Some time ago I read that there was some investigation occurring into the provision of Islamic finance in Australia.
Today, the Trade Minister, Simon Crean, launched a booklet published by the Australian government called Islamic Finance. It has been produced by Austrade (part of the Department of Foreign Affairs and Trade).
The media release says "The booklet Islamic Finance provides a detailed explanation of the opportunities that booming Shariah-compliant investment and banking offers Australia's financial services sector." In the booklet, the 'opportunities' for the expansion of Islamic finance in Australia are explored - including attracting more international banks and Islamic banks to Australia to provide the finance, Australian banks providing shariah-compliant finance, funds managers doing Islamic finance etc etc.... (Page 6)
The booklet then looks at a wide range of trade areas in Australia and ways they could 'benefit' from or use shariah or Islamic finance!
Also held today was the launch of Westpac's Special Interbank Placement for Islamic institutions to enable shariah-compliant finance.
This is a really important development in Australia - to provide specific financial services for the Islamic community.
In assessing what Islamic finance really is, I was explaining to someone that for a general loan, it meant that the client actually paid a higher price for, say, a house purchased - and then paid back the higher amount to the bank - but it isn't called 'interest'!
The booklet explains ONE of the Islamic finance services like this (a number are listed on P 8):
Murabaha: A form of asset financing where an Islamic Finance Institution (IFI) purchases an asset and then sells it to its client at a higher price (ie mark-up sale) with deferred payment terms. The interest that would ordinarily be paid by the client in a conventional loan – and which would constitute the bank’s profit — is replaced by the difference between the purchase price and the sale price;
Mmmm! It's all words, it seems!
Who wrote the booklet? The booklet says "The Australian Trade Commission (Austrade) wishes to acknowledge the substantial input to this report made by John Masters and PricewaterhouseCoopers. Austrade sought comments from a peer review group that consisted of relevant government agencies and industry associations and from Islamic finance experts."
Simon Crean's Media Release: Landmark Islamic finance publication
12 February 2010 - Media release
Trade Minister Simon Crean today launched the Australian Government's first-ever comprehensive publication on Islamic finance.
The booklet Islamic Finance provides a detailed explanation of the opportunities that booming Shariah-compliant investment and banking offers Australia's financial services sector.
Crean pushes for Islamic banking - Special Broadcasting Service - 12 Feb 2010.
Westpac to embrace Islamic finance market - Business Spectator - 12 Feb 2010
Westpac To Offer Islamic Finance Product - Australia Trade Minister Wall Street Journal Westpac dips into Islamic finance Sydney Morning Herald
UAE bolsters Islamic Financial products to Australia thru second leg of Trade ... Al-Bawaba - Feb 9, 2010.