Halal Economy

The global perspective

Tuesday, June 25, 2019

National Bank of Fujairah structures Shari’a-compliant bullion financing solution for Malabar Gold & Diamonds

FUJAIRAH:Malabar Gold & Diamonds, one among the BIG 5 jewellery retailers globally with a strong retail network of over 195 retail outlets spread across nine countries has accomplished a Shari’a-compliant bullion financing solution with the assistance and expertise of National Bank of Fujairah who structured the Shari’a-compliant bullion financing solution.

The gold standard sets out the Shari’a rules for trading and transacting in the metal whereby the latter joins equities, real estate, Islamic bonds (sukuk) and takaful (insurance) as vehicles approved for Islamic finance. The standard lays out a clear guidance on the permissibility to trade in gold and makes it possible for Islamic investors to deploy to grow their wealth, diversify their portfolios, and protect them against market risks in a shari’a compliant manner. It also enables Islamic finance institutions to develop new gold-based products and transactions. Since the standard’s launch, gold has shown a great potential to outperform other major Islamic asset classes in the long-run.

Working closely with Amanie Advisors and Shari’a Board, NBF has developed a unique Shari’a compliant bullion financing solution to cater to the complex needs of its customers thus cementing its position as a key financing partner for the precious metals industry.

Vince Cook, NBF’s CEO, said: “We are delighted that we have been at the forefront of this major transaction in the gold and jewellery market. The transaction reflects our continued commitment to delivering innovative products and quality service to our customers in the precious metals industry. This transaction underscores NBF’s focus to develop the Shari’a-compliant banking sector and cement our NBF Islamic team’s capabilities to lead the development of new products. We would like to congratulate and appreciate the support from our customer and partners Malabar Gold & Diamonds, Amanie Advisors and World Gold Council in supporting our efforts to develop this transaction.”

Abdul Salam K P, Group Executive Director of Malabar Group added, “As we look at expanding our presence across the GCC and establishing ourselves further as a prominent regional jewellery retailer, we also have a role to play in the development of the sector as a whole. NBF has proved to be a reliable partner, who has been with us throughout our journey. We appreciate their professionalism and expertise in the gold industry and Shari’a compliant products, which has helped us achieve this milestone. We are happy to be part of the inaugural Shari’a-compliant gold financing transaction in the UAE, which will go a long way in supporting the precious metals sector by accessing the Shari’a compliant banking products that represent almost 20% of the UAE banking sector.”

Maya Marissa Malek, Managing Director of Amanie Advisors LLC said: “We applaud NBF and Malabar Gold & Diamonds for taking the lead in introducing and transacting the first AAOIFI-compliant Islamic gold financing transaction, which is a niche segment in the Islamic banking space. NBF has amassed valuable expertise in gold-based transactions over the years in the conventional space and we are very pleased indeed to see this expertise being applied in its Islamic window offerings as well. The AAOIFI Shari’a Standard on Gold, in collaboration with the World Gold Council, comprehensively covers all potential types of gold-based transactions, giving due consideration to practical applications in the global gold market. After understanding all the range of interactions, the standard covers, one can only imagine what possibilities lie ahead for the development of gold-based Shari’a-compliant financial products in the future.”

Malabar Gold & Diamonds is the flagship company of Malabar Group, a leading diversified Indian business conglomerate.

Established in 1993 in the Indian state of Kerala, Malabar Gold & Diamonds today has a strong retail network of over 195 outlets spread across nine countries, 13 wholesale units in addition to offices, design centers and factories spread across India, Middle East & Far East. With an annual turnover of $4.5 billion, the company currently ranks among the BIG 5 jewellery retailers globally.

With 11 cluster manufacturing units in India and GCC – the company currently has 9 jewellery brands to cater to the discerning needs of customers. With headquarters in Kerala and branches across India, Middle East & Far East, Malabar Group is best known for its activities in the field of gold, diamonds, silver and lifestyle articles.