Businesses within the Sultanate of Oman are set to be offered, for the first time, a unique Shariah compliant working capital finance product from Maisarah Islamic Banking Services of Bank Dhofar.
The Bank has worked with the international Shariah advisory firm, IFAAS, (Islamic Finance Advisory & Assurance Services) to develop an innovative new financing product based on the Islamic finance principle of Mudaraba (profit-sharing), which is in accordance with Shariah Standards issued by industry body, AAOIFI.
News of the launch comes as IFAAS celebrates winning international recognition for the product. On 26th November 2013, at the Global Islamic Economy Summit in Dubai, it was selected as winner of the ‘Islamic Finance Industry Development Challenge’ category of the inaugural ‘Ethical Finance Innovation Challenge & Awards’, created by Thomson Reuters and Abu Dhabi Islamic Bank . As winner, the product also received Shariah approval from the Shariah Supervisory Board of Abu Dhabi Islamic Bank .
Sohail Niazi, Chief Islamic Banking Officer at Maisarah, BankDhofar, said, “We will be proud being the first bank to launch this award-winning product after getting all necessary approvals. This product has already received such an international acclaim and recognition and we believe it will further add value to our business and corporate banking customers. Maisarah’s strategy is centered around being the best in Oman by offering excellent and innovative products and services to its customers and working with IFAAS has been a key element of this strategy.”
Following the launch of the product, business clients of Maisarah will be able to manage their day-to-day cash flow and working capital needs in a Shariah compliant way. The facility will be available to established large and medium size corporates and will enable them to avoid using short-term, interest-based financing products.
IFAAS Director Shariah Compliance & Product Development, Shaher Abbas explains how the new product also offers potential to the wider Islamic finance industry, “Maisarah’s working capital finance product, designed by IFAAS, is based on Mudaraba (profit-sharing), the most authentic Islamic finance principle. However, until now it was underutilised because of specific inherent risks. We have successfully mitigated those risks though new control measures, which are in strict accordance with AAOIFI Shariah Standards.
The beauty of IFAAS’ innovative, and award-winning, product is that the new control measures can also be applied to Musharaka (profit & loss sharing) and Wakala (agency) agreements with minor amendments. This will offer new opportunities to Islamic banks, enabling them develop their product range in a simple and practical way.”
Product development is one of the key services that IFAAS offers to its international client base and to date has developed more than 100 Islamic financial products. Other services offered by IFAAS include Shariah compliance & audit, regulatory reviews, training, and feasibility studies. As a key player in the Islamic financial industry, IFAAS has also published a number of ground-breaking market reports for several countries. The company operates from offices in the UK, France and Bahrain.
IFAAS (Islamic Finance Advisory & Assurance Services) is an independent specialist consultancy with offices in Birmingham (UK), Paris (France) and Manama (Bahrain), providing professional advisory services to a wide range of financial institutions and industry stakeholders in the critical and complex area of Shariah compliance. Founded in 2007, IFAAS is at the forefront of the dynamic Islamic Finance industry and has rapidly grown into a leading provider of a wide range of specialist and bespoke Shariah advisory services to some of the leading financial institutions and key stakeholders in the UK, Europe, Middle East, Africa and the Americas. IFAAS’ principle services include Shariah audit and compliance, advisory on product development and operational implementation, marketing strategy, PR & communications, market research and feasibility studies and providing specialized professional training in Islamic finance.
*This press release was published on 18 December 2013 by Zawya.com. Read the original article here.