Islamic Financial Services Board
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| Abbreviation | IFSB |
|---|---|
| Formation | November 3, 2002 in Malaysia. |
| Type | Independent international not-for-profit organization |
| Purpose | Sets standards for regulatory and supervisory agencies of the Islamic financial services industry |
| Headquarters | Kuala Lumpur,  Malaysia |
| Location |
|
Region served | Worldwide |
Membership | 180 |
Official language | English, Arabic |
Secretary-General | Dr. Bello Lawal Danbatta |
Main organ | General Assembly |
Staff | 11-50[2] |
| Website | www |
Introduction
The Islamic Financial Services Board (IFSB) is an international standard-setting body of regulatory and supervisory agencies that promotes the soundness and stability of the Islamic financial services industry, covering banking, capital market and insurance.[3] In advancing this mission, the IFSB promotes the development of a prudent and transparent Islamic financial services industry through introducing new, or adapting existing international standards consistent with Sharî'ah principles, and recommend them for adoption.[4][5][6]
To this end, the work of the IFSB complements that of the Basel Committee on Banking Supervision (BCBS), International Organisation of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS).[7] IFSB was originally established to sever banking sector regulators and central banks. However, in 2004-2005, the IFSB mandate was extended to include supervisors and regulators of insurance and securities markets.
Mission
The mission of the IFSB is to promote the stability and resilience of the Islamic financial services industry. The IFSB seeks to achieve its mission through the issuance, and facilitating the implementation, of global and prudential and supervisory standards and other initiatives that foster knowledge sharing and cooperation.[8]
Location
IFSB is based in Sasana Kijang,[9] Kuala Lumpur, Malaysia, and began operations on 10 March 2003.[10]
Founding Members
IFSB was founded by "a consortium of central banks" and the Islamic Development Bank.[11] The country of its location, Malaysia, passed a special law the year the IFSB was established—the Islamic Financial Services Board Act 2002—giving the IFSB the usual "immunities and privileges" international organizations receive.[12]
Nine Founding Members signed the Articles of Agreement on 3 November 2002. These are:[13]
1. Central Bank of Bahrain (formerly known as Bahrain Monetary Authority)
2. Bank Indonesia
3. Central Bank of the Islamic Republic of Iran
4. Central Bank of Kuwait
5. Bank Negara Malaysia
6. State Bank of Pakistan
7. Saudi Arabian Monetary Agency
8. Central Bank of Sudan (formerly known as Bank of Sudan)
9. Islamic Development Bank
Leadership of the IFSB
Professor Rifaat Ahmed Abdel Karim[14] [Secretary General] [From March 2003 To April 2011[15]]
Mr. Jaseem Ahmed [Secretary General] [From April 2011 To April 2017[16]]
Mr. Zahid ur Rehman Khokher [Acting Secretary General[17]] [From April 2017[18] To January 2018[19]]
Dr. Bello Lawal Danbatta [Secretary General] [From January 2018[20] To Incumbent]
Membership
As at June 2020, the 187 members of the IFSB comprise 79 regulatory and supervisory authorities, 9 international inter-governmental organisations, and 99 market players (financial institutions, professional firms, industry associations and stock exchanges) operating in 57 jurisdictions.[21]
Standards and Guiding Principles, Technical Notes and Guidance Notes
As on October 2020, the IFSB has issued 32 Standards & Guiding Principles, Technical Notes and Guiding Principles for various sectors of Islamic financial services industry. [22]
Standards and Guiding Principles[23]
| S. No. | Name of Publication | Project Leadership | Project Manager (s) | |
| Secretary General | Assistant Secretary General | |||
| 1. | IFSB-1 (December 2005)
Guiding Principles of Risk Management for Institutions (other than Insurance Institutions) offering only Islamic Financial Services (IIFS) |
Professor Rifaat Ahmed Abdel Karim | - | Mr. Abdullah Haron |
| 2. | IFSB-2 (December 2005)
Capital Adequacy Standard for Institutions (other than Insurance Institutions) offering only Islamic Financial Services (IIFS) |
Professor Rifaat Ahmed Abdel Karim | - | NIL |
| 3. | IFSB-3 (December 2006)
Guiding Principles on Corporate Governance for Institutions offering only Islamic Financial Services (Excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual Funds) |
Professor Rifaat Ahmed Abdel Karim | - | Mr. Madzlan Mohamad Hussain |
| 4. | IFSB-4 (December 2007)
Disclosures to Promote Transparency and Market Discipline for Institutions offering Islamic Financial Services (excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual Funds) |
Professor Rifaat Ahmed Abdel Karim | - | NIL |
| 5. | IFSB-5 (December 2007)
Guidance on Key Elements in the Supervisory Review Process of Institutions offering Islamic Financial Services (excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual Funds) |
Professor Rifaat Ahmed Abdel Karim | Mr. Abdullah Haron | NIL |
| 6. | IFSB-6 (December 2008)
Guiding Principles on Governance for Islamic Collective Investment Schemes |
Professor Rifaat Ahmed Abdel Karim | Mr. Madzlan Mohamad Hussain | |
| 7. | IFSB-7 (January 2009)
Capital Adequacy Requirements for Sukûk, Securitisations and Real Estate Investment |
Professor Rifaat Ahmed Abdel Karim | Mr. Abdullah Haron | NIL |
| 8. | IFSB-8 (December 2009)
Guiding Principles on Governance for Takâful (Islamic Insurance) Undertakings |
Professor Rifaat Ahmed Abdel Karim | Mr. Azli Munani | |
| 9. | IFSB-9 (December 2009)
Guiding Principles on Conduct of Business for Institutions offering Islamic Financial Services |
Professor Rifaat Ahmed Abdel Karim | Mr Idjarmizuan Ibrahim | |
| 10. | IFSB-10 (December 2009)
Guiding Principles on Sharî`ah Governance Systems for Institutions offering Islamic Financial Services |
Professor Rifaat Ahmed Abdel Karim | Mr. Madzlan Mohamad Hussain | |
| 11. | IFSB-11 (December 2010)
Standard on Solvency Requirements for Takâful (Islamic Insurance) Undertakings |
Professor Rifaat Ahmed Abdel Karim ( | Mr Azli Munani (until 30 September 2009)
| |
| 12. | IFSB-12 (March 2012)
Guiding Principles on Liquidity Risk Management for Institutions offering Islamic Financial Services |
Professor Rifaat Ahmed Abdel Karim (Secretary General) [Until April 2011]
|
Mr Zahid ur Rehman Khokher | |
| 13. | IFSB-13 (March 2012)
Guiding Principles on Stress Testing for Institutions offering Islamic Financial Services |
Professor Rifaat Ahmed Abdel Karim (Secretary General) [Until April 2011]
|
Mr. Jamshaid Anwar Chattha | |
| 14. | IFSB-14 (December 2013)
Standard On Risk Management for Takāful (Islamic Insurance) Undertakings |
Professor Rifaat Ahmed Abdel Karim (Secretary General) [Until April 2011]
|
Mrs Kartina Md Ariffin | |
| 15. | IFSB-15 (December 2013)
Revised Capital Adequacy Standard for Institutions Offering Islamic Financial Services Excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes] |
Professor Rifaat Ahmed Abdel Karim (Secretary General) [Until April 2011]
|
Mr Zahid ur Rehman Khokher | Mr Zahid ur Rehman Khokher
|
| 16. | IFSB-16 (March 2014)
Revised Guidance on Key Elements In The Supervisory Review Process of Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes) |
Mr. Jaseem Ahmed (Secretary General) | Mr. Jamshaid Anwar Chattha | |
| 17. | IFSB-17 (April 2015)
Core Principles for Islamic Finance Regulation (Banking Segment) |
Mr. Jaseem Ahmed (Secretary General) | Mr Zahid ur Rehman Khokher | Mr. Jamshaid Anwar Chattha
(until 15 October 2014)
|
| 18. | IFSB-18 (April 2016)
Guiding Principles for Retakāful (Islamic Reinsurance) |
Mr. Jaseem Ahmed (Secretary General) | Mr Zahid ur Rehman Khokher | Mrs. Kartina Md Ariffin
|
| 19. | IFSB-19 (April 2017)
Guiding Principles on Disclosure Requirements for Islamic Capital Market Products (Sukûk and Islamic Collective Investment Schemes) |
Mr. Jaseem Ahmed (Secretary General) | Mr Zahid ur Rehman Khokher
(until 6 August 2016) |
Mrs. Dian Dannira Skymmar
(until 10 September 2015) |
| 20. | IFSB-20 (December 2018)
Key Elements in the Supervisory Review Process of Takâful/Retakâful Undertakings |
Mr. Jaseem Ahmed
(until 14 April 2017) Dr. Bello Lawal Danbatta (from 29 January 2018) |
Mr. Zahid ur Rehman Khokher | Mrs. Kartina Md Ariffin
(until 24 July 2017) Mr. Ahmad Alrazni Alshammari (from 22 January 2018) |
| 21. | IFSB-21 (December 2018)
Core Principles for Islamic Finance Regulation [Islamic Capital Market Segment] |
Mr. Jaseem Ahmed
(until 14 April 2017) Dr. Bello Lawal Danbatta (from 29 January 2018) |
Mr. Zahid ur Rehman Khokher | Ms. Aminath Amany Ahmed
|
| 22. | IFSB-22 (December 2018)
Revised Standard on Disclosures to Promote Transparency and Market Discipline for Institutions Offering Islamic Financial Services [Banking Segment] |
Mr. Jaseem Ahmed
(until 14 April 2017) Dr. Bello Lawal Danbatta (from 29 January 2018) |
Mr. Zahid ur Rehman Khokher | Mr. Tarig Mohamed Taha Abdelgadir
Mr. Ateeq Ali (until 8 June 2017) |
Guidance Notes[24]
| S. No. | Name of Publication | Project Leadership | Project Manager (s) | |
| Secretary General | Assistant Secretary General | |||
| 1. | GN-1 (March 2008)
Guidance Note in Connection with the Capital Adequacy Standard: Recognition of Ratings by External Credit Assessment Institutions (ECAIs) on Sharî'ah-compliant Financial Instruments |
Professor Rifaat Ahmed Abdel Karim | Mr. Abdullah Haron | Mr Jamshaid Anwar Chattha |
| 2. | GN-2 (December 2010)
Guidance Note in Connection with the Risk Management and Capital Adequacy Standards: Commodity Murâbahah Transactions |
Professor Rifaat Ahmed Abdel Karim | Mr Jamshaid Anwar Chattha | |
| 3. | GN-3 (December 2010)
Guidance Note on the Practice of Smoothing the Profits Payout to Investment Account Holders |
Professor Rifaat Ahmed Abdel Karim | Mr Zahid ur Rehman Khokher | |
| 4. | GN-4 (March 2011)
Guidance Note in Connection with the IFSB Capital Adequacy Standard: The Determination of Alpha in the Capital Adequacy Ratio for Institutions (other than Insurance Institutions) offering only Islamic Financial Services |
Professor Rifaat Ahmed Abdel Karim | Ms Mashair Mohamed Ibrahim Sabir
| |
| 5. | GN-5 (March 2011)
Guidance Note on the Recognition of Ratings by external Credit Assessment Institutions (ECAIS) on Takâful and ReTakâful Undertakings |
Professor Rifaat Ahmed Abdel Karim | Mrs Kartina Md Ariffin | |
| 6. | GN-6 (April 2015)
Guidance Note on Quantitative Measures for Liquidity Risk Management in Institutions Offering Islamic Financial Services [Excluding Islamic Insurance (Takâful) Institutions and Islamic Collective Investment Schemes] |
Mr Jaseem Ahmed | Mr Zahid ur Rehman Khokher | Mr Erdem Oz |
| 7. | GN-7 (December 2019)
Guidance Note on Sharî`ah-compliant Lender-Of-Last-Resort Facilities |
Dr. Bello Lawal Danbatta | Mr. Zahid ur Rehman Khokher
(until 31 December 2018)
(until 30 August 2019) |
Mr. Tarig Mohamed Taha Abdelgadir |
Technical Notes[25]
| S. No. | Name of Publication | Project Leadership | Project Manager (s) | |
| Secretary General | Assistant Secretary General | |||
| 1. | TN-1 (March 2008)
Technical Note on Issues in Strengthening Liquidity Management of Institutions Offering Islamic Financial Services: The Development of Islamic Money Markets |
Professor Rifaat Ahmed Abdel Karim | Mr. Abdullah Haron | Mr. Idjarmizuan Ibrahim |
| 2. | TN-2 (December 2016)
Technical Note on Stress Testing for Institutions Offering Islamic Financial Services (IIFS) |
Mr. Jaseem Ahmed | Mr. Zahid ur Rehman Khokher | Mr. Syed Faiq Najeeb
|
| 3. | TN-3 (December 2019)
Technical Note on Financial Inclusion and Islamic Finance |
Dr. Bello Lawal Danbatta
(from 29 January 2018) |
Mr. Zahid ur Rehman Khokher
(until 31 December 2018) Dr. Jamshaid Anwar Chattha (until 30 August 2019) |
Mr. Syed Faiq Najeeb
(until 16 August 2019) |
Islamic Financial Stability Forum[26]
In its 15th Meeting held on 23 November 2009 in Kuala Lumpur, Malaysia, the Council of the IFSB resolved to establish the Islamic Financial Stability Forum as a platform for the IFSB member countries to discuss issues relating to the financial stability of the Islamic financial services industry.[27] Prominent industry experts, senior leadership of national and international institutions and thought leaders have presented their papers in the Islamic Financial Stability Forum since 2010 as follows:
| Year | City | Subject | Speaker |
| 2010 | Khartoum | Capacity Building in the Financial Sector: Strategies for Strengthening Financial Institutions | Professor Volker Niehaus
Former President University of Marburg, Germany and IFSB Consultant |
| 2010 | Jeddah | Liquidity Management in Institutions Offering Islamic Financial Services | Daud Vicary Abdullah
Global Islamic Finance Leader, Deloitte |
| 2011 | Amman | Macroprudential Surveillance and the Role of Supervisory and Regulatory Authorities | H.E. Shahid Hafiz Kardar
Governor, State Bank of Pakistan |
| 2011 | Kuala Lumpur | Implementation of an Islamic Deposit Insurance System for the Islamic Financial Services Industry | Md Khairuddin Hj Arshad
Chief Operating Officer, Malaysia Deposit Insurance Corporation |
| 2011 | Kuala Lumpur | Lender of Last Resort in Islamic Banking | Dr. Halim Alamsyah
Deputy Governor, Bank Indonesia |
| 2012 | Manama | Development of Effective Insolvency Regimes for Islamic Financial Institutions | Vijay Tata
Chief Counsel of the Finance, Private Sector and Infrastructure Practice Group, The World Bank |
| 2012 | Manama | Crisis Management in the Islamic Financial Services Industry | Paul Koster
Chief Executive, Dubai Financial Services Authority |
| 2012 | Jeddah | Developing A Platform For Consumer Protection In The Islamic Financial Services Industry | Dr Nik Ramlah Mahmood
Deputy Chief Executive, Securities Commission Malaysia |
| 2013 | Doha | Financial Reforms in Response to the Global Financial Crisis: Lessons for Islamic Finance in Ensuring Financial Stability | H.E. Dr Zeti Akhtar Aziz
Governor, Bank Negara Malaysia |
| 2014 | Bandar Seri Begawan | Implementation of the IFSB Standards and Guiding Principles: Overview and Challenges | Jaseem Ahmed
Secretary-General, Islamic Financial Services Board
Assistant Secretary-General, Islamic Financial Services Board |
| 2014 | Kuala Lumpur | Preserving the Soundness and Stability of the Islamic Financial Services Industry: The Development of a Financial Safety Net Infrastructure | Jaseem Ahmed
Secretary-General, Islamic Financial Services Board
Assistant Secretary-General, Islamic Financial Services Board |
| 2015 | Jakarta | Comparative Study on the Implementation of the IFSB Standards: Cross-country Assessment | Zahid ur Rehman Khokher
Assistant Secretary-General, Islamic Financial Services Board Peter Casey Consultant, Islamic Financial Services Board |
| 2016 | Cairo | Consumer Protection in Islamic Finance | Professor Dr. Volker Nienhaus
Former President of the University of Marburg, Germany, and Consultant to the Islamic Financial Services Board |
| 2017 | Kuala Lumpur | Recovery, Resolution and Insolvency for Institutions Offering Islamic Financial Services | Dr. Michael J.T. McMillen
|
| 2019 | Kuala Lumpur | Islamic Finance and the SDGs: Financial Stability Perspectives | Abayomi A. Alawode
Head of Islamic Finance, Finance, Competitiveness and Innovation Global Practice, The World Bank Group |
| 2019 | Dhaka | Challenges & Opportunities in Global Islamic Finance Industry Stability | Henry MacNevin
Associate Managing Director, Banking EMEA Moody’s Investors Service Limited
Vice President – Senior Credit Officer Moody's Financial Institutions Group |
Working Papers[28]
IFSB has been also issuing working papers since 2014. A list of published working papers, as on October 2020, is provided below:
| Working Paper Title | Date of Issuance |
| WP-01: Working Paper on Strengthening the Financial Safety Net: The Role of Sharī`ah-compliant Lender-of Last-Resort (SLOLR) Facilities as an Emergency Financing Mechanism | April 2014 |
| WP-02: Working Paper on Evaluation of Core Principles Relevant to Islamic Finance Regulation | November 2014 |
| WP-03: Working Paper on Financial Consumer Protection in Islamic Finance | October 2015 |
| WP-04: Comparative Study on the Implementation of Selected IFSB Standards | October 2015 |
| WP-05: The IFSB-ISRA Joint Working Paper on Sharīʻah Non-Compliance Risk in the Banking Sector: Impact on Capital Adequacy Framework of Islamic Banks | March 2016 |
| WP-06: Strengthening the Financial Safety Net: The Role and Mechanisms of Sharīʻah Compliant Deposit Insurance Schemes | March 2016 |
| WP-07: Recovery, Resolution and Insolvency Issues for Institutions Offering Islamic Financial Services | December 2017 |
| WP-08: Issues Arising From Changes in Takâful Capital Requirements | July 2018 |
| WP-09: Consumer Protection in Takāful | January 2019 |
| WP-10: Risk Sharing in Islamic Banking | May 2019 |
| WP-11: Investigating Intersectoral Linkages in Islamic Financial Services Industry | May 2019 |
| WP-12: Joint IFSB–AMF Working Paper on Money Laundering and Financing of Terrorism (ML/FT) Risks in Islamic Banking | December 2019 |
| WP-13: Intermediaries in the Islamic Capital Market | December 2019 |
| WP-14: Regulatory and Supervisory Issues in Sharīʻah-Compliant Hedging Instruments | December 2019 |
References
- "Company Overview of Islamic Financial Services Board". Bloomberg. Retrieved 3 August 2017.
- "Islamic Financial Services Board Islamic Financial Services Board". Linked In. Retrieved 3 August 2017.
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- "Background". The Islamic Financial Services Board (IFSB). Archived from the original on 19 August 2015. Retrieved 2 August 2017.
- "Islamic Financial Services Board - IFSB". Investopedia. Retrieved 2 August 2017.
- "Islamic Financial Services Board (IFSB)". www.ifsb.org. Retrieved 2020-10-29.
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- "Sasana Kijang and Lanai Kijang | Bank Negara Malaysia | Central Bank of Malaysia". www.bnm.gov.my. Retrieved 2020-10-29.
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- Islamic Finance: The Regulatory Challenge. John Wiley & Sons. 2007. p. 3. Retrieved 3 August 2017.
- The Developing Role of Islamic Banking and Finance: From Local to Global ... Emerald Group Publishing. 2014. p. 182. Retrieved 3 August 2017.
- "Islamic Financial Services Board (IFSB)". www.ifsb.org. Retrieved 2020-10-29.
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- "Asia ripe for Islamic finance as fintech comes to the fore". Nikkei Asia. Retrieved 2020-12-15.
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Books
- Khan, Muhammad Akram (2013). What Is Wrong with Islamic Economics?: Analysing the Present State and Future Agenda. Edward Elgar Publishing. Retrieved 26 March 2015.
- Jamaldeen, Faleel (2012). Islamic Finance For Dummies. John Wiley & Sons. ISBN 9781118233900. Retrieved 15 March 2017.