IslamicFinance.de

A report by the World Bank and the General Council for Islamic Banks and Financial Institutions (CIBAFI) aims to encourage the sector’s governance. The findings are based on a survey of 77 Islamic banks across 22 countries, covering the industry’s core centres in the Gulf region and Southeast Asia and extending to Islamic banks in Africa and Europe. The report found risk governance was a weak spot for Islamic banks, recommending increased use of independent directors and strengthening the role of risk management officers. Sharia governance is another area of relative weakness, the big issues being the lack of diverse experience of the members on the sharia board and the infrequency of sharia board meetings. The report recommends the development of a new or revised standard for corporate governance that is specific to Islamic banks.