Category: Islamic Finance

Afghanistan Currency
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Securing Stability & Success in Afghanistan’s Economy

Afghanistan Currency

As the largest commercial bank in Afghanistan, it may have also proven difficult for Azizi Bank to simultaneously ascertain the title of best commercial bank. Yet, that is exactly what this outstanding financial institution has done, and has rightfully been awarded that title of 2020’s Best Commercial Bank, Afghanistan in this quarter’s issue of Wealth & Finance International Magazine. Join us as we find out more about what the bank has to offer, what makes it so unique, and why it is deserving of this international recognition.

Azizi Bank is the largest commercial bank in Afghanistan, and it has been maintaining that position since its inception in 2006. Being the country’s largest banking group, there is a Pan-Afghanistan presence that stretches across more than thirty provinces and a headquartered office in Ankara Square in Kabul. The work of Azizi Bank started with the professional and entrepreneurial commitment of its founder, Mr Mirwais Azizi of the Azizi Hotak Group & Family and is presently under the leadership of a young and dynamic Chief Executive Officer Dr. Prof. Mohammad Salem Omaid. What makes Azizi Bank unique is the fact that its professional customer service and the sense of belonging that every client and customer has. Each and every employee carries with them this sense of welcoming and belonging, and strives to ensure that all interactions with customers are done so in a way that makes them feel like they are a part of the family feel that the bank presents. In addition to this, there is a wealth of digital innovation and product excellence on show here also. Azizi Bank has invested significant time, money, and manpower into ensuring that every product is designed to suit a client requirement, and this commitment distinguishes the bank to be the most distinctive and superior bank across Afghanistan.

For almost fifteen years, Azizi Bank has been managed under the governance of a very competent and effective Board of Supervisors, who brings a vast repertoire of knowledge and experience in their various fields, and are internationally acclaimed in their respective work. At the management level, there is a brilliant mix of youth and experience, which leads to both innovation and stability across the board. Today, Azizi Bank has more than fifteen hundred employees, and with a fifteen percent female work force, it is playing a quietly effective role in women’s emancipation and empowerment across Afghanistan. Aside from Azizi Bank, there are another eleven banks in the country, including two banks from Pakistan. The total banking deposit is approximately USD 3.2 billion, with all assets totalling approximately five billion USD.

As a country, Afghanistan has witnessed strong economic growth and developing in banking systems when compared to the previous two decades. Growth in the financial sector, specifically within the banking sector itself, was considerable. Thus, national income increased, and there was massive promotion in many of the other macroeconomic factors, including exchange rates, inflation, balance of payments, government revenues, investment, international trade, industrial production, and employment levels. Azizi Bank has always played a pivotal role towards each and every reform of the Central Bank of the country, and has marked itself out as a pioneering force of financial inclusion programs and branchless banking. Recently, in a bid to further bolster these initiatives, Azizi Bank has signed an MOU with the Afghan Postal Service to provide branchless banking through their more than four hundred and fifty post offices covering the country and some of its most remote locations.

The team at Azizi Bank is also made up of the bankers of choice for some of the major UN agencies, such as UNICEF, WHO, and WFP, who are present and working in Afghanistan. Azizi Bank is all about enabling these agencies to make their payments and disbursements to the far and rural areas of the country. Furthermore, this outstanding bank is the only bank in the country to have a mobile wallet solution, called AZIPAY, for all types of payments, including paying utility bills, education fees, groceries, and airline tickets. There is even excellence with the more comprehensive financial inclusion initiatives, with Azizi Bank having converted one of its subsidiary banks into a full-fledged Islamic Bank in the country. This is the first and only full services Islamic Bank in the country to date. With Afghanistan having more than 99% of its population being Muslims, such a change will definitely pave the way for more people coming into the banking fraternity, thereby improving the financial inclusion ratio of the country.

Since its inception, there have been several core founding values that have been the focal point of the bank and its championing of sustained financial growth in Afghanistan. Azizi Bank has always believed in innovations, and has never stepped back away from investing in innovative technological initiatives. The bank also has the best in class management board and senior management in the country, comprising of experienced bankers with an averages of more than two decades’ experience from the United States, India, Pakistan, Africa, and Europe. Azizi Bank has also always believed in the learning and development initiatives towards capacity building, and have built a comprehensive policy on the same. These structural reforms have brought in change within the bank to a large extent, and have always made it unique compared with other peer banks working in the country.

As has already been conveyed above, Azizi Bank prides itself on being a technology-driven back that makes full use of some of the latest technological innovations from across the world. With society moving towards more digitalization than ever before, the customer’s perceptions have changed on what they can access and want from their banking services. Afghanistan in particular is a country where more than half of population has a smart phone, and there is greater opportunity for banks to invest more into technology than ever before. Azizi Bank has foreseen this opportunity prior to its competitors and peers, and is now in a position where it can adapt to the ever-changing present and future. One of the ways in which the bank has taken the initiative and seized the day regarding innovative technology is by being a prominent voice on several developmental projects aimed at meeting financial customers’ expectation all across Afghanistan.

Providing technologically-savvy services banking services is the goal for many institutions, especially now that the world is moving towards an increasingly digital society. With the gradual transition towards advanced digital banking, there comes a greater need for traditional banks to keep up with modern systems and innovative ways of doing things. Azizi Bank has also initiated different tailor-made products for both deposits and advances meant for different levels of society, including accounts for children, students, women, senior citizens, retail businesses, small and medium enterprises, and entrepreneurs to name just a few. Despite the wealth of innovation on show at Azizi Bank, there have also been challenges presented by the COVID-19 pandemic.

The arrival of the pandemic meant that Afghanistan, which is a predominantly import-driven economy, witnessed a surge in the cost of commodities, thereby affected the normalcy of life and common people. Industries of all sectors and types were affected, and so was the fate of the financial sector as well. In essence, the economy and economic growth of the whole country took a massive hit. There has been some impact on Azizi Bank amidst the pandemic, which has sustained itself almost a year and still counting. With the initial lockdown in place for the first few months of 2020, business was seriously hampered, though there was no significant decline for deposits. Where Azizi Bank really was affected was new business. Overall trade finance and the recovery of loans has been another key area affected by the pandemic, although the Central Bank of Afghanistan did come out with a detailed recovery plan to aid the situation and get the country back on its feet as soon as possible.

Pandemic or otherwise, Azizi Bank did have a strategic business plan in place, as well as a disaster recovery plan considering the geography of operation. The bank is always prepared and ready to face any sort of adverse situation, including this current crisis. As a bank, Azizi Bank also took steps and made plans even before the government made any sort of official announcement in terms of business contingency, staff contingency, and operational contingency initiatives and operations. Azizi Bank took immediate steps to ensure total safety and stability for itself and its staff, even before the lockdown was announced. All mediums of communication were used to reach staff and the public, and the bank stopped all meetings, conferences, customer gatherings, and training. In the immediate aftermath of the announcements made by many world governments, including Afghanistan, Azizi Bank formed a committee to analyse and make plans to curve this emergency situation.

Safety precautions including complete sanitization, thermal meters, face masks and gloves, and more were initiated at all the branches for both customers and staff alike, whilst plans were also made to rotate the staff so as to avoid close proximities. Expatriate staff members were also encouraged to work from home where possible, thereby minimising the risk of transmission and infection. Armed with these various safety measures and initiatives, life will eventually return to normality for Azizi Bank. However, with the ongoing political uncertainty still prevailing and international donors reluctant to pump in additional funds, this latest COVID-19 scare will definitely affect the overall growth of the Afghanistan economy. Stability will take time, but Azizi Bank will see it through.

Outside of the financial work carried out by Azizi Bank, there is also a deep-rooted and ever-present commitment to charity work and community-based initiatives. Azizi Bank is the only banking institution in Afghanistan that has a sustained CSR Policy and Responsible Banking. For the team, they consider CSR as one of the most important aspects of growth, and the institution also supports the important cause of the government in terms of sustainability initiatives. Supporting society as a whole is equally important, and there are a great many ways in which Azizi Bank does this too. The bank’s involvement on CSR initiatives has made a great impact across society and for the brand of Azizi Bank.

In working on these initiatives, the bank has been quite active for the last five years on various initiatives across the country and has therefore received considerable amounts of appreciation from the government and wider society. From a community service perspective, Azizi Bank has supported multiple hospitals and homes in terms of providing medicines, essential utilities, infrastructure development, food materials, stationeries, and organising blood donation camps. The team at Azizi Bank have also focused their time on various environmentally sustainable and green initiatives. Working in this area, the bank has endeavoured to stand out by starting a green initiative that involved planting thousands of trees across Afghanistan. Alongside this, there are also campaigns on saving water and pollution control, two of the most prominent environmental sustainability issues faced by many all over the world.

Azizi Bank has recently partnered with the National Environmental Protection Agency (NEPA) of the government of Afghanistan, and this partnership will surely lead to collaborative work on various other initiatives aimed at increasing environmental sustainability. Finally, the last core area that Azizi Bank works in outside of its own four walls is that of community support. Azizi Bank has always sought to provide free training sessions to local college graduates and management students alike, with topics ranging from banking and finance, to the inner workings of an economy, and much more. Whilst this is a community support initiative aimed at giving finance students the best possible knowledge around, it also doubles as the perfect recruitment opportunity. Qualifications is one thing, but Azizi Bank also encourages fresh graduates to push their way to the forefront of the industry and make an impression with their dedication and commitment to understanding finance.

Ultimately, Azizi Bank is far more than just an exceptional institute of finance. Rather, it everything a country could possibly want from a bank that seeks to be innovative, be a unifying force that invests in the future, and delivers outstanding financial services to everyone in the country. Azizi Bank is constantly redefining its own success, and is fully deserving of this latest success from Wealth & Finance International Magazine as being recognized as 2020’s Best Commercial Bank in Afghanistan.

Few Words about the bank’s CEO – Dr. Prof. Mohammad Salem Omaid

A result oriented proficient starting his professional journey with Azizi Bank in 2006 as a Finance Officer and successfully ascending the steps to become the President and CEO. In his career span of more than 14 years, Dr. Omaid handled diverse roles having rich & extensive experience in Finance & Accounting, Corporate Accounts Trade Finance, Corporate Credit Financing, Operational Banking, Investment Banking and Retail Banking. Initiated several measures, Bank Products, Technological products aimed at promoting the bank and its objectives. Dr. Omaid’s contribution towards refining the banking structure in the country earned him appreciations & accolades not only from the Govt. & Public body within the country but also from the international agencies worldwide.

Dr. Omaid’s experience and knowledge for a sustainable growth earned him several international accreditations and he is also the only afghan conferred with the honorary professorship of Academics, Oxford. He is also the Member of the Europe Business Assembly, UK, The World Confederation of Businesses, USA and an active member of BAFT, USA. He is also associated with the ICC, Banking Commission, Afghanistan and is the Chairman of the Afghanistan Banks Association.

He is also the recipient of the Asian Banker “Young Banker” Award in 2017, being the only one from the Central Asian Region till date. In 2020, Dr. Omaid is conferred with the Professional Doctorate by the European International University, Paris for his endurance, commitment and leadership in shaping a bank in Afghanistan as per international standards.

A visionary leader and a highly respected citizen in the Islamic Republic of Afghanistan.

For more information, please contact Samrat Dutta at www.azizibank.af

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Smart Dubai Launches Guidelines on Ethical use of Artificial Intelligence

  • Smart Dubai outlines standards for AI systems to ensure they are fair, transparent and accountable
  • World’s first city-government endorsed Smart AI Ethics Self Assessment Tool launched to help assess level of ethics in AI systems
  • Initiative aims to accelerate Dubai’s goals of becoming an AI powered city of the future

Dubai’s quest to become the world’s smartest city has received a strong ethical grounding with the unveiling of guidelines for the use of Artificial Intelligence (AI). The new ‘Ethical AI Toolkit,’ which provides advice to individuals and organisations offering AI services, has been formulated by the Smart Dubai Office (Smart Dubai) – the government department that has a mandate to make Dubai the world’s happiest city through innovation.

 

Outlining the need for the new guidelines, Smart Dubai says that they will encourage organisations that deliver AI services to place a priority on fairness, transparency and accountability and that they will serve to elevate the city’s position as a thought leader in in the adoption of AI across government services and beyond.

 

“Our vision is for Dubai to excel in the use of technology to maximise human benefit and happiness, as well as to be a global technology standard-setter. Artificial Intelligence plays an integral role in all of this. And with the use of AI growing exponentially across the globe, the ethical dimension of this nascent but rapidly proliferating technology is an increasing topic of discussion on the international stage,” said Her Excellency Dr. Aisha bint Butti bin Bishr, Director General of the Smart Dubai Office.

 

“There is an understanding by governments, NGOs and the private sector that AI regulation is needed, but that the field is not yet mature enough to devise fixed rules to govern it. However, organisations still require guidance and regulators still need to begin to learn how to oversee this emerging technology, but without creating restrictions that could stifle innovation. Smart Dubai’s Ethical AI Toolkit aims to provide advice in this area for all those involved in the AI sector,” she added.

 

As part of the toolkit, Smart Dubai has also launched the world’s first city-government endorsed AI Ethics Self-Assessment Tool. The AI Ethics Self-Assessment Tool is built to enable AI developers and operators evaluate the ethical level of their AI system, if implemented using Smart Dubai’s AI Ethical Principles and Guidelines.

 

Smart Dubai’s Ethical AI Toolkit was created using a benchmarking exercise and a consultation approach. Government sector entities, such as the Telecommunications Regulatory Authority, Dubai Electronic Security Centre, Dubai Health Authority, the Roads and Transport Authority, Dubai Municipality, Dubai Electricity and Water Authority and Dubai Land Department, were consulted during the initial feedback gathering, as were private sector companies including Microsoft, IBM, Google, Etisalat and PWC.

 

Smart Dubai is actively encouraging ongoing critiquing from across the AI community in relation to the guidelines. This feedback, combined with Smart Dubai’s research, aims to help iterate the Ethical AI Toolkit so that its framework and guidance keeps pace with technological advancements. The office is also establishing an Advisory Board, comprising leading AI and ethics experts from the private and public sectors, who will review the guidelines and help make continuous ongoing improvements to them.

 

Smart Dubai says that it wants to start discussions between different stakeholders in Dubai around AI ethics and for all components in the city’s technology ecosystem to work together to achieve a unified approach and reach common agreement on becoming more responsible on the use and development of AI systems. The office highlighted that it would like to see the Ethical AI Toolkit evolve into a universal, practical and applicable framework that informs ethical requirements for AI design and use and one that offers tangible suggestions to help stakeholders adhere to the ethics principle.

 

“By fusing data and innovation we’re preparing Dubai to become the AI city of the future. Artificial Intelligence will streamline day-to-day work life by providing fast and easy access to a wealth of data-driven information. Its consequences will be far-reaching and will impact every area of life, so creating guidelines for AI operatives is essential to provide an ethical underpinning to this evolution. Our aim is to offer unified guidance that is continuously improved in collaboration with our communities, with the eventual goal being to reach widespread agreement and adoption of commonly-agreed policies to inform the ethical use of AI, not just in Dubai but around the world,” said His Excellency Younus Al Nasser, Assistant Director General, Smart Dubai and CEO, Smart Dubai Data.

 

Smart Dubai’s Ethical AI Toolkit addresses some of the key issues around establishing regulatory principles relating to AI. These include the rapid evolution of the AI landscape that is leading to a fragmented approach to ethics, with each company dealing with ethical issues in their own way. They also intend to clear the ambiguity around what constitutes ethics in AI, as it is thought that ambiguity could supress innovation through entities holding back on research because they are unsure of future government actions. The toolkit also aims to improve trust in AI systems, with confidence in them cemented by the public being able to see that companies are following the new advice that is published transparently online.

International Forum Gathers Powerhouses from the Global Islamic Finance Industry
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International Forum Gathers Powerhouses from the Global Islamic Finance Industry

Held under the patronage of the Government of the Republic of the Sudan, the Central Bank of Sudan and the Ministry of Finance & Economic Planning – and in strategic partnership with the Bank of Khartoum – IFIF 2016 hosted 200 dignitaries, central bank representatives, Ministers, C-level bankers, thought leaders and experts who gathered at the Al Salam Rotana Hotel in Khartoum to deliberate on strategies to enable Islamic finance gain prominence and spur economic growth across Africa.

Delivering keynote addresses to a packed audience were Fadi Al Faqih (CEO of Bank of Khartoum), Musaed Mohammed Ahmed (Head of Sudan’s Banks Union), H.E. Abdelrahman Hassan Abdelrahman Hashim (Governor of the Central Bank of Sudan), H.E. Badr El-Din Mahmoud Abbas (Minister of Finance and National Economy of the Republic of the Sudan) and H.E. Bakri Hassan Salih (First Vice President of the Republic of the Sudan).

The conveners of IFIF, Middle East Global Advisors – a renowned intelligence platform serving the Middle East North Africa Southeast Asia (MENASEA) region for 22 years – gathered a powerful line-up of speakers including Dr. Anindya Ghose, Professor at NYU Stern School of Business, who was named Business Week’s “Top 40 Professors Under 40 Worldwide”.

Dr. Ghose will speak on the impact of social media on banking and shared that:

“Industries and markets are being transformed by a growing shared technology infrastructure. Indeed, Africa is emerging as an inspiring hub of innovation for social media in the banking sector, enabling unbanked individuals in Africa to access risk averse financing through Islamic banking.”

Dr. Ghose continued:

“The International Forum on Islamic Finance (IFIF) is an outstanding platform to help build awareness of Africa’s digital media proposition in the context of Islamic finance’s push for financial inclusion across the continent.”

Another key highlight of Day 1 of IFIF was the exclusive launch of the much-awaited Sudan Islamic Finance report. The report was produced by the Islamic Research and Training Institute (IRTI) and the General Council for Islamic Banks and Financial Institutions (CIBAFI), in collaboration with the Bank of Khartoum. The ground-breaking report provides substantive due diligence on the opportunities for Islamic financial and non-financial services in Sudan.

The final day of IFIF 2016 continues on the 10th of February. To find out more about IFIF 2016 visit www.ifif2016.com. 

New Shari’ah-Compliant Fund to Finance Contender for World's Tallest Tower
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New Shari’ah-Compliant Fund to Finance Contender for World’s Tallest Tower

King & Spalding and its affiliated office in Riyadh, as primary fund counsel, advised Alinma Investment Company and Jeddah Economic Company (JEC) on the creation of a Shari’ah-compliant SAR8.4bn (US$2.23bn) fund
that will finance the completion of Jeddah Tower, which will be the world’s tallest tower, at over a kilometer high. The tower will include a Four Seasons Hotel, residences of different sizes and office spaces.

JEC is the developer and owner of the Jeddah Tower, now built to the 27th floor, as well as the 5.3 million-square-meter Jeddah Economic City project located in Obhur, just north of Jeddah on the Red Sea Coast of Saudi Arabia.

The new fund, named Alinma Jeddah Economic City Real Estate Fund, is a Shari’ah-compliant fund operating in accordance with the Capital Market Authority (CMA) and relevant laws and regulations of the Kingdom of Saudi Arabia with an objective to finance the completion of Jeddah Tower and the development of the first phase of Jeddah Economic City project.

Alinma Bank will provide financing to the fund of SAR 3.6 billion (US$1bn), which will be the largest real estate financing in Saudi Arabia in 2015. Alinma Investment will manage the fund and JEC will serve as the master developer of the project.

The King & Spalding team on the fund matter was led by partner Nabil Issa and included partner-elect James Stull and associate Sayf Shuqair.

 

 

Charles Russell Appoints Islamic Finance Expert
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Charles Russell Appoints Islamic Finance Expert

Law firm Charles Russell LLP has appointed Ashley Freeman to head up the Islamic Finance practice in the firm’s Financial Services team. Freeman, who joins the firm as Senior Counsel, has extensive global banking and financial services experience, encompassing strategic, transactional and regulatory matters in both Islamic and conventional industries.

Freeman has expert understanding of cross-border and comparative law issues; particularly the inter-play between common law, civil law and Shari’ah precepts. His arrival reinforces the breadth of Charles Russell’s financial services practice and the growing demand for Islamic finance expertise in the UK market.

Freeman’s expertise, developed through many years’ experience in-house at the Central Bank of Bahrain and in private practice with City of London firms, includes bank mergers, acquisitions, conversions, receiverships, restructurings and insolvencies. He has considerable transactional experience, including experience of asset-backed finance, project finance, acquisition finance, property finance, leasing finance and all Islamic financing techniques. Freeman also has excellent knowledge of equity and securities funding, securitisations, asset and fund management, insurance and takaful, financial trades, derivatives and payment systems.

Freeman has documented and directed the documenting of numerous multi-million dollar lending facilities and bond issues (including several sovereign issues) and other complex funding transactions. He will work closely with Jon Bond in the London office and Wesam Alshafei in the Bahrain office and will be instrumental in expanding the team’s capability.

Commenting on the appointment, Jon Bond, Head of the Financial Services sector at Charles Russell, said: “Ashley’s arrival is a testament to the firm’s focus and continued success in the Financial Services sector. Ashley brings significant experience in Islamic Finance, particularly in the UK and Middle East and this together with his broader banking experience will further enhance our offering to our clients. We are delighted to have him on board.’’

Dubai Islamic Bank partners with Emirates Group
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Dubai Islamic Bank partners with Emirates Group

Dubai Islamic Bank (DIB), the largest Islamic Bank in the UAE, has entered into an agreement for an innovative new service with the Emirates Group (Emirates). Through this service, DIB will receive and accept electronic salary certificates of Emirates employees. The Memorandum of Understanding (MoU) was signed between Raju Buddhiraju, Chief of Consumer Banking, DIB and Hussain Shaikh, Vice President – HR Employee Services, the Emirates Group at a ceremony held recently.

The innovative electronic letter solution will significantly streamline the process of applying for personal banking products at DIB by Emirates employees. This environmentally-friendly initiative will resolve the need for DIB to conduct employer verification checks, reducing turnaround time and speeding up the application approval process.

Commenting on the initiative, Raju Buddhiraju, Chief of Consumer Banking, DIB said: “As one of the most innovative banks in the UAE, we have worked to deliver a leading suite of financial services that are designed to help our customers securely and efficiently meet their banking needs. This focus on diversifying our services is an essential component of our growth strategy and as a result, we are delighted to introduce this offering as part of our continually evolving electronic banking platform that will further enhance our ability to better serve our customers.”

The e-letter service will be available to all Emirates employees who apply for DIB’s personal, auto and home finance products.

Bank of Korea Gains IFSB Membership
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Bank of Korea Gains IFSB Membership

 

The Council of the Islamic Financial Services Board (IFSB) has today resolved to admit Bank of Korea into the IFSB membership as an Associate Member.

The 24th meeting of the IFSB Council, hosted by Autoriti Monetari Brunei Darussalam (AMBD), was held on 27 March 2014 at the Empire Hotel and Country Club in Brunei Darussalam. It was chaired by the Managing Director, AMBD, H.E. Dato Mohd Rosli Sabtu and attended by 10 central bank governors and heads of regulatory and supervisory authorities, as well as 12 senior representatives from among the Council and Full members of the IFSB, representing 17 countries. The meeting was also attended by the President of the Islamic Development Bank.

The 184 members of the IFSB comprise 59 supervisory and regulatory authorities from the banking, capital markets and Islamic insurance (Takāful) sectors in 45 jurisdictions, as well as eight international inter-governmental organisations, and 117 market players (financial institutions, professional firms and industry associations).

The full list of the IFSB members is available on the IFSB website www.ifsb.org. The roles and responsibilities of the members (by category) are detailed in the IFSB Articles of Agreement that can be downloaded from the website.

The Meeting of the Council was followed by the 12th IFSB General Assembly and the 9th Islamic Financial
Stability Forum.