7 December 2023, Kuala Lumpur – The Islamic Financial Services Board (IFSB) today issued three new papers in the IFSB Working Paper series:
WP-27 looks at the regulatory and supervisory landscape for digital Islamic banking. The primary objective of the paper was to study the commonalities and distinct features across jurisdictions where digital Islamic banking is practised. It generally finds through a survey of IFSB members, that regulation of digital Islamic banking is in its early stages and most jurisdictions presently apply similar regulatory frameworks to both digital and traditional Islamic banks and there is a need to monitor the effectiveness of existing regulatory frameworks and identify any gaps to ensure that risks inherent to the business model of digital Islamic banks are adequately addressed.
WP-28 provides an analysis and comparison of regulatory frameworks across jurisdictions, focusing on Sharīʻah- compliant financing platforms including peer-to-peer (P2P) financing and equity crowdfunding (ECF). The paper aims to enhance the understanding of developments in member jurisdictions in terms of existing or proposed regulatory regimes for ECF and P2P financing and to highlight any emerging trends and issues in this area, particularly concerning Sharīʻah specificities and their relevance to regulation and supervision. The findings of the paper are intended to discern any need for further work in addressing regulatory or supervisory gaps for Sharīʻah-compliant P2P financing and ECF.
WP-29 aims to analyse current regulatory and supervisory practices regarding Islamic Social Finance (ISF) in various jurisdictions. It identifies areas of consensus and differences in ISF practices across jurisdictions and highlights some of the existing gaps and challenges. The working paper focuses on a comprehensive scope of ISF institutions encompassing Zakāh, Sadaqah, Islamic microfinance, waqf, micro-takāful, Islamic cooperatives, and other institutions that specific jurisdictions may categorise under the domain of ISF, and examines the obstacles encountered in supervision and regulation of such institutions.
The findings of the three working papers were supported by more focused discussions with selected regulators as well as through comments received by IFSB members during members' consultation. The paper also benefited from discussions at the 1st IFSB Consultative Group meeting, held in Riyadh, Saudi Arabia. The findings are envisaged to inform the future work of the IFSB in related areas.
The IFSB Secretary-General, Dr. Bello Lawal Danbatta stated that ‘the three working papers are timely in looking at some of the critical emerging issues that are pertinent to the development and resilience of the Islamic financial services industry and its integration within the rapidly evolving global financial landscape spurred by technological advancements and increasing need for greater social impact of financial services.’.
The IFSB Working Paper Series are available for download from the IFSB website, www.ifsb.org.
