Islamic tourism: The next big thing?

tour fam

Joan Henderson

DEMAND for leisure travel by Muslims is mounting in parallel with the expanding Muslim population worldwide. The phrase Islamic tourism is frequently used to describe travel by Muslims for whom compliance with religious observances when away from home is an important consideration. Among other labels are halal tourism and Muslim-friendly tourism.

Muslim travellers have several unique features. Their distinctiveness creates challenges for suppliers of services as well as destination marketers in ensuring proper provision while balancing the needs of Muslim and non-Muslim customers. At the same time, there is diversity within the overall market, based on factors such as age and nationality alongside religiosity.

Commercial interest in Muslim consumers as a whole reflects the size, growth and increasing affluence of the population. According to Pew Research, there were an estimated 1.6 billion Muslims globally in 2010 and this figure is predicted to reach 2.8 billion in 2050, about 30 per cent of the world total. Over 60 per cent reside in the Asia-Pacific region, 20 per cent in the Middle East and North Africa (where they make up 93 per cent of the resident population), 3 per cent in Europe and 1 per cent in North America.

Demand for leisure travel by Muslims is mounting in parallel with the expanding Muslim population worldwide. The phrase Islamic tourism is frequently used to describe travel by Muslims for whom compliance with religious observances when away from home is an important consideration. Among other labels are halal tourism and Muslim-friendly tourism.

Muslim travellers have several unique features. Their distinctiveness creates challenges for suppliers of services as well as destination marketers in ensuring proper provision while balancing the needs of Muslim and non-Muslim customers. At the same time, there is diversity within the overall market, based on factors such as age and nationality alongside religiosity.

Commercial interest in Muslim consumers as a whole reflects the size, growth and increasing affluence of the population. According to Pew Research, there were an estimated 1.6 billion Muslims globally in 2010 and this figure is predicted to reach 2.8 billion in 2050, about 30 per cent of the world total. Over 60 per cent reside in the Asia-Pacific region, 20 per cent in the Middle East and North Africa (where they make up 93 per cent of the resident population), 3 per cent in Europe and 1 per cent in North America.

tour stat

The accommodation sector is a provider of food and other services essential to the tourist experience. Greater attention is now being given to the notion of halal hotels, characterised by prayer facilities, halal food, a ban on alcohol and gender segregation for certain amenities. The term “syariah-compliant” is sometimes applied and is accurate for properties in conservative Muslim countries such as Saudi Arabia, which are already bound by syariah law, whereas Dubai in the United Arab Emirates is less restrictive.

Hotels in popular tourist regions of predominantly Muslim countries, such as those of North Africa and parts of Indonesia and Malaysia, which rely heavily on non-Muslim foreign guests, are also more relaxed. It is probably unrealistic because of reasons of finance and practicality for most hotels outside the Islamic world to seek full syariah compliance, but recent surveys show that Middle Eastern and Asian Muslims are keen to visit new long-haul destinations.

Muslims travelling for purposes of business must also be taken into account. Hoteliers should therefore be familiar with Muslim needs and address concerns about food and prayers as far as possible. This can be achieved by ensuring that menus are suitable, copies of the Quran are placed in hotel rooms and information about places of worship is readily available.

The rest of the tourism industry is also responding to rising demand from Muslims as reported by growth strategy research and advisory firm DinarStandard. The number of specialist travel agents and tour operators, some based in Western countries, is expanding and mainstream companies, such as Kuoni, are exploring opportunities. Appropriate facilities are being introduced at airports, railway stations and attraction sites and more airlines are serving halal menus. A dedicated halal kitchen was opened at London’s Heathrow in 2014 as part of a larger new facility serving international airlines at one of the world’s busiest airports.

The importance of Islamic tourism is appreciated by many national tourism organisations around the world. Promotional websites such as those of Japan, Korea and Hong Kong offer guides to halal dining and the Tourism Authority of Thailand launched a special app last year. Malaysia is positioning itself as a global hub for the production of halal goods and services, incorporating tourism, with an official Islamic Tourism Centre responsible for market development. However, the Malaysian and other authorities must also advertise and cater to non-Muslim tourists and there are possibilities of friction between the expectations and desired experiences of the two groups which have to be managed.

Singapore has a competitive advantage over some rivals due to its Muslim community, supporting infrastructure of religious-related facilities and services, and halal certification programmes. MasterCard and CrescentRating’s 2016 Global Muslim Travel Index ranked it the most Muslim-friendly destination for tourists outside of Islamic countries.

Islamic tourism, of which halal food is a critical component, is a striking phenomenon yielding valuable opportunities for the tourism industry worldwide and not least in Singapore. To realise these opportunities, tourism businesses must understand the requirements of Muslim tourists and take the necessary measures to satisfy them without inconveniencing non-Muslim customers. It is also necessary to communicate effectively with Muslim markets.

Joan Henderson is an associate professor of marketing and international business, and fellow at the Institute on Asian Consumer Insight at Nanyang Business School, Nanyang Technological University.

The Straits Times

Mon, 16 May 2016

Tour Ind


Sultan of Brunei questions delay in Syariah law enforcement


HIS Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah, the Sultan and Yang Di-Pertuan of Brunei Darussalam, yesterday ordered authorities to explain the two-year delay in the phased enforcement of Syariah Penal Code Order.

The monarch said the Syariah law has remained “stagnant” without any progress after being actively pursued for a brief period following the launch of the Order in 2014.

Delivering his titah during a meeting with the Brunei Islamic Religious Council (MUIB) at the Legislative Council (LegCo) building, His Majesty questioned how many of the Syariah law provisions have been enforced.

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“How long has passed since it was launched and gazetted until now? It has already been two years but it is still at the stage where only general offences are dealt with.

“What about the other phases? When will they be implemented? I expect the ministry concerned might respond by saying that the Syariah Penal Code could not be fully enforced at this stage because the CPC (Syariah Courts Criminal Procedure Code) has not been finalised,” the Sultan added.

The CPC outlines the rules for conducting criminal proceedings, from the investigation to prosecution.

His Majesty said authorities might respond by saying they are still waiting for the Attorney General’s Chambers (AGC) to finalise the vetting of the draft documents.

“My next question is when will the draft law be sent to the AGC? Their response might be that it was already sent in 2014,” His Majesty said.

The Sultan went on to say that if this was the case, it is most regrettable because two years have passed and yet the CPC has not been completed.

“How thick is the draft? The AGC might tell us there are many other legal documents that need to be urgently dealt with too. The vetting of the CPC will only be able to be finalised in June 2016, after it has stalled for two years,” the monarch said.

His Majesty said this is an “unacceptable excuse”.

“It is as if people will be under the impression that the Syariah Penal Code is worthless as a law mechanism. Where is the Minister of Religious Affairs? And where is the Attorney General? Why have they not come forward to remedy this unsatisfactory situation?” the Sultan questioned.

The first phase of the Syariah Penal Code was enforced on May 1, 2014. His Majesty added that before the second phase can be implemented, the country has to wait for another 12 months after the CPC can be gazetted.

“Now two years have gone by, but the CPC is not gazetted yet and the vetting process has not even started. This means that after it is gazetted in 2016, we have to wait another year, until 2017 before the second phase can be implemented.”

He said it will be 2018 by the time the third phase of the Syariah law can be enforced.

“So when will the penal code be ready to be fully implemented? Is it true to say that the officers responsible in vetting the draft legislation could not do so as a matter of urgency? Is it just a matter of vetting or did they intentionally refuse to vet?” His Majesty questioned.

The monarch asked why had the religious affairs minister and attorney general failed to keep tabs on how the work was being done by their officers.

“May I remind all that we did not formulate the law out of whims and fancies but we do it solely for the sake of Allah, not in pursuit of glamour. Working for Allah must be done earnestly,” His Majesty said.

Religious education

His Majesty also raised concerns on the direction and future of Arabic education in the country.

Arabic schools are established to bring forth those who are competent in religious knowledge, with the objective of eventually getting Islamic scholars or ulama. With this in mind, Arabic schools must prioritise religious subjects such as Arabic language, fiqh, tauhid, Quran, hadith and tafsir, he said.

He added that this must be done without ignoring the importance of subjects such as Malay language, English language and Mathematics.

Everything went well since the inception, but Arabic schools introduced the science stream from the 1980s, making it compulsory to take Physics, Biology, Chemistry and Additional Mathematics – subjects that are available in mainstream schools under the Ministry of Education, he said.

This meant that students who took the science subjects are required to reduce the number of religious subjects so that it will not be too burdensome, and thus science subjects came to gain more prominence than religious subjects, he continued.

Science stream classes at Arabic Schools currently only offer classes up to O-levels. After completing their O-levels, the students would have to transfer to mainstream schools if they wish to pursue the sciences.

“At that point, they are no longer considered students of Arabic schools and they completely stop studying religious subjects after their O-levels,” he said.

The monarch said there is a need to review the impact of introducing the sciences in Arabic schools when it was implemented in the 1980s.

“Unfortunately, no such research has been done, we do not know the implications whether good and bad of introducing Science stream classes back in the 1980s,” he said.

The Arabic religious education system is experiencing major changes with the implementation of the National Education System for the 21st Century (SPN21).

Under the education system, Arabic school students will be able to master both religious and Science stream subjects. Year 11 students at Arabic secondary schools will have to sit for two major examinations, including the O-levels for their mainstream subjects and the Brunei Islamic Studies Certificate (SPUB) for their religious curriculum.

In Year Nine, the students will be divided into three streams based on their results: 1) fast track Science stream for students who obtained excellent results; 2) normal track Science stream for students who obtained ‘very good’ results; and 3) Arabic stream for students who obtained ‘good’ results and below.

The Sultan said the grading of the three streams reflects that the Arabic stream is of third class level, not on par with the other two categories.

They are also required to study all subjects for their SPUB and O-level examinations simultaneously, possibly doubling the number of subjects that need to be taken in mainstream schools, he added.

“Wouldn’t such a system make it burdensome for Arabic school students and difficult for teachers to teach and complete the syllabus with that many subjects?”

He added that this can cause students to choose the Science stream over the Arabic stream.

The monarch said it is generally known that religious education subjects are more difficult and taxing compared to the other subjects, a factor that can push students away from Arabic classes in favour of the sciences.

“All these need to be deliberated on as thoroughly as possible to save and popularise religious subjects so that they will be seen as a good choice, more attractive and more appealing than non-religious subjects, not a means to open an opportunity for them to get away or escape from.

“This is a matter of much concern to me – the future direction of Arabic schools. Are their roles fading into irrelevancy or diverting towards another direction. All these call for a thorough reassessment to turn back to its original course. Let it not be changed,” he added.

Islamic propagation

The monarch said da’wah (dissemination of Islamic teachings) in the country is still weak and needs to be strengthened amid uncertain times and social ills affecting the country.

Among the issues raised were the number of propagators at the Islamic Da’wah Centre and whether they were properly trained.

“In addition to having many propagators, we want the da’wah delivered to be effective. Effective da’wah is successful da’wah,” he said.

His Majesty pointed out that one important medium of the da’wah is through the mimbar. The mimbar is a pulpit where the imam delivers the sermon in mosques.

“It is vital to deliver effective messages in the sermons. That is why all aspects must be taken into account, starting from preparation, content, writing, policy guidelines and lastly, the individual who will deliver the sermon,” he said.

His Majesty said it is important to practise discretion in deciding the content of the sermon, adding that the content must be appropriate.

He gave an example of an incident where SEA Games become the topic of a sermon. “The khatib (sermon readers) called upon congregants and Muslims to flock to the stadium to witness the events that would take place. We might say that sports is not something Islamically impermissible, but for a khatib to persuade and herd people to the stadium, in my opinion, is something that needs to be given thorough deliberation.

“Have we exhausted all topics and there is no other more important issue other than the SEA Games? This is what discretion is in the choice of topic along with the need to adhere to policy guidelines on sermons,” he added.

The Sultan said khatibs need guidelines on the correct way of delivering the sermon.

“Some readers are too tense and some were repetitive in their presentation. Is this what is expected of them by the Mosque Affairs Department? Where are the mosque affairs officers? Have they not come across incidents like these,” he asked.

Official visits and functions

His Majesty went on to say that it is not necessary for both the Minister of Religious Affairs and his deputy to make visits together as one should stay at the ministry and attend to pressing matters, such as the need to formulate policies for schools and the Islamic Da’wah Centre.

“The minister and his deputy minister should not simply enjoy making visits upon visits, for instance to schools, mosques and elsewhere. In doing so, both of them pay a visit to the same place and enjoy media coverage,” His Majesty said.

The monarch also said there is no need for all senior government officials to attend official functions that were held either in the day or at night.

“It is alright to make a visit and hold a function, but if the events are becoming too many and frequent, what about office work and worse, if too many attend them – the minister, his deputy minister and a horde of other officers! Is it not more reasonable for one of them to make the visit while the other stays behind?

“Is it not true that there are a lot of more pressing matters that need to be dealt with and given serious thought in the office?

He said other pressing matters include formulating policies for schools, Islamic Da’wah Centre, mosques, zakat (tithes), following up on the development of new converts, maintenance and upkeep of Muslim cemeteries and burial grounds, as well as halal certification.

Following the meeting, His Majesty visited the Ministry of Religious Affairs, which houses several units under the Islamic Religious Council before making a stop at the Islamic Da’wah Centre.

The Brunei Times

Sunday, February 28, 2016

bru penal codes

Indonesia prays for Islamic banking boom


Sam Reeves


INDONESIAN teacher Nina Ramadhaniah hopes for “blessings from Allah” by opening a sharia bank account — the sort of pious customer the world’s most-populous Muslim-majority country is praying for as it launches an Islamic finance drive.

Indonesia, Southeast Asia’s biggest economy, has a Muslim population of around 225 million but this huge number of faithful has not translated into success for sharia banks, institutions required to do business in line with Islamic principles.

Now regulators have launched a plan aimed at growing the sector, which currently accounts for less than five percent of banking assets, compared to a quarter in neighbouring, more developed Muslim-majority Malaysia and around half in Saudi Arabia.

Authorities believe it is a good moment, with many Indonesians getting wealthier after years of strong economic growth and an increasing trend towards piety across broad sections of society.

Many of those without bank accounts, estimated at about 40 percent of the population, are soon expected to open one.

“The situation is an opportunity for the Islamic banking business to get bigger,” said Nasirwan Ilyas, a senior official from the Islamic banking division of the Financial Services Authority (OJK).

The OJK is spearheading the drive, and unveiled a five-year roadmap earlier this year that included plans to educate the public about sharia lenders and the establishment of an Islamic finance committee to better manage the sector.

‘Interest is haram’

Key features of sharia banking include the prohibition of interest on loans or customer deposits, and a ban on investing in “non-Islamic” businesses, such as those involving pork or alcohol.

For teacher Ramadhaniah, who has an account with Indonesia’s biggest Islamic lender, Bank Syariah Mandiri, the ban on interest is a key attraction.

“Charging interest is haram (against Islam), ill-gotten gains that will not bring me any blessings from Allah,” the 44-year-old told AFP. “I don’t want to live in sin.”

Sharia accounts often work on a “profit-and-loss sharing” model, meaning customers get a windfall when the bank does well but can lose out when it does badly.

There are obvious disadvantages. Sharia lenders generally offer lower returns on investments and their modest size often means they provide fewer services than larger, conventional peers — many shops are not equipped to accept their debit cards.

Nevertheless, Islamic banks have proven popular in recent years, with the sector expanding on average more than 40 percent a year between 2008 and 2012, according to the OJK.

The growth came after laws were changed to make it easier to establish an Islamic bank, and there are now a plethora of standalone sharia lenders, Islamic banking units attached to conventional banks, and smaller Islamic financial institutions in the countryside.

Growth in the sector has lost steam due to a broader slowdown in the economy, which is expanding at six-year lows — giving authorities another reason to launch their drive.

Islamic mega-bank

Central to the overhaul is a plan to set up a National Islamic Finance Committee this year, to oversee the sector by bringing together representatives from different government agencies and act as a contact point for potential foreign investors.

Currently responsibility for the sector is spread around different bodies, such as the OJK, the central bank and the finance ministry, according to the OJK’s Ilyas.

It is modelled after similar bodies in other countries, such as the International Islamic Financial Centre in Malaysia, where the sector is already far more developed as the government started supporting it some years ago.

In addition to the OJK roadmap, the government has announced plans to merge the Islamic banking subsidiaries of four state-owned banks to create an Islamic mega-bank, which should be able to provide better services than the current Islamic lenders.

While observers have broadly welcomed the plans, they concede that many difficulties remain.

Khalid Howladar, Moody’s global head of Islamic finance, said it would be “quite a challenge” to grow the sector to a substantial level.

“The market is growing faster than conventional but from a very low base,” he said, adding Islamic banks in Indonesia did not offer “substantive competition” to their non-sharia peers.

But for Ramadhaniah and a growing army of devout Indonesians with new-found spending power, Islamic banks remain the only choice.

“I really don’t care that I’m not earning anything or getting lower returns on my investments,” she said. “I can live in peace.”

AFP/Busines Insider

Sunday, Sep. 27, 2015

bank muamalat

Islamic tourism draws more visitors to Indonesia

Islam_Tourism Ind_AFPOlivia Rondonuwu

Monday, February 23, 2015

JUST a short hop from the Indonesian holiday hotspot of Bali, a Saudi tourist and his family listen to the call to prayer as the sun goes down on Lombok, the self-styled “island of 1,000 mosques”.

Lombok is at the centre of an Islamic tourism drive in Indonesia, which has the world’s biggest Muslim population and is hoping to boost the number of visitors from wealthy Middle Eastern countries.

While aiming to continue to attract Western tourists who flock to its pristine beaches, the island is also seeking to promote its Islamic heritage, from numerous places of worship to shrines dedicated to ancient Muslim preachers.

“I love it here because I can hear the azan (call to prayer) and people go to the mosque to pray,” said 58-year-old Sulaiman, the Saudi tourist, who gave only one name and was accompanied by his wife who was wearing the burqa.

Senggigi beach in Lombok, Indonesia.

Senggigi beach in Lombok, Indonesia.

Indonesia is the world’s biggest archipelago nation, made up of more than 17,000 islands, but has long lagged behind smaller, more developed countries in Southeast Asia, such as Malaysia and Thailand, in attracting more tourists.

Foreign visitor arrivals to Indonesia rose to 8.8 million in 2013, according to official figures, compared with 25.72 million in Malaysia and 26.55 million in Thailand.

While there are no official figures for syariah tourism in Indonesia, the sector is experiencing strong growth internationally.

In a recent report, Muslim-oriented business group CrescentRating, predicted the sector would be worth US$192 billion ($261 billion) a year globally by 2020, up from US$140 billion in 2013.

“The economic growth of Middle Eastern countries is very good and we see an opportunity there,” senior tourism ministry official Rizki Handayani told AFP.

Only around 190,000 Middle Eastern visitors came to Indonesia in 2013, according to official figures, but authorities hope their Islamic tourism drive can increase numbers.

Senggigi beach

Senggigi beach

The government has produced tourist guides promoting Indonesia as a “Muslim friendly destination”. It highlights the country’s best syariah tourism destinations and notes there are more than 600,000 mosques in the archipelago.

Lombok, long overshadowed by its better known neighbour, Hindu-majority Bali, hopes the drive can help raise its profile.

Authorities are planning to build a huge Islamic centre that will contain a mosque, a hotel and a study centre, and specially trained tour guides will point Muslim visitors in the direction of the nearest mosque at prayer time.

Other parts of Indonesia are hoping to benefit from the initiative. Aceh province, in western Indonesia and the only part of the country to enforce Islamic syariah laws, and the capital Jakarta are both seeking to lure Middle Eastern tourists, who often bring many family members with them and spend lavishly.

Riyanto Sofyan owns a chain of nine sharia hotels across Indonesia, including two in Jakarta.

Alcohol-free cocktails are available, the call to prayer is played five times a day through the buildings, MTV has been removed from the list of TV channels available in the rooms, as it is deemed too risque, and hotel staff gently turn away unmarried couples.

In Lombok, hotels are also promoting themselves as Islamic, with nine so far having gained coveted syariah certification. Echoing the system of stars for conventional hotels, syariah accommodation is labelled with the crescent moon, a symbol associated with Islam, with the best receiving three.

A hotel must have signs pointing towards Mekah and copies of the Quran in its rooms, as well as a kitchen where halal food can be prepared, to gain its first crescent moon.

Despite the optimism of officials, there are concerns that the push for Islamic tourism could put off other visitors who want to sunbathe in skimpy outfits and relax on the beach with a drink.

But the local government insists it can promote syariah tourism without affecting the existing industry, and that party hotspots in the area – such as tiny Gili Trawangan island, off the west coast of Lombok – will remain unaffected.

Authorities are considering clearly demarcating areas more suited to Muslim guests, where Western tourists should cover up.

“We will make zones so that travel agents and guides have clear options depending on their guests’ wishes,” said local tourism chief M Nasir, adding that visitors were already told they should not wear skimpy clothing when they head into cities or visit religious sites.

Nevertheless for some Muslims, the clash of cultures may still be off-putting. While Sulaiman, who comes from Mekah, was enjoying his holiday in Senggigi, the main tourist strip on Lombok, some aspects made him feel uneasy.

“I am not comfortable with a tourist place where there are people wearing things that are too revealing,” he said.

The Brunei Times/AFP
Monday, February 23, 2015


‘Use caution with Islamic financial institutions’: Professor

finance-talk-poster-1Nabilah Haris

CONSUMERS should be careful and knowledgeable when dealing with financial institutions even though they are Islamic in name, said a scholar from Universiti Islam Sultan Sharif Ali.

Professor Dr Mahmood Mohamed Sanusi, a professor from the Faculty of Business and Management Sciences at the Islamic university, gave the advice during a talk entitled “Does the Islamic Financial Institutions Customer Need Consumer Protection?”

“The protection of consumers is an important matter that should be taken seriously,” said Professor Dr Mahmood, adding that the practices of some Islamic financial institutions should be taken into consideration. The situation is not unique to Brunei, he said, but throughout the region.

Professor Dr Mahmood Mohamed Sanusi

Professor Dr Mahmood Mohamed Sanusi

He said that while various aspects of financial institutions, including Islamic ones, are questionable, the financial products they offer should provide some insight into whether their practices are Syariah compliant.

Claims that their practices are according to fatwas should not satisfy the consumer and may only be a form of marketing to draw consumers into practices that may lack Syariah compliance.

“The contract which spells out the relationship between the consumer and the bank will show how genuine their business is,” said Professor Dr Mahmood, adding that defects with some Islamic banks are in their legal documentation whereby they “do not distribute justice between parties”.

He said legal documentation must be Syariah compliant so that the terms of the contract and the price will be fair and equitable to consumers.

During the course of the talk, he also shared complaints from both Malaysia and Brunei that involved consumers having to deal with issues of Islamic financial institutions in civil courts.

In conclusion, Professor Dr Mahmood said Syariah scholars face a major challenge of having the Islamic financial industry accept that not all forms of conventional instruments such as options, futures and derivatives can be made Syariah compliant despite being practiced in the financial market.

“Once conformity to the Syariah is achieved, the legality of an Islamic bank’s financial products will not be a contentious issue nor be doubted by Muslims,” he said.

The talk was held yesterday at UNISSA’s Jubilee Hall.

Professor Dr Mahmood has published works in reputable academic journals, including the International Journal of Financial Services, Arab Law Quarterly, Journal of Money Laundering Control (Cambridge University) and IIUM Law Journal.

The Brunei Times
Sunday, February 1, 2015

Indonesia revises Islamic banking rules as industry growth slides

ibBernardo Vizcaino and Gayatri Suroyo

INDONESIA’s regulator has issued revised Islamic banking rules covering asset quality and capital adequacy to help clarify market practices, while industry growth has now dropped to single-digits.

Authorities want to encourage a wider product range to help Islamic banks grab a bigger share of the Indonesian market, a sector which remains behind more mature markets in Malaysia and the Middle East.

Indonesia’s financial services authority, Otoritas Jasa Keuangan (OJK), announced the move on Wednesday as part of a package of 20 new rules, which range from corporate governance to microfinance.

Indonesia has the world’s biggest Muslim population but its Islamic finance market only holds a 4.5 percent of total banking assets in the country as of September, the latest central bank data showed.

Authorities want Islamic banks to hold at least 15 percent of the market by 2023, but the sector’s growth is stalling.

As of September, there were 11 full-fledged Islamic banks and 23 Islamic business units in Indonesia with combined assets of 244 trillion rupiah ($20.1 billion), representing a 7.2 percent growth year-on-year.

This remains above the 3.7 percent growth of conventional banks, although the OJK had projected Islamic banking assets would grow by 14.4 percent in 2014 under a moderate scenario, down from 24.2 percent in 2013 and 34.1 percent in 2012.


ib regUnder the revised rules, Islamic banks must hold increasing levels of capital depending on their risk profile, with regulators outlining four such categories.

The previous capital adequacy requirement for Islamic banks was 8 percent, while the highest risk profile would require such banks to hold as much as 14 percent.

This requirements applies only to full-fledged Islamic banks and not to the Islamic units of conventional banks.

The rules also detail the types of capital-boosting debt that Islamic banks can issue, which must include a loss absorption feature that allows regulators to convert such debt into equity if a lender faces insolvency.

Asset quality requirements address profit-sharing financing such as mudaraba and musharaka, common equity-like contracts used in Islamic finance.

Banks must include the proposed profit sharing ratio in the contract, which must be calculated based on a feasibility analysis of a customer’s business and cash flows.

The rules also address issues such as the separation of Islamic units from conventional parents and guidance for conventional firms that want to become sharia-compliant ones.

Last week, the OJK signed an agreement with the country’s national sharia board to strengthen oversight of the Islamic finance industry, supporting a centralised approach being favoured elsewhere around the globe. (1 US dollar = 12,165.0000 rupiah)

Thu, Nov 20, 2014

bi ojk

Kelantan considers guillotine as punishment for offenders


A SMALLER form of the guillotine, similar to that reportedly used to behead French King Louis XVI and his queen, Marie Antoinette, during the height of the French Revolution in 1793, is set to emerge in Kelantan.

The opposition PAS-led state’s hudud law technical committee, said to be facing problems finding suitable methods to amputate limbs of those convicted of stealing, is considering a “mini” form of the guillotine as an option.

Its Chairman, Datuk Mohd Amar Abdullah, said he would suggest to the panel to use such a contraption, which would not need a surgeon to operate.

Mohd Amar, who is Kelantan Deputy Mentri Besar, said despite the negative reactions to getting surgeons to amputate the limbs of offenders, the committee was still mulling the idea.

kelantan map“The surgeon must first agree to carry out the procedure but he is likely to face the wrath of the Malaysian Medical Association for violating the Hippocratic Oath.

The oath to uphold professional and ethical standards is historically taken by physicians and their assistants.

Mohd Amar said the guillotine was fast, effective and needed only one person to pull the lever, two others to hold down the offender and a doctor to ensure the punished person does not drastically suffer from the punishment. The judge who meted out the sentence must also be present.

“I will make extensive studies on the method used during the French Revolution in the 18th century when guillotines were used to sever the heads of those sentenced to death,” he added.

Ironically, France’s guillotine was introduced to end the preceding centuries of inhumane torture of criminals and eliminate the severity of pain endured under capital punishment.

The device based on a falling heavy blade is named after Dr Joseph Ignace Guillotine, who did not invent it but lobbied extensively for its use.

The first execution using a guillotine took place at Place de Greve in Paris on convicted armed robber Jacques Nicolas Pelletier in 1792.

The last person to be beheaded by a guillotine was convicted killer Hamida Djandoubi in 1977. The Tunisian was found guilty of killing his former lover, Elisabeth Bousquet. France abolished the death penalty in 1981.

Mohd Amar said probable methods to mete out punishment including chopping off of limbs of offenders under Syariah Criminal Code II 1993, were discussed in a meeting chaired by Kota Baru MP Datuk Takiyuddin Hassan.

He said among those who attended the meeting were eight muftis and several doctors, adding that he did not attend as he was performing his pilgrimage in Mecca then.

“I plan to attend the next meeting and propose the mini guillotine idea for detailed discussions,” he said.

Kelantan intends to table two private member’s Bills in Parliament for hudud laws to be implemented and enforced in the state next year.

The first is to provide wider powers to Syariah court judges to hear and mete out sentences under the Syariah Penal Code, while the second is to allow federal departments, like the police and the prisons department, to be used by the state government to enforce its hudud laws.

Currently, under Article 76A of the Federal Constitution, crimes such as stealing, robbing, causing hurt, rape and murder come under the Penal Code.

In an immediate reaction, Kelantan Malaysian Chinese Association (MCA) deputy chairman Tan Ken Ten described the plan to introduce the mini guillotine as ridiculous.

“I do not know what else they will come up with after this. They are becoming creative with ideas and making it up while they go along with their plans to enforce hudud in the state,” he said.

“The whole episode sounds like a joke. By resorting to an 18th century device to carry out capital punishments, they will become the laughing stock of the world,” added Tan.

The Star/ANN/The Brunei Times
Monday, November 17, 2014

kelantan gatet