ISLAMIC FINANCE AND

OPPORTUNITIES

SHAYA’A OTHMANSenior Academic Fellow

International Institute of Islamic Thought [IIIT] Vienna USAEast & South East Asia Regional Office. Kuala Lumpur Malaysia

SUMMARY OF THE KEYNOTE ADDRESS AT THE GENERAL SESSION OF THE CONFERENCE

ON THE OPENING DAY, OCTOBER 15, 2015

ISLAMIC FINANCE[An Important Component of Shariah Commercial Laws]

Interest or 'riba' is one of the biggest sin and the only sin that Allah declares war on those involve in taking or giving or providing services in 'riba', as clearly stated in the Last Testament, the Holy Quran in Surah 2:279.

Free of Interest and

Free of Speculation

STRATEGIC CONSIDERATION

It is expected that ROI in Islamic Bank is slightly lower than the Conventional Bank. This is because Islamic Bank has Social

Obligations to fulfil as mentioned in Maqasid Al Shariah

TOTAL ASSETS UNDER MANAGEMENT OF ISLAMIC ISTITUTIONS WORLDWIDE [2014]

1%Global Asset2014

Great Potential for Growth

MALAYSIA was the first to establish

Islamic Financial System by introducing

Islamic Financial Institutions known as:

as:

• Lembaga Tabung Haji [TH]. A

Haj Fund. in 1963,

• Bank Islam Malaysia in 1983.

Today TH has grown into an Islamic Financial Power House in Malaysia with Group asset [2013]

RM 49.5 billion or USD 16.5 billion,

Lembaga Tabung Haji Malaysia[Haj Fund Board] [TH]

USD2. 4

trillion

USD3.2

trillion

2014 2016 2020

USD 1.6

trillion

2012

TOTAL ASSETS UNDER MANAGEMENT OF ISLAMIC INSTITUTIONS WORLDWIDE [ Projected 2020]

1%Global Asset

SHAYA’A OTHMAN. Senior Academic FellowInternational Institute of Islamic Thought [IIIT].Vienna USA

Keynote address at 3Rd International Regional Development Conference [Oct 15, 2015] University of Bingol, Turkey

80%

15%

Global issuance has grown significantly since 2006. It reached US$120 billion in 2013, bringing the outstanding Sukuk to US$270 billion by end-2013, representing ¼ percent of global bond markets

SUKUK

0.25% of Global

Bond Market

SUKUK ISSUSANCE BY REGION [DEC 2014]

68%Southeast Asia

29%Middle East

55%Malaysian Ringgit

30%USD

SUKUK ISSUSANCE BY CURRENCY[DEC 2014]

SUKUK

DOMESTIC

INTERNATIONAL

MUSLIM NATIONS

GREAT POTENTIAL FOR DEVELOPMENT

TAKAFUL• 10%

• 320 billion

SUKUK• 20%

• 640 billion

BANKING• 65%

• 2.1 trillion

PROJECTED OUTLOOK OF ISLAMIC FINANCE IN 2020 BASED ON PAST GROWTH RATE

SHAYA’A OTHMAN. Senior Academic FellowInternational Institute of Islamic Thought [IIIT].Vienna USA

Keynote address at 3Rd International Regional Development Conference [Oct 15, 2015] University of Bingol, Turkey

TAKAFUL• 10%

• 1 trillion

SUKUK• 20%

• 2 trillion

BANKING• 65%

• 6.5 trillion

PROJECTED OUTLOOK OF ISLAMIC FINANCE IN 2020 BASED ON

STRATEGIC OPTIONS

USD10

trillion

2020

SHAYA’A OTHMAN. Senior Academic FellowInternational Institute of Islamic Thought [IIIT].Vienna USA

Keynote address at 3Rd International Regional Development Conference [Oct 15, 2015] University of Bingol, Turkey

ISLAMIC FINANCE CREATES OTHER OPPORTUNITIES

ISLAMIC FINANCIAL

INDUSTRIES

ISLAMIC FINANCIAL

EDUCATION AT UNIVERSITIES

ISLAMIC FINANCIAL

EXECUTIVES [ MANAGERS &

ADIVISORS]

MUSLIMS SME AND

ENTERPRANUERS

SHAYA’A OTHMAN. Senior Academic FellowInternational Institute of Islamic Thought [IIIT].Vienna USA

Keynote address at 3Rd International Regional Development Conference [Oct 15, 2015] University of Bingol, Turkey

MUSLIM NATIONS

GREAT POTENTIAL FOR DEVELOPMENT

TURKEY IN THE WEST

AND

MALAYSIAIN THE EAST

NON MUSLIM NATIONS ARE WORKING TOWARD MAKING THEIR CITIES AS REGIONAL ISLAMIC FININCIAL CENTERS

ALTERNATIVE STRATEGIC OPTIONSISTANBUL AS ISLAMIC FINANCIAL CENTER IN THE WEST &

KUALA LUMPUR AS ISLAMIC FINANCIAL CENTER IN THE EAST

REFERENCES

Islamic Finance : Opportunities, Challenges and Policy Options [April 2015], International Monetary Fund

Islamic Finance Outlook [January 2014]. Standard & Poor’s Rating Service, McGraw Hill Financial

Mahmoud Muhieldin [ MARCH 2012], Realizing The Potential of Islamic Finance. Economic Premise. Poverty Reduction and Economic Management Network , The World Bank

World Islamic Banking Competitiveness Report 2013-14 [2013] Ernst & Young

Islamic Finance Bulletin [February 2013], Gulf One Lancaster Centre for Economic Research, Lancaster University Management School

Laporan Tahunan 2013 embaga Tabung Haji Malaysia [2014], Lembaga Tabung Haji Malaysia

Shaya’a Othman [2011] Islamic Management: Maqasid Al Shariah in Islamic Finance. Published by Insaniah University College Kedah, Malaysia

Shaya’a Othman [Dec 2014] Islamic Management in Finance http://islamicstrategymanagement.blogspot.com.tr/ Retrieved November 8 , 2015

October 14, 2015 Arrival at University of Bingol, TurkeyAt the office of Prof. Dr. Gryasettlin BAYDAS, Rector of University of Bingol

Present were Prof Dato Dr Abdul Halim TAMURI [Rector of KUIS], Prof Dr Norain OTHMAN [UiTM], Dr. Imran [University of Bongol], and Mr Muhammad Jinna [UWHL]from Singapore.

At the Guest House of University of Bingol, where we were staying from 14 Oct till 17 Oct, 2015.

Informal Dinner Hosted By Rector of University of Bingol. 14 Oct 2015

15 October 2015 after the conference being officiated by Deputy Prime Minster of Turkey

Speakers consisting of Prof Eprahim NIMNI, Ali Recepi NAZLI . Nahit BINGOL, Prof Wichael FULLEN and Prof Shaya’a OTHMAN. It was chaired by Prof Yilmaz BINGOL.

Receiving Certificates from Governor of Bingol Region, Turkey . October 15, 2015

16 October 2015, Closing Ceremony by Chairman of Conference Prof Dr. Ibrahim TURKGLU

PROFESSORS WITH DIFFERENCES OF THINKING BUT MOVING FORWARD TO SHARE KNOWLEDGE AND EXPERIENCES FOR BETTEREMENT OF MANKIND

MEETING OF MINDS,AGREED TO DISAGREED

BUT MOVING FORWARD TO

DELIVER THE MESSAGE OF ISLAM FOR PEACE AND

HARMONY FOR BETTEREMENT OF MANKIND

October 17, 2015. Before living for Istanbul at the Campus of University of Bingol, [Established in 2007]. Presently about 15,000 full time students [Bachelor to Master and PhD]