A recent study has forecast that the value of assets of Islamic finance industry wjll grow by 80% to reach $3.24 trillion over the next 5 years. The study conducted by Dubai Islamic Economy Development Center in partnership with Thomson Reuters, found that while Islamic finance is expected to grow to reach $3.2 trillion by 2020, Islamic banking would constitute $2.6 trillion of this figure. In 2014, Islamic finance assets had an estimated value of $1.8 trillion, with Islamic banking representing 74% of total Shariah-compliant assets, followed by 16% in outstanding sukuk. According to the report, the total number of Islamic financial institutions operating globally has reached 1143, divided between 436 Islamic banks/windows, 308 takaful institutions and 399 other Islamic financial institutions, such as financing and investment companies. Most Islamic finance assets are held by Saudi Arabia, Iran, Malaysia and the UAE.
DBS bank exits Islamic banking
Singapore’s DBS Group is winding down its Islamic banking unit. The bank says the unit has not been able to achieve economies of scale. A spokesperson for the bank said the process of winding down the unit will likely take two to three years. The unit, IB Asia, which had been named Best Islamic Bank in Singapore by Islamic Finance News, offers wealth management services to high networth customers, treasury, corporate advisory and capital market services. The statement said after much consideration, the board of directors of IB Asia has unanimously agreed to progressively wind down Ithe unit. It added that as a separate legal entity, IB Asia is unable to achieve economies of scale. The move is subject to obtaining approval from its shareholders and receiving regulatory approvals. DBS had set up IB Asia in 2007, investing US$250 million in Singapore’s first Islamic bank. It was joined by 22 co-investors from prominent families and industrial groups from Gulf Cooperation Council countries, such as Qatar, Saudi Arabia and the United Arab Emirates. Each of these shareholders owns less than 5% of IB Asia. The bank clarified that it will continue to develop and distribute sya-riah-compliant products, such as Islamic bonds or sukuk, within the bank’s main operations.
Islamic banking product from TCS
Tata Consultancy Services has launched a new version of BaNCS for Islamic banking to support Shariah-compliant deposits and financing products for Islamic banks globally. TCS BaNCS is a new pre-configured solution and its commodity trading and inventory module helps in the management and servicing of deposits and financing products. The financing component now supports 7 additional new structures, including Islamic Overdraft, Construction Financing and Forward Ijarah. Additionally, existing product structures that are based on Murabahah, Istisna, Ijarah, Musharakah, Mudharabah, and Salam have also been enhanced. TCS will handle inventory, sales and purchase-related transactions to support trading under Murabahah, Commodity Murabahah, Salam, and Ijarah.