Islamic Financial Services Board IFSB At a Glance

Walid Ahmad AlZahraniAssistant Secretary-General, IFSB

Islamic Financial Services Board IFSB At a Glance

20022003

200820152017

2019

QUICK GLANCE…

SPECIFICITIES OF ISLAMIC FINANCE

• IFSB was established in November 2002 and started

operations 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 182members as of April 2019

NUMBER OF MEMBERS

MEMBERSHIP TYPE

IFSB MEMBERS

79 RSAs

95 Market Players

8 Inter-governmental

8 INTER-GOVERNMENTALORGANISATIONS

IFSB MEMBERSHIP

35

37110

Full Associate Observer

2

OUR STRATEGIC FOCUS AREAS

01 02 04

SKRA 1: Formulation and Issuance of Prudential Standards, Research and Statistics

SKRA SKRA SKRASKRA

03Advancing 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, DisclosureRequirements and CorePrinciples

3 Standards Conduct of Business andShariah Governance

2 Standards

Governance, RiskManagement, Solvency,Retakaful and SupervisoryReview Process

6 Standards

Risk Management, CapitalAdequacy, LiquidityManagement, CorporateGovernance, SupervisoryReview Process, CorePrinciples, Stress Testing,Transparency and MarketDiscipline

19 Standards

PUBLISHED PRUDENTIAL 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 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

of 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 offering Islamic Financial Services (IIFS)

Core Principles for Islamic Finance Regulation

5

2019

2020Standards & GN

1. Technical Note on Financial

Inclusion and Islamic Finance

2. Core Principles for Effective

Islamic Deposit Insurance

Systems

3. Guidance Note on Sharīʿah-

compliant Lender of Last

Resort

Standards & GN

1. Revised Capital Adequacy

Standard

2. Investor Protection for

Islamic Capital Markets

3. Transparency and

Disclosure for Takaful /

Retakaful Undertakings

NEW STANDARDS UNDER DEVELOPMENT

6

2021

Standards & TN

1. Core Principles for Islamic

Finance Regulation -

Takaful

2. Recovery and Resolution

Planning for Institutions

offering Islamic Financial

Services

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

IMPLEMENTATION ACTIVITIES

Annual

Implementation

Survey

Other Implementation

Activities

FIS Outreach

Programmes

FIS Workshops

E-Learning

Modules

Technical Assistance

Standards

Implementation

Strategy

Standards Translation

Participation in

other organisations’

events with focus

on the IFSB

Standards

Online platform to

increase understanding

of 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 IMPLEMENTATION INITIATIVES

9

THE PSIFIs DATABASE

Category Countries

G-20

Indonesia

Saudi Arabia

Turkey

United Kingdom

Emerging &

developing

Asia

Bangladesh

Brunei

Iran

Malaysia

Pakistan

Central AsiaAfghanistan

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 Data35 Indicators

Separate data for full

fledged banks and

Islamic windows

Aggregate Sectoral

Data from RSAs

THE PSIFIs DATABASEPrudential and Structural Indicators

GLOBAL ISLAMIC FINANCE SERVICES INDUSTRY (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)

Iran32.1%

Saudi Arabia20.2%

UAE9.8%

Malaysia10.8%

Kuwait6.3%

Qatar6.2%

Turkey2.6%

Bangladesh2.1%

Indonesia1.9%

Bahrain1.7% Sudan

0.7%

Pakistan1.3% Egypt

0.6%

Jordan0.7%

Oman0.7%

Brunei0.5%

Others1.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

IranSudanBrunei

Saudi ArabiaKuwait

MalaysiaQatarUAE

BangladeshDjiboutiJordan

PalestineBahrain

PakistanOman

AfghanistanMaldives

IndonesiaIraq

TunisiaTurkey

SenegalEgypt

Bosnia &…AlgeriaKyrgyz…Kenya

Sri LankaTanzaniaLebanonThailand

NigeriaSouth AfricaKazakhstan

UKMauritius

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 IMPORTANCE OF ISLAMIC FINANCE

Collaboration

MOU

MOU

MOU

MOU

MOU

MOU

Collaboration

STRATEGIC COLLABORATIONS

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Contact Us

Head of Communications and Awareness Programmes Head of Membership Affairs

Ahmed Barakat

Membership@ifsb.org

Nirvana Jalil Ghaniifsb_sec@ifsb.org

14

For Implementation and FIS Workshops

Esam Osama Al-Aghbari

Implementation@ifsb.org

Thank You

www.ifsb.org