The modern Islamic banking and finance industry is widelyacknowledged to have its roots in the Mit Ghamr Savings Bank inEgypt, which opened its doors in 1963. The bank was established bythe late Dr. Ahmed Al Najjar, and operated more along the lines ofan interest-free cooperative credit union. Unfortunately Mit Ghamr

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xxii I N T R O D U C T I O N

Savings Bank was shuttered in 1967 due to various political reasons.Thereafter the first Islamic commercial bank opened in Dubai in 1975.From that first Islamic commercial bank to over 600 Islamic financialinstitutions in more than 50 countries today, the Islamic financialindustry continues to grow much faster than the conventional interest-based system, charging forward as it escaped relatively unscathed fromthe direct impact of the global financial crisis that started in 2007–2008.

But Islamic finance did not just magic into existence from the 1960s.To different degrees, Muslim communities have been influenced by andaligned their trade rules and financial transactions with shari’ah sincethe spread of Islam from its Meccan and Medinan epicentres in theseventh century. European colonization of Muslim lands punctuatedthe development of Islamic finance, and introduced the now all-pervasive banking model. It was only from the 1970s that we seean institutionalized financial system following shari’ah, albeit largelyin the “Western” banking and finance mould, that has grown tobecome international. Fuelled by Islamic revivalism and Middle Easternpetrodollars, the industry mushroomed following the establishment oftwo pan-Islamic initiatives: the Organisation of Islamic Conference in1969 and the Islamic Development Bank in 1975. This contemporaryindustry is the focus of this book.

From 2000 to 2011 global Islamic finance assets achieved a com-pounded growth rate of 27 percent, with the period 2000 to 2007recording a higher 30 percent. Growth slowed post 2008 due to theimpact of the global financial crisis on the real economy which in turnimpacted negatively on assets held by the Islamic finance industry.

Most Islamic finance assets today are based in the Middle East andNorth Africa, followed by Southeast Asia (primarily Malaysia). Butthese regions are not the only ones with Islamic finance activities.Additionally, not all Islamic finance practitioners, clients and customersare Muslims. InMalaysia, for example, more than half of Islamic bankingcustomers are non-Muslims, and there are many conventional financialinstitutions who now have Islamic businesses or who are involved withshari’ah-compliant finance, including Barclays, Citi, Deutsche Bank,HSBC, and Standard Chartered. While Muslims were Islamic finance’starget market in the 1970s and 1980s, the expansion of Islamic financefrom the 1990s pushed its appeal and use beyond the epicentres in the

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Introduction xxiii

Middle East and Malaysia. Following the 2008 global financial crisis theIslamic financial industry has increasingly been considered as a viable andsustainable alternative financial system. The challenge for the Islamicfinance industry today is how to move forward to widen its appealbased on differentiating itself from the conventional financial modeland offering its own unique products and services. In short, how doesIslamic finance co-exist with the dominant global financial system whileremaining distinct from it.

The prominent individuals considered in this book cover the broadrange of sectors within the Islamic finance industry: banking, capitalmarket, shari’ah, law, economics, policymaking, and international stan-dard setting. Each chapter leads with the work and contributionsof the leader and explores relevant issues while presenting insightsand perspectives on Islamic finance-related matters closest to eachindividual’s heart. All interviews were conducted face-to-face andin person except for two—the interviews with Professor KhurshidAhmad and Michael J. T. McMillen were conducted online due toscheduling difficulties.

The pages of this book expose unswerving hearts steeped in thebelief and conviction that the Islamic system is a strong and viablefinancial alternative. At the same time, they unreservedly address theindustry’s shortcomings. The leaders reveal what they consider to bethe Islamic finance industry’s achievements; perhaps more interestingly,they also reveal their own disappointments and misgivings about theindustry’s methods and current trajectory.

During the course of the writing of these chapters, drafts wereread by people working within the Islamic finance industry as well asthose completely unfamiliar with the subject matter. To the author,the more valuable reactions and feedback came from the latter group.The main challenge faced by the author has been, firstly, to faithfullyrepresent and relate the message of the merits and value of Islamicfinance sans gross hyperbole and overstatement. The other challengewas to make accessible financial and Islamic financial jargon and argotto a non-Islamic finance readership. It is the author’s sincerest hopethat these twin challenges have been met to some extent; in workingtowards these aims, the honest feedback from the non-Islamic financereaders has been invaluable.

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xxiv I N T R O D U C T I O N

Selection of Leaders

The ten leaders in this book stand on their own strengths and merits.In selecting people to be interviewed for this book, the overarching

aim was to include living individuals whose contributions to Islamicfinance have made a global impact and who have blazed new trails andbroken new ground for Islamic finance. To this end, the pioneers whobuilt the industry from scratch are easy to spot in any lineup—theseinclude Professor Khurshid Ahmad, Saeed bin Ahmed Al Lootah,His Royal Highness Prince Mohamed Al Faisal Al Saud, Saleh AbdullahKamel, and Tun Dr Mahathir Mohamad. While the leadership, calibre,and influence of most of the interviewees are undisputed, every personinvolved in and/or familiar with the Islamic finance industry has theirown views as to who or what a global leader in the Islamic financeindustry is or should be. The views of a cross-section of the industry theauthor reached out to were revealing—in some cases, criticisms andattacks ad hominemwere easily dismissed, but beyond this baseline almosteveryone had different candidates to propose. Perhaps reflective of theprogress and trajectory of the Islamic finance industry over the past fourdecades, this author learnt that you cannot please everyone and thatyou must press on towards a bigger picture with the knowledge that thefinal outcome would incur (no doubt impending) criticisms of manyan industry stalwart. The author hopes that others will continue whatthis book has started and continue to document industry milestones andperspectives of its leaders.

The chapters are organised according to the interviewee’s year offormal entry into the Islamic finance space. We start in Chapter 1 onthe Indian subcontinent, looking at the roots of Islamic revivalism thatinspired and influenced an entire generation of Muslims. From theupheavals of the Indian fight for independence and the Indian Muslim’sstruggle for a separate nation-state, we meet Islamic economist ProfessorKhurshid Ahmad, whose work and activism from the early 1970s led tothe watershed First Islamic Economics Conference in Mecca in 1976.

In the oil-rich Gulf, we hear in Chapter 2 from Hajj Saeed BinAhmed Al Lootah whose deep piety and leap of faith resulted in theworld’s first Islamic commercial bank in Dubai in 1975. Hajj Saeedreveals Dubai Islamic Bank’s difficulties growing up amid the emirate’s

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Introduction xxv

booming wider economic environment. In Chapter 3, we learn of thetravails of banks and industry building with the pioneering multinationalIslamic financial institution established by HRH Prince Mohamed AlFaisal Al Saud, whose vision, conviction, and international reach hasserved as a well of influence for the industry. Then in Chapter 4 wehear from another larger-than-life trailblazer, Sheikh Saleh AbdullahKamel, whose contributions and initiatives have set the foundation forthe global Islamic finance industry.

In Southeast Asia, Malaysia’s rise to global Islamic finance promi-nence is mapped in Chapter 5 by the country’s former prime ministerTun Dr Mahathir Mohamad, who led the country’s economic devel-opment for 22 years.

From the work of these pioneers who established the first academic,professional, and commercial institutions serving the Islamic financeindustry come the second generationwhohave strengthened the industryand pushed its boundaries beyond core Muslim markets. In Chapter 6,one of Islamic finance’s “intellectual godfathers,” former InternationalMonetary Fund executive director Professor Abbas Mirakhor, gives usdirect insight into the very essence and raison d’etre of Islamic finance.We see how, through his leadership and expertise, a vital bridge betweenIslamic economics and conventional economics was built. In the samevein, in Chapter 7, Professor Rifaat Ahmed Abdel Karim leads the wayin securing the stability and soundness of the global Islamic industrywhile pushing its integration with the global financial architecture.At the very core of shari’ah compliance we speak in Chapter 8 to oneof the industry’s most influential and prominent gatekeepers, shari’ahscholar Sheikh Nizam Yaquby. Working closely with Sheikh Nizamand other leading shari’ah scholars, leading expert and lawyer MichaelJ. T. McMillen, the topic of Chapter 9, has been responsible for some ofthe industry’s most significant innovative legal structures and financialtransactions, and he gives direct insight into the widespread use ofIslamic finance in the United States. Last but not least, in Chapter 10 wehear from Rushdi Siddiqui, whose leadership launched the Dow JonesIslamic Market Index in 1999, an industry game-changer. From him welearn the difficulties the Islamic finance industry faces with regard tostaying relevant to the man on the street while striving to achieve thehighest levels of global professional efficiency.

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xxvi I N T R O D U C T I O N

Pulling all the threads together, Chapter 11 presents an overviewof the main issues and concerns of the 40 years of the global Islamicfinance industry as discussed in the 10 chapters.

Revealing Thoughts

It is important to point out that the focus of the book is Islamic finance.Through the interviews with the leaders, the book presents the subject’smany facets and offers multiple perspectives on the world of Islamicfinance. During the interviews, some leaders chose to focus primarily ontheir own work; others were more comfortable offering their opinionson a broad range of issues. As a result, the chapters are not structuredin the same manner. This book is a collection of interviews that revealdifferent insights and opinions about Islamic finance and its developmentand growth over the past four decades. The author’s aim has been torecord each leader’s main concerns, flesh them out, and position theseconcerns within the bigger financial and socio-economic context.

The interviewees in the first five chapters paint their work andcontributions and the development of the Islamic finance industry inmuch broader brushstrokes than the next interviewees do. This couldperhaps be due to their need to distil their decades of experience downto a memorable essence. At the same time, it is reasonable to expectmost details to be lost from memory. In certain instances, some leaderschose to reveal more than others, but none was indecorous—readershoping for a tabloid tell-all volume will be disappointed.

Most in the industry prefer to focus on the bigger textures andneeds of Islamic finance than to count their own achievements. Butnot all shy away from the limelight. A leader or two asked theauthor why she had decided not to list awards and prizes won by theinterviewees. Any mention of awards or prizes in the book supports amuch larger theme or strand of argument; by and large, it is hoped thatthe achievements and influence of our ten leaders speak through theiractions, decisions, and thought leadership.

Lastly, readers will notice that some of our leaders are joined intheir chapters by others who have worked alongside them. Theseother individuals are featured where their voices and contributions arecontextually fitting.

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Introduction xxvii

Broad Overview of the Development of the Islamic Finance Industry, ShowingMilestones, Earliest Islamic Banks and Events/Institutions Mentioned in ThisBook

1950s • Start of the development of theoretical framework forIslamic economics and interest-free banking

1960s

Early interest-freeexperiments

• Mit Ghamr Savings Bank in Egypt 1963 to 1967• Tabung Haji established in Malaysia 1963• Organisation of Islamic Conference (OIC) established

1969

1970s

Kick start ofoperations

• 1st International Conference on Islamic Economics inMecca 1976

• Start of the operationalising phase for Islamic banks• Dubai Islamic Bank 1975• Islamic Development Bank (IDB) 1975• Faisal Islamic Bank Egypt and Sudan incorporated

1977• Kuwait Finance House 1977• International Association of Islamic Banks 1977• Jordan Islamic Bank 1978• Bahrain Islamic Bank 1979• First Islamic Banking Conference in Dubai 1979

1980s

Dominated by Islamicbanking

Second phase ofIslamic economics

• Advancement of Islamic financial products in bankingand funds management

• Islamic banks and investment houses open mainly inMiddle East and North Africa, and Southeast Asia

• Pakistan, Iran and Sudan start ‘Islamising’ theireconomies

• Dar Al-Maal Al-Islami 1981• Islamic Research and Training Institute (IRTI), part

of the IDB 1981• Malaysia’s first Islamic bank - Bank Islam 1984• Amana Income Fund in USA 1986• American Finance House LARIBA 1987• Al Baraka International Bank in United Kingdom

1982 (closed 1993)• Failure of Islamic money management companies in

Egypt

(Continued)

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xxviii I N T R O D U C T I O N

(Continued)

1990s

Rise of Islamic capitalmarket

Participation of globalplayers

• Shell MDS first sukuk in Malaysia 1990• Accounting and Auditing Organisation of Islamic

Financial Institutions (AAOIFI) in Bahrain 1991• Bank of Credit and Commerce International (BCCI)

scandal• Harvard Islamic Finance Project in USA 1995• Citi Islamic Investment Bank 1996• HSBC Amanah 1998• FTSE Islamic Index December 1998• Dow Jones Islamic Market Index launched early 1999

2000s

Infrastructure-buildinginstitutions

Sukuk market takesoff

• General Council for Islamic Banks and FinancialInstitutions (CIBAFI) in Bahrain 2001

• Islamic Financial Services Board (IFSB) in Malaysia2002

• International Islamic Financial Market in Bahrain 2002Industry shows itsmettle post globalfinancial crisis

• Malaysia’s first global sovereign sukuk 2002• Islamic Bank of Britain in United Kingdom 2004• World Bank issues its first sukuk 2004• INCEIF—The Global University for Islamic Finance

in Malaysia 2005• Sheikh Taqi Usmani 2007 sukuk pronouncement

2010s

Internationalisationand cross-borderfocus

• International Islamic Liquidity ManagementCorporation (IILM) in Malaysia 2010

• Goldman Sachs US$2 billion sukuk scandal 2011• Islamic Interbank Benchmark Rate (IIBR) 2011• IILM launches debut sukuk August 2013• Dubai Islamic Economy drive 2013

23

About the AuthorEmmy Abdul Alim is Editor for Thomson

Reuters Islamic Finance Gateway. Away from

Thomson Reuters, she has been writing

independently about Islamic finance since

2010. She has an MBA, Finance, from the

University of Aberdeen; a BA (Hons) in Arabic

and Islamic studies from the School of Oriental

and African Studies, University of London; and

a BA in English and European studies from

the National University of Singapore. Before

making the switch to editing and writing about

business and Islamic finance, Emmy worked

professionally in the performing arts, primarily

in her native Singapore. Since then she has

lived and worked in the United Kingdom, Egypt,

the Netherlands, and Malaysia.

24

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