20 May 2015, Almaty, Kazakhstan – The IFSB-IRTI Session on Mid-Term Review of the Islamic Financial Services Industry (IFSI) Development: Ten-Year Framework and Strategies, an annual pre-summit event organised by the IFSB and Islamic Research and Training Institute (IRTI), the research arm of the Islamic Development Bank Group (IDB), was successfully organised today in Kazakhstan.
The Session was held in conjunction with the 12th IFSB Summit in Almaty, which is hosted by the National Bank of Kazakhstan. It discussed “The Ten-Year Framework and Strategies for IFSI Development: A Mid-Term Review (MTR) Report”, published by the IFSB and IRTI in May 2014. This Report highlights the importance of integration as one of the key success factors for supporting the development and stability of the industry moving forward. The selected recommendations of the Report are as follows:
Drawing on the recommendations in the Report, this Session discussed the progress of initiatives to foster collaboration and integration of the industry, to identify the challenges faced by the industry, in particular new Islamic finance jurisdictions, in implementing such initiatives, as well as measures and initiatives to overcome these challenges.
In his opening remarks, Mr. Jaseem Ahmed, Secretary-General of the IFSB stressed the high relevance of the MTR of the Ten-Year Framework in the context of the challenges faced by the rapidly growing Islamic finance sector in this post crisis environment. He also reiterated the need for a strong public policy stance supported by a robust public-private sector dialogue. He specially stressed the value of road maps for the integrated development of the industry at the jurisdiction and regional levels.
The session on the theme, “Fostering Integration of the IFSI: Progress of Initiatives and Challenges Faced by the Islamic Finance Jurisdictions” was chaired by Mr. Mushtak Parker, Editor, Islamic Banker Magazine, UK. The presenters were Mr. Zahid ur Rehman Khokher, Assistant Secretary-General, IFSB and Dr. Salman Syed Ali, Senior Economist, IRTI-IDB. Mr. Khokher highlighted that the 16 Core Recommendations of the report, grouped into three pillars enablement, performance and reach, as well as 20 Key Initiatives provide a framework for the various stakeholders of the industry to support the implementation of the Core Recommendations. He also touched on the prospects of the Islamic financial services industry and key initiatives undertaken by the IFSB to support greater collaboration and integration of the industry at the global level. Dr. Syed Ali proposed for new emerging markets to include Islamic finance as part of their national plan while clearly identifying the role of major stakeholders and tracking the progress over time. Moreover, he suggested that the document could provide a comprehensive framework for the development of Islamic finance as different jurisdictions have different development trends in relation to Islamic finance.
The IFSB and IRTI presentations were followed by discussions by Mr. Linar Yakupov, President, Association of Regional Investment Agencies, Russia and Mr. Timur Omarov, Head, Islamic Finance Division, National Bank of Kazakhstan. The first discussant, Mr. Yakupov shared the background and progress of the development of Islamic finance in the CIS region, particularly Russia and the Republic of Kazakhstan. With the population of Muslims approximately 17 million within the CIS region, there is high potential and opportunity for the development and progress of Islamic finance, with the risk-sharing method seen as a more socially responsible way of undertaking finance. In addition, he discussed several important issues faced by the industry in the region. These include the lack of competent and skilled human resource in Islamic finance, including Shariah scholars. He was confident that the stakeholders in the region would like to be part of the global development and growth of the Islamic finance industry.
Mr. Omarov, the second discussant, highlighted that with the strong support from the President and the government of the Republic of Kazakhstan, the country is aiming to achieve 3-5% share of the Islamic finance assets within the financial system by 2020. He also added that the MTR Report serves as a landmark document – with policy directions to move forward. He would also like to see opportunities for greater interactive dialogues and sessions with more developed Islamic finance jurisdictions, such as those in the Middle East and Southeast Asia.
The Ten-Year Framework was first published by the IFSB, IDB and IRTI in 2007 to provide a general blueprint or guideline for new and existing Islamic finance jurisdictions in designing and developing their national plans and initiatives as part of their financial sector development policies. The MTR served to provide a Mid-Term Assessment of the Framework. As sponsors of the MTR, the IFSB and IRTI will continue their joint efforts in working with the national regulators in facilitating the development of a sound and stable global Islamic financial services industry.
The Report can be downloaded from the IFSB website, www.ifsb.org.
