Basel Iii: Impact and Challenges to Islamic Financial Institutions: Evidence of Pakistan and Malaysia

The global financial crises 2007 bring about the current banking regulations which stood inadequate to avoid banks from taking in unnecessary risk actions. Therefore, Bank for International Settlement (BIS) and G-20 leaders endorsed a new international standard of banking regulations by revising previous Basel II rule, introduced in 2004, into Basel III in late 2010, so as to enhance the quality including quantity of capital, leverage ratio and liquidity standards, which has become a challenge for nationals to implement these strict reforms under their existing banking system. Parallel with the conventional banking system, for which the Basel Committee formulated Basel framework, Islamic banking introduced in early 1977 to 1980 in Pakistan in response to the decision by the Shariat Bench of Supreme Court, necessitates that the financial system be transformed to operate in conformity with sharia. The State Bank of Pakistan (SBP) and Bank Negara Malaysia are the regulator of Islamic banks and full member of IFSB. The Islamic Financial Services Board (IFSB) established in 2002 in Malaysia as an international standard-setting organization to enforce the international regulatory and supervisory guidelines for Islamic financial organizations along with other standard setting bodies such as AAOIFI and ISDB to achieve this objective. The IFSB promotes the stability and soundness of the Islamic financial institutions by issuing guiding standards and prudential regulations for the industry, The IFSB applied Basel standards in the context of Islamic banks and its operating models. This paper critically evaluates Islamic financial institution’s regulatory and supervisory structures particularly for Pakistan and Malaysia and examines financial position after implementing Basel Accord rules. Study suggests a positive impact in case of both countries.

Optimization of Protein Level in Supplementary Feeds for Fish Rearign under Semi-Intensive Composite Poind Culture Systems

Growth of five commercially important fishes (Labeo rohita, Catla catla, Cirrhina mrigala, Ctenopharyngodon idella and Hypophthalmichthys molitrix) was compared after 365 days in semi-intensive composite pond culture systems, treated with six levels of supplementary protein diets and a control. Triplicate group of earthen ponds were fertilized with poultry droppings on the basis of its nitrogen contents at the rate of 0.17g N/100g of wet fish weight daily. Six iso-caloric feeds (3 mm pellets) with varying protein levels i.e. 22, 24, 26, 28, 30 and 32% were supplemented to the fish at the rate of 2% of fish wet weight on daily basis and designated as T1, T2, T3, T4, T5, T6, respectively whereas T7 was taken as control and the fish in these ponds were not offered supplementary feed. Growth was measured fortnightly as increase in average wet weight, fork and total length, condition factor, length-weight relationships and nitrogen conversion ratio (NCR); with their average values being calculated on monthly basis. At final harvest, the proximate compositions of fish meat samples were analyzed. The physico-chemistry of pond’s water were studied on fortnightly basis and percentage contribution of variables towards dry weight of planktonic biomass and increase in fish yield were also estimated with step-wise regression. All five fish species showed significant variability in their growth performance due to various digestible protein levels in their supplementary diets. Amongst the five fish species, Ctenopharyngodon idella came out as an exceptional growth performer exhibiting significantly higher final average weight, fork and total length gains of 793.32±196.95g, 357.94±39.51mm and 397.87±40.03mm, respectively, followed by Cirrhina mrigala, Labeo rohita, Hypophthalmichthys molitrix and Catla catla grown under composite semi-intensive pond culture conditions. Net fish yield increased as the level of digestible protein in the supplementary diets increased and plateaued at 28% DP level, thereafter fish weight decreased significantly as the level of digestible protein in supplementary diets was further increased. Among the six supplementary feeding regimes, 28% DP level (T4) gave the maximum net fish yield of 4303.66Kgha-1year-1 followed by T3, T2, T5, T1 and T6, respectively. However, significantly lowest net fish yield of 2073.95Kg ha-1year-1 was obtained from the control treatment (T7). Labeo rohita, Catla catla, Cirrhina mrigala and Ctenopharyngodon idella showed negative allometric growth (n<3) under all the feeding regimes and a control. However, Hypophthalmichthys molitrix, regardless of treatments grew nearly isometrically (n=3). The level of digestible protein in supplementary feeds significantly influenced the condition factor (K) values of all the five fish species. Supplementary feed at 28% DP (T4) level gave significantly higher increase in fish yield of 51.67Kg year-1 pond-1 with overall pond nitrogen conversion ratio (NCR) of 1:5.17 when average nitrogen (from poultry droppings + feed) added to the fish ponds was 20.38Kg year-1 pond-1. The proximate composition of fish meat was significantly influenced by the levels of digestible protein in supplementary feeds also. The 28% DP (T4) levelcaused maximum accumulation of muscle proteins in Labeo rohita and Ctenopharyngodon idella as 19.15±0.50 and 18.32±0.84%, respectively whereas Catla catla, Cirrhina mrigala and Hypophthalmichthys molitrix had the maximum muscle protein contents of 18.02±0.40, 18.83±0.98 and 17.97±0.78% due to 26% DP (T3). These significant differences among fish species for their variable protein contents correlated positively with intake proteins and inherent growth potentials. Muscle fats were significantly different among five fish species at various feeding regimes. However, the pattern of five fish species to accumulate fats in their bodies followed the order: Ctenopharyngodon idella > Hypophthalmichthys molitrix > Cirrhina mrigala > Catla catla > Labeo rohita. Pond’s water quality was conducive for rearing fish since survival of all the five fish species was 100% at final harvest. Seasonal fluctuations in the temperature of water significantly influenced the fish growth. Total phosphates and nitrates appeared limiting nutrients for the planktonic productivity of ponds. The correlation between planktonic biomass and increase in fish yield was positively significant under all the treatments, showing the direct dependence of fish yield on planktonic productivity. Planktonic biomass was significantly higher due to 32% DP level (T6) showing additive effect of left over feed through recycling process in ponds. However, the responses of treatments toward planktonic productivity followed the order T6 > T5 > T4 > T3 > T2 > T1 > T7. Total hardness, chlorides, pH and total ammonia were the water quality variables that explained the most variability in planktonic productivity of ponds under different treatments. However, bicarbonates, total ammonia and calcium were the water quality variables that contributed significantly towards increase in fish yield under composite culture conditions. This project reveals sustainable use of poultry droppings at the rate of 0.17gN/100g wet fish weight daily along with low cost supplementary feed (28% digestible protein) given at the rate of 2% of fish body weight daily that gave significantly higher pond productivity both in terms of planktonic biomass and net fish yield of 4303.66Kgha-1year-1 without causing any adverse effects on the quality of water and fish meat. At the same time such culture system also offers abatement of animal excreta, like poultry droppings, in a productive manner. This project also has revealed a sustainable mechanism for the conversion of low valued feed ingredients into high quality but low cost fish yield in the country.