Islamic Financial Services Board (IFSB)

IFSB database disseminates data for Islamic Banking Systems in 22 countries

The Islamic Financial Services Board (IFSB) has published country-level data on financial soundness and growth of the Islamic banking systems for Q3 and Q4 of 2018 from 22 IFSB member jurisdictions. A special feature of this publication is the inclusion of full-fledged Islamic banking data of Kazakhstan for the first time as Kazakhstan joined the database project in January 2019. The total assets of the Islamic banking industry stand to USD 1,754 billion in 2018Q4 from USD 1,684 billion in 2017Q4. Financing by Islamic banks from the participating jurisdictions reached USD 1,052 billion in 2018Q4 from USD 1,024 billion in 2017Q4. The IFSB Task Force has been greatly facilitating the collection of Islamic banking data. The database is available at the IFSB website https://psifi.ifsb.org.

IFSB issues working paper on risk-sharing in Islamic Banking

The Islamic Financial Services Board (IFSB) issued its 10th research (WP-10) in the IFSB Working Paper series which explores the risk-sharing practices in the Islamic banking sector. It describes the views of both Islamic banks and regulatory and supervisory authorities (RSAs) on the practices of Islamic banks in IFSB member jurisdictions. This is in relation to the governance rights of unrestricted profit-sharing investment account (UPSIA) holders. The findings in WP-10 reveal that the capital treatment of the UPSIA in general varies across different jurisdictions and Islamic banking type. In most of the jurisdictions UPSIAs are considered to be 'investments' exposed to losses rather than 'deposits' with capital certainty.

The IFSB Database Completes Five Years Data for Islamic Banking Systems in 21 Countries, including the United Kingdom for the First Time

The Islamic Financial Services Board (IFSB) published country-level data on financial soundness and growth of the Islamic banking systems for Q1 of 2018 from 21 IFSB member jurisdictions. This report includes the data from four newly joined countries, namely: Qatar, Palestine, Lebanon, and the first time for the United Kingdom. With the inclusion of new countries’ data, the total assets of the Islamic banking industry grew by 8.0% from USD 1,573 billion in 2017Q1 to USD 1,699 billion in 2018Q1. Financing by Islamic banks grew by 6.7% and reached USD 1,033 billion in 2018Q1 from USD 968 billion in 2017Q1. The number of full-fledged Islamic banks and Islamic windows of conventional banks in 21 IFSB member participating countries stood at 188 and 85 in 2018Q1 as compared to 184 and 84 in 2017Q1 respectively.

IFSB launches 2018 financial services industry stability report

The Islamic Financial Services Board (IFSB) has launched the 2018 Islamic Financial Services Industry (IFSI) Stability Report. The Secretary-General of the IFSB, Dr. Bello Lawal Danbatta, highlighted some of the key findings of the 2018 Report, particularly the rising domestic systemic significance of Islamic finance in key jurisdictions. The study found that the global IFSI has returned to a robust growth of 8.3%, following two years of growth stagnation. In addition, the IFSI surpassed the $2 trillion mark as of the end of 2017. The report also states that the growth of the industry in 2017 was actively driven by all three sectors of the IFSI, but with a significant contribution by the performance of the Islamic capital markets boosted by Sukuk issuances from sovereign and multilateral institutions.

Islamic finance body IFSB to develop financial inclusion guidance

The Malaysia-based Islamic Financial Services Board (IFSB) plans to develop a technical note on financial inclusion. The technical note will cover regulatory issues including Islamic microfinance, financial technology and integration of social finance. The guidelines will be funded by a grant from the Islamic Development Bank to be implemented over the next three years. Tens of millions of people in the Muslim world lack bank accounts because of poverty, poor education and a lack of infrastructure, but religious reasons are also an important element. Research from the International Monetary Fund has shown that religious concerns play a role in keeping people out of the financial system in countries such as Afghanistan, Iraq and Tunisia.

CBK-IFSB #Conference on Islamic Finance themed "Islamic Finance: A Universal Value Proposition"

The Central Bank of Kuwait (CBK) and the Islamic Financial Services Board (IFSB) are organizing a conference on Islamic Finance on the 2nd of May 2018. The conference will be held in the State of Kuwait in conjunction with the IFSB Annual Meetings 2018, hosted by the CBK. The CBK-IFSB Islamic finance conference is expected to attract senior-level participation from among the global and financial industry stakeholders and thought leaders. Discussions will revolve around the role Islamic finance can play in government strategies to build a diversified and sustainable economy. The IFSB Annual Meetings 2018 will be held in Kuwait from 1–3 May 2018. Alongside the conference, CBK is also hosting the IFSB Public Lecture, Members and Industry Engagement Session, the IFSB’s General Assembly and Council Meetings during the 3 days.

Islamic finance: IFSB #forum to focus on preserving wealth

The 12th IFSB-INCEIF Executive Forum on "Preserving Wealth and Generating Long-term Value through Islamic Finance" will take place on 6 and 7 March 2018 in Kuala Lumpur, Malaysia. The Islamic Financial Services Board (IFSB) and the Global University of Islamic Finance (INCEIF) have announced the speakers of the event. The forum will feature topics such as the role of wealth management from an Islamic perspective, the role of the Takaful sector, Shari’ah-compliant opportunities for retirement planning and wealth management, realising long-term societal development through social contracts and regulator’s role in promoting risk management practices. The forum is ideal for regulators and supervisors of the Islamic financial services industry, scholars and researchers, especially those in the area of Islamic wealth management.

#Uganda to publish Islamic banking rules soon -central bank

The government of Uganda has approved regulations covering Islamic banking. Governor Emmanuel Tumusiime-Mutebile said that once the regulations are gazetted, the central bank would be open for applications from financial institutions to offer sharia-compliant products. Uganda joins several African countries that have sought to develop interest-free banking in recent years, including Nigeria, Morocco and Senegal. Despite small populations of Muslims, countries such as Uganda, Kenya and Ethiopia are also developing the sector to expand financial access and inclusion. In December, the central bank of Uganda became an associate member of the Islamic Financial Services Board (IFSB), one of the industry’s main standard-setting bodies.

IFSB to Develop Detailed Guidance on Safety Nets in Islamic Finance

The Malaysia-based Islamic Financial Services Board (IFSB) plans to develop more detailed guidance on financial safety nets relating to sharia-compliant transactions in areas such as insolvency and bankruptcy. Such efforts are important as Islamic finance expands in both established and new markets, while transactions are under heightened scrutiny due to the perceived risk of non sharia-compliance or sharia risk. IFSB Secretary General Zahid ur Rehman Khokher said the safety net may include more detailed work on deposit insurance in 2018, while work on dispute resolution and insolvency may be completed later. The IFSB currently has a membership of 75 national regulators. Last month, the IFSB admitted eight new members, including Saudi Arabia’s Capital Market Authority, the Abu Dhabi Global Market and German financial watchdog Bafin.

IFSB to develop detailed guidance on safety nets in Islamic finance

The Malaysia-based Islamic Financial Services Board (IFSB) plans to develop more detailed guidance on financial safety nets for Islamic finance. Such efforts are important as Islamic finance expands in both established and new markets, while transactions are under heightened scrutiny due to the perceived risk of non sharia-compliance or sharia risk. IFSB Secretary General Zahid ur Rehman Khokher said the safety net may include more detailed work on deposit insurance in 2018, while work on dispute resolution and insolvency may be completed later. The IFSB currently has a membership of 75 national regulators. Last month, the IFSB admitted eight new members, including Saudi Arabia’s Capital Market Authority, the Abu Dhabi Global Market and German financial watchdog Bafin.

The IFSB disseminates Q2 Islamic banking data

The Islamic Financial Services Board (IFSB) announced the dissemination of country-level data on financial soundness for Q2 of 2017 from 15 IFSB member jurisdictions. This eighth dissemination completes the availability of quarterly data from Q4 of 2013 to Q2 of 2017. According to Secretary-General of the IFSB, Zahid ur Rehman Khokher, the IFSB has both extended the coverage of PSIFIs banking sector database to several new countries, as well expanded the database coverage to Islamic insurance and Islamic capital market sectors. The PSIFIs project is currently collecting Islamic banking data on a trial basis from newly-joined contributors: Bank of England, Central Bank of Lebanon (Banque du Liban), Palestine Monetary Authority, and Qatar Central Bank.

IFSB: Islamic #FinTech Finance Bigger in Asia than First Thought

Islamic fintech finance in Asia is anticipated to be bigger than originally thought. According to the secretary-general of the Islamic Financial Services Board (IFSB), Zahid ur Rehman Khokher, Islamic finance has the potential to expand further into the Asian market. He noted that the IFSB has been closely monitoring global developments in fintech. Yet, he feels there is a shortage of staff with the appropriate skills. Earlier this month, it was reported that Malaysia was the idea test bed for developing fintech solutions. According to Marzunisham Omar, assistant governor at the Bank Negara Malaysia, even though Islamic finance is still growing within the country, now is the time for the sector to embrace the fintech wave.

Asia ripe for Islamic finance as #fintech comes to the fore

According to Zahid ur Rehman Khokher, secretary-general of the Islamic Financial Services Board (IFSB), the growth potential of Islamic finance in the Asian market is much bigger than might be expected. He emphasized the developing role of fintech within the sector and the IFSB's role in setting standards. He noted the importance of Islamic microfinance in addressing issues of financial inclusion and improving participation in the financial sector. With the range of new services that are emerging, Zahid feels that capacity building is the biggest challenge at the moment. He feels there is a need for developing human resources and appropriate expertise within central banks, Shariah boards, as well as in commercial financial institutions.

New release of IFSB’s Prudential Database from 17 countries shows improved #Islamic #banking #performance

The Islamic Financial Services Board (IFSB) has announced new country-level data on growth of the Islamic banking systems for Q4 of 2016 and Q1 of 2017 from 17 IFSB member jurisdictions. IFSB Secretary-General Zahid ur Rehman Khokher said the IFSB’s Prudential and Structural Islamic Financial Indicators (PSIFIs) database project has reached 14 quarters, and that it would soon be extending to four new jurisdictions. He added that the IFSB also plans to release sector level balance sheets of entire jurisdictions for the Islamic banking market starting next year. The PSIFI project currently compiles data from 17 member countries: Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Iran, Jordan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Saudi Arabia, Sudan, Turkey, and the United Arab Emirates. The IFSB is now in the process of collecting Islamic banking data from these new contributors: Qatar Central Bank, Bank of England, Central Bank of Lebanon and Palestine Monetary Authority.

IFSB #Engagement #Session with the #Indonesian Islamic Finance Stakeholders

The Islamic Financial Services Board (IFSB), Bank Indonesia and the Financial Services Authority of Indonesia (OJK) organised an Industry Engagement Session. The event was entitled "The Global Islamic Finance Industry and the IFSB" and took place on 2 October in Jakarta. Anwar Bashori, Head of Islamic Finance at Bank Indonesia, shared his optimism that there is strong potential for further growth of this sector in Indonesia. He also touched on the importance of Halal tourism and food industry, and the various challenges and opportunities related to Fintech. In the panel discussion Prof. Volker Nienhaus commented on the emerging trend which is expected to enhance financial inclusion through the greater use of fintech. Ahmad Buchori shared the current issues of Islamic finance in Indonesia. Dr. Rifki Ismal’s presentation focused on developing the Islamic social sector to enhance the Indonesian economy. The session ended with discussions between the participants, where the industry players reaffirmed the important role of regulators. There was a request for more platforms to address and discuss key issues and concerns of the Islamic finance players.

Islamic finance industry hampered by global economic conditions

The Islamic Financial Services Board (IFSB) released its IFSB Industry Stability 2017 Report. It states that global economic volatilities, consistently low oil prices and reduced demand for credit are among the factors that currently weigh on the Islamic financial service industry. The study says that 2016 marked another year of slower growth amid adverse macro-economic conditions. They include adjustments in the value of global Islamic banking assets in US dollar terms on the back of exchange rate depreciations in countries such as Malaysia, Turkey and Indonesia, as well as the persistent lack of global standardisation, and lower liquidity and profitability compared to the conventional banking sector. According to the IFSB, the global size of the Islamic financial service industry has not changed much, with total Islamic finance assets just slightly increasing to $1.89tn from $1.88tn. Another factor that affected asset growth was the currency depreciation in Iran, the world’s largest Islamic finance jurisdiction in terms of assets.

#Fintech and Islamic #Crowdfunding

The Islamic Financial Services Board (IFSB) in its annual report highlighted developments in the Islamic Finance Fintech space. To identify relevant crowdfunding platforms with a focus on equity- and loan-based platforms located in the Muslim world, the database of Crowdsurfer was consulted. It lists in 32 of the 57 member states of the Organisation of Islamic Cooperation (OIC) a total of 108 crowdfunding platforms. After some corrections, the Crowdsurfer database identifies 14 equity-based and 13 commercial loan-based crowdfunding platforms with an active status. The number of platforms in OIC member states that explicitly refer to Islamic finance or Shariah and offer investors financial returns is very small. There are two more Islam-oriented active platforms of this type outside the OIC: Ethis Crowd (Singapore) for real estate, and KapitalBoost (Singapore) for SME financing.

The IFSB releases the Islamic Financial Services Industry #Stability #Report 2017

The Islamic Financial Services Board (IFSB) has released the fifth edition of its annual Islamic Financial Services Industry Stability Report 2017. The Report finds that despite subdued growth conditions, the global IFSI has been able to sustain its total assets value at approximately $1.9 trillion in 2016. The Report illustrates areas that could be further strengthened across all sectors of the IFSI (banking, capital markets and Takaful), many of which will require measured efforts by the national authorities to address the emerging risks. Secretary-General of the IFSB, Zahid ur Rehman Khokher, stated that Islamic financial services industry withstood the challenging operating environment. However, it moved away from the double digit growth trajectory witnessed in the previous years. He added that this slowdown underscores the importance of strengthening the resilience of the Islamic financial system.

The IFSB and DFSA Organise Joint #Seminar on the Role of #Sukuk and Securitisation to Support New Financial Regulations

The Islamic Financial Services Board (IFSB) and the Dubai Financial Services Authority (DFSA) successfully organised a Joint Seminar themed "The Role of Sukuk and Securitisation to Support New Financial Regulations". Ian Johnston, Chief Executive of the DFSA welcomed the IFSB and the Joint Seminar’s participants. He discussed the need for the industry to think laterally to address the shortage of liquidity management tools at Islamic institutions. The panel offered insight into sukuk instruments and the Islamic capital market developments. A panelist mentioned that there is expected to be 70bn USD of new issuance during 2017; however this is not enough to keep up with the projected growth of the Islamic finance industry. To resolve the impediments, the industry needs more standardisation in terms of legal documentation and Shariah interpretations. The Joint Seminar ended with the panel emphasising the need for liquidity generation initiatives to be supported at the regulatory and government levels.

Islamic Banking: Bank Al Maghrib Interested in IFSB Prudential Standards

Bank Al-Maghrib and the Islamic Financial Services Board (IFSB) co-organized a regional workshop entitled "Facilitating Implementation of IFSB Standards" in Rabat. The workshop focused on 3 standards for participatory banking: IFSB-15 "Revised Capital Adequacy Standard" on Prudential Capital and Solvency Standards, IFSB-16 "Revised Guidance on Key Elements in the Supervisory Process" on Supervision Standards, and GN-6 "Quantitative Measures for Liquidity Risk Management" on prudential liquidity standards. This event is part of the measures taken by Bank Al-Maghrib to finalize the regulatory framework governing participatory banking activities in Morocco.

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