I wonder how they get around charging interest.....do they incorporate it into the purchase price....anyone know?
Sharia-compliant finance is increasingly popular
TAVIA GRANT From Monday's Globe and Mail May 7, 2007 at 3:23 AM EDT
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It's an unlikely image: staffers at the Office of the Superintendent of Financial Institutions - surely one of Ottawa's driest regimes - are busy brushing up on the fine points of sharia law these days to cope with the anticipated expansion of Islamic financial services in Canada.
"Lately we have had more expressions of interest," said Normand Bergevin, managing director at OSFI's approvals and precedents division.
Several people on his staff are learning about business plans, legal structures, accounting methods, types of governance and other issues related to Islamic finance.
"It's fairly new to us," he said. "There's not a whole lot of experience here in terms of supervising or even understanding the different types of products. They all have little twists on them that make them very unlike anything we've ever seen before."
They're likely to see a lot more. Islamic finance is becoming one of the hottest areas in banking and insurance in the world as the Muslim population grows and wealth increases.
Sharia-compliant products must meet three criteria: no explicit interest is paid; the transactions can't be in such areas such as gambling, alcohol, pork or pornography; and the transaction can't be deemed as a gambling contract, or one that assumes a high level of risk. Products tend to be for both Muslims and non-Muslims alike.
Assets in the sector have hit more than $250-billion (U.S.) worldwide while the number of Islamic financial institutions has jumped to more than 300 from just one in 1975, the British Treasury estimates.
It's prompted global financial companies such as Citibank NA, HSBC Holdings PLC, Barclays PLC and American International Group Inc. to start offering Islamic financing products. Governments are getting interested too: Britain said last month it's looking into issuing sharia-compliant bonds as London aims to become the world centre for Islamic finance.
Canada is part of the wave. Several Canadian financial institutions are preparing sharia-compliant mortgages, insurance, taxi licensing and investment funds to help serve the country's fastest-growing part of the population. Foreign institutional investors are also keen on entering the Canadian market.
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Sharia-compliant finance is increasingly popular
TAVIA GRANT From Monday's Globe and Mail May 7, 2007 at 3:23 AM EDT
Article Link
It's an unlikely image: staffers at the Office of the Superintendent of Financial Institutions - surely one of Ottawa's driest regimes - are busy brushing up on the fine points of sharia law these days to cope with the anticipated expansion of Islamic financial services in Canada.
"Lately we have had more expressions of interest," said Normand Bergevin, managing director at OSFI's approvals and precedents division.
Several people on his staff are learning about business plans, legal structures, accounting methods, types of governance and other issues related to Islamic finance.
"It's fairly new to us," he said. "There's not a whole lot of experience here in terms of supervising or even understanding the different types of products. They all have little twists on them that make them very unlike anything we've ever seen before."
They're likely to see a lot more. Islamic finance is becoming one of the hottest areas in banking and insurance in the world as the Muslim population grows and wealth increases.
Sharia-compliant products must meet three criteria: no explicit interest is paid; the transactions can't be in such areas such as gambling, alcohol, pork or pornography; and the transaction can't be deemed as a gambling contract, or one that assumes a high level of risk. Products tend to be for both Muslims and non-Muslims alike.
Assets in the sector have hit more than $250-billion (U.S.) worldwide while the number of Islamic financial institutions has jumped to more than 300 from just one in 1975, the British Treasury estimates.
It's prompted global financial companies such as Citibank NA, HSBC Holdings PLC, Barclays PLC and American International Group Inc. to start offering Islamic financing products. Governments are getting interested too: Britain said last month it's looking into issuing sharia-compliant bonds as London aims to become the world centre for Islamic finance.
Canada is part of the wave. Several Canadian financial institutions are preparing sharia-compliant mortgages, insurance, taxi licensing and investment funds to help serve the country's fastest-growing part of the population. Foreign institutional investors are also keen on entering the Canadian market.
More on link
