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Saturday, 7 December 2013

IFSB revising guidelines for Islamic finance institutions around the world

SYDNEY: Kuala Lumpur-based Islamic Financial Services Board (IFSB) is revising guidelines on the supervision of Islamic finance institutions around the world, helping tighten regulatory oversight of industry practices.
Guidelines from the IFSB, one of the main standard-setting bodies for Islamic finance, are gaining prominence as the industry takes a greater share of the banking sector in several majority Muslim countries.
The latest update complemented stricter Basel rules, agreed globally to make banks safer after the 2007–09 credit crisis, IFSB secretary-general Jaseem Ahmed toldReuters.
This expands its original 2007 document, known as IFSB5, to include areas such as regulatory capital, corporate governance, stress testing, securitisation exposures, liquidity, concentration and counter-party risk.
“Overall, the revisions are significant, in particular the areas which were not envisaged in the IFSB5,” Ahmed said. “It is broadly analogous to Pillar 2 of the Basel accords.”
Founded in 2002, the IFSB’s initial efforts have focused on winning a wide membership base, leaving implementation and enforcement to national regulators to decide.
Now, however, the 187-member IFSB is issuing more detailed guidance in response to the global financial crisis, and a trend towards tightening regulation of conventional financial markets.
In the past year, the IFSB has issued separate guidelines on liquidity risk management and stress testing, while currently reviewing a draft on capital adequacy.
The revision provides more detailed guidance on areas such as Islamic windows, a practice which allows conventional banks to offer Islamic financial services provided that clients’ money is segregated from the rest of the bank.
Islamic windows are widely used in the industry but some regulators have struggled to cope with monitoring their risks and the complexity of financial reporting.
The IFSB plans a public hearing on the revised standard on Monday in Qatar, following a similar hearing in Kuala Lumpur last month.
(The Star Online / 07 Dec 2013)
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`Malaysia has the best Islamic finance module'

finance module' --> MANAMA ( Bahrain ): STANDARD Chartered Saadiq Malaysia (Saadiq Malaysia) believes that Malaysia's Islamic finance module is the closest to perfection and, as such, is utilising it to the betterment of its global operations. "There are best practices everywhere, butwe believe that Malaysia right now has the best module, and that's why we are bringing in talent from all over the world to learn this," Wasim Saifi , Saadiq Malaysia's chief executive officer and global head of Islamic banking, told Business Times at the World Islamic Banking Conference (WIBC), here, yesterday. "Right now, we are in the process of bringing in talent from our global branches to Malaysia in order to allow them to work and learn the Malaysian module so that when they go back in three years or so, they will be able to emulate the module in their countries," he said. Wasim noted that as of now, Saadiq Malaysia has already brought in two talents from Dubai , two from Pakistan , and two more from Bangladesh and Indonesia , respectively, in early next year. "We're not even looking at the numbers when it comes to bringing in talent into the country," he said, when asked how much investment Saadiq Malaysia was putting into the exercise. "It's really not an issue because at the end of the day, we can have all the technology and the products, but there's no point if we don't have the talent and the expertise to manage them," Wasim said, adding that the exercise, which started this year, will continue till 2015. He also said that Saadiq Malaysia is looking to aggressively grow its small- to medium- sized enterprise (SME ) segment next year, while also looking to raise its product disbursement via 32 existing Standard Chartered branches. "SME is always an important segment not only to Saadiq, but also the group. So we do have plans to increase this next year, but I can't reveal how just yet," he said. Wasim earlier participated in the CEO and industry leaders' power debate in "New Strategic Approaches to Revitalise Global Growth" and was a panelist in the "Expanding the Global Reach and Depth of Islamic Finance" session. The conference is now in its 20th year and saw the participation of 1300 delegates from 50 countries.

(HispanicBusiness.Com / 05 Dec 2013)
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