At a Glance Islamic Financial Services Board IFSB At a Glance - - PowerPoint PPT Presentation

Islamic Financial Services Board IFSB At a Glance

Walid lid Ahmad AlZ lZahrani

Assistant Secretary-General, IFSB

Islamic Financial Services Board IFSB At a Glance

2002

2003

2008

2015

2017

2019

QUICK GLANCE…

SPECIFICITIES OF ISLAMIC FINANCE

• IFSB

was established in November 2002 and started

• perations in March 2003.
• The IFSB is an International standard-setting body for prudential

regulation to ensure the soundness and stability of the Islamic financial services industry, covering Islamic banking, Islamic capital market and Takāful sectors.

1

From 9 in 2003 to 182 members as of April 2019

NUMBER OF MEMBERS MEMBERSHIP TYPE IFSB MEMBERS

79

RSAs

95

Market Players

8

Inter-governmental

8 INTER- GOVERNMENTAL ORGANISATIONS

IF IFSB MEMBERSHIP

35 37 110

Full Associate Observer 2

OUR STRATEGIC FOCUS ARE REAS

01 02 04

SKRA 1: Formulation and Issuance

• f Prudential Standards, Research

and Statistics

SKRA SKRA SKRA SKRA

03

Advancing the IFSB Operations to Address Evolving Global Challenges

SPP

OC5

SKRA 4: Efficient Management of Resources SKRA 2: Facilitating the Implementation of Prudential Standards and Capacity Development SKRA 3: Increasing Value in the IFSB Membership, Global Visibility and Attractiveness

SKRA

ACCOUNTABILITY INTEGRITY COLLABORATION RESPONSIVENESS

CORE VALUES

Standards Development

Implementation

Global Visibility Resources Management

3

Governance, Disclosure Requirements and Core Principles

3 Standards

Conduct

• f

Business and Shariah Governance

2 Standards

Governance, Risk Management, Solvency, Retakaful and Supervisory Review Process

6 Standards

Risk Management, Capital Adequacy, Liquidity Management, Corporate Governance, Supervisory Review Process, Core Principles, Stress Testing, Transparency and Market Discipline

19 Standards PUBLISHED PRU RUDENTIAL STANDARDS

4

The IFSB Standards fill crucial gaps for the Islamic Financial Services Industry… …..to ensure that regulatory frameworks adequately address the specificities and unique features related to Islamic finance… ….which are complementary to and fits within the existing international regulatory frameworks for the financial services industry

ROLE OF F IF IFSB STANDARDS

Preconditions for Islamic Finance Regulation

Sharīʻah- governance Regulations that deal with specific risks & regulatory considerations for Islamic Banks (e.g. PSIAs, DCR, CAR, Stress testing, financial safety nets etc.) Specific Disclosures for IIFS Regulations to address specificities

• f Takaful

(separation of funds, Qard, surplus, supervision, governance etc.) Regulations to reflect the specificities in the ICM (Ṣukūk, ICIS, Islamic equities & market intermediaries)

Global Regulatory Standards for the Institutions

• ffering Islamic Financial Services (IIFS)

Core Principles for Islamic Finance Regulation

5

2019 2020

Standards & GN

• 1. Technical Note on Financial

Inclusion and Islamic Finance

• 2. Core Principles for Effective

Islamic Deposit Insurance Systems

• 3. Guidance

Note

• n

Sharīʿah- compliant Lender

• f

Last Resort

Standards & GN

• 1. Revised Capital Adequacy

Standard

• 2. Investor

Protection for Islamic Capital Markets

• 3. Transparency

and Disclosure for Takaful / Retakaful Undertakings

NE NEW STANDARDS UNDER DE DEVELOPMENT

6

2021

Standards & TN

• 1. Core Principles for Islamic

Finance Regulation

• Takaful
• 2. Recovery and Resolution

Planning for Institutions

• ffering Islamic Financial

Services

RE RESEARCH PAPERS 2019

Ongoing research

1. Anti-Money Laundering / Counter Terrorism Financing and Islamic Banking (Approved for Members’ Consultations) 2. Islamic Capital Market Intermediaries 3. Issues in the Regulation and Supervision of Shari’ah Compliant Hedging Instruments

Published

1. Investigating Inter-Sectoral Linkages in the Islamic Financial Services Industry 2. Risk Sharing Instruments in Islamic Banking

7

RESEARCH

2019 2019

Newly launched

1. Profit Sharing Investment Account: Cross- country analysis 2. FinTech, RegTech, SupTech and Islamic Finance 3. Effectiveness of Macro-prudential Tools in Islamic Finance 4. Prudential and Regulatory Issues Arising from Takaful Window Operations 5. Risk-Based Suervision in Islamic Banking

IM IMPLEMENTATION ACT CTIV IVITIES

Annual Implementation Survey

Other Implementation Activities

FIS Outreach Programmes FIS Workshops E-Learning Modules Technical Assistance

Standards Implementation Strategy

Standards Translation

Participation in

• ther organisations’

events with focus

• n the IFSB

Standards Online platform to increase understanding

• f the IFSB Standards.

Includes16 Modules on key IFSB Standards Country level FIS workshops and annual regional workshops for RSAs Facilitating knowledge- sharing among the IFSB members and capacity building at specific RSAs

Policy Advice

FIS Workshops 2007 to date 40 110 4,124

Countries Number of Workshops Number of Participants

8

Frequently Asked Question (FAQs) IFSB’s Standards translations

Impact and Consistency Assessment Programme (ICAP)

Training of Trainers (ToT)

Country Assessments, Peer Reviews, Self-Assessments

Annual Country Analysis Implementation Survey

6 1 5 3 4 2

NEW IM IMPLEMENTATION IN INIT ITIATIVES

9

THE PSI SIFIs DATABASE

Category Countries G-20 Indonesia Saudi Arabia Turkey United Kingdom Emerging & developing Asia Bangladesh Brunei Iran Malaysia Pakistan Central Asia Afghanistan Kazakhstan Middle East Bahrain Iraq Jordan Kuwait Oman U.A.E Palestine Qatar Lebanon Libya Africa Egypt Nigeria Sudan

Facilitate the monitoring and analysis of the soundness and stability of the IFSI

10

Expansion to ICM and TAKAFUL Sector Quarterly Data 35 Indicators Separate data for full fledged banks and Islamic windows Aggregate Sectoral Data from RSAs

THE PSIFIs DATABASE

Prudential and Structural Indicators

GL GLOBAL ISL ISLAMIC FI FINANCE SE SERVICES IN INDUSTRY (IF (IFSI) ASSETS

11

• The global IFSI maintained its positive growth by 6.9% growth (y-o-y) with the IFSI’s total worth estimated

at USD 2.19 trillion (2Q18).

• The relative decline in growth rate compared to 2017 was due to currency depreciation in a number of

jurisdictions from 2017 to Q318.

*Data for sukūk outstanding and Islamic funds are for full-year 2018. The data for Islamic banking are as at the end of June 2018 (1H18); and for takāful are as at end-2017.

US$2.19 Trillion

2017 2018

US$2.05 Trillion

6.9%

24.2 2.8 1.3 71.7

Breakdown of the Global IFSI by Sector

Sukuk Islamic Funds Takaful Islamic Banking

12 Islamic Banking Share in Total Banking Assets by Jurisdiction (1H2018) Shares of Global Islamic Banking Assets* (1H2018)

Iran 32.1% Saudi Arabia 20.2% UAE 9.8% Malaysia 10.8% Kuwait 6.3% Qatar 6.2% Turkey 2.6% Bangladesh 2.1% Indonesia 1.9% Bahrain 1.7% Sudan 0.7% Pakistan 1.3% Egypt 0.6% Jordan 0.7% Oman 0.7% Brunei 0.5% Others 1.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Iran Sudan Brunei Saudi Arabia Kuwait Malaysia Qatar UAE Bangladesh Djibouti Jordan Palestine Bahrain Pakistan Oman Afghanistan Maldives Indonesia Iraq Tunisia Turkey Senegal Egypt Bosnia &… Algeria Kyrgyz… Kenya Sri Lanka Tanzania Lebanon Thailand Nigeria South Africa Kazakhstan UK Mauritius

Countries in dark blue coloured bars are those with at least 15% share of Islamic banking assets as a proportion to total domestic banking sector

• assets. These are categorised as systemically

important jurisdictions,

• Islamic banking now present in over 60 countries,
• systemically important in 12 jurisdictions
• Recorded further deepening in many jurisdictions

Top five jurisdictions based in share if global Islamic banking assets are: Iran 32.1% (2Q1710.8 34.4%) Saudi Arabia 20.2% (2Q17: 20.4%), Malaysia % (2Q17: 9.1%), UAE 9.8% (2Q17: 9.3%) and Kuwait 6.3% (2Q17: 6.0%)

SYSTEMIC IM IMPORTANCE OF F ISL ISLAMIC FI FINANCE

Collaboration MOU MOU MOU MOU MOU MOU Collaboration

STRATEGIC COLLABORATIONS

13

Contact Us

He Head of

• f Com

Communications an and Awar areness Programmes He Head of

• f Membership Affairs

Ahmed Ba Barakat

Mem embership@ifsb.org

Nir irvana Jalil Jalil Ghani

ifsb_ b_sec@if ifsb.or

• rg

14

For

• r Im

Implementation an and FIS FIS Wor

• rkshops

Esa sam Osa sama Al-Aghbari

Imp Implementatio ion@ifsb.o .org

Thank You

www.ifsb.org