The Council of the Islamic Financial Services Board (IFSB) held its 7th meeting on 21 December at the Islamic Development Bank in Jeddah, Saudi Arabia, which was attended by 12 Governors of central banks and monetary agencies, the President of the Islamic Development Bank and representatives of 3 central banks. In a step that marks a turning point in the regulation of institutions that offer Islamic financial services, the Council agreed, among others, to adopt two prudential standards namely, the Guiding Principles of Risk Management Standard for Institutions (other than Insurance Institutions) offering only Islamic Financial Services and the Capital Adequacy Standard for Institutions (other than Insurance Institutions) offering only Islamic Financial Services. The two prudential standards, which are the first documents adopted by the IFSB since it started operations in March 2003, are recommended to be fully implemented by the end of 2007. The two standards were earlier issued as exposure drafts for public comments on 15 March 2005.
“With the attainment of approval to adopt the exposure drafts as standards, the IFSB looks forward to realizing its objectives, which is to promote the development of a prudent and transparent Islamic financial services industry through introducing new, or adapting existing, international standards consistent with Shariah principles, and recommend these for adoption”, said Professor Rifaat Ahmed Abdel Karim, Secretary-General of the IFSB.
The Council also approved the preparation of two new standards namely, a standard on governance of investment fund and another on special issues in capital adequacy.
Six new observer members were also admitted to the membership of the IFSB, namely Unicorn Investment Bank, Bahrain; Abu Dhabi Commercial Bank, UAE; Commercial Bank International, UAE; Dubai Bank, UAE; Commercial Bank of Qatar; and Albaraka Turkish Finance House, Turkey. The current total of the IFSB members is 84.
