Wednesday, 29 April 2015

Islamic finance body IFSB launches industry indicators

The Islamic Financial Services Board (IFSB) has launched a databank of industry indicators covering 15 member countries, helping shed new light on the size and shape of the sharia-compliant banking sector.
The Kuala Lumpur-based IFSB, one of the main standard-setting bodies for Islamic finance, is supporting a range of initiatives to improve supervision of the sector as it achieves greater prominence in several Muslim-majority countries.
The 188-member IFSB added financial inclusion to the industry's agenda this month and released final guidance on liquidity management for Islamic banks.
The IFSB collected data directly from regulatory bodies and plans to update figures on a quarterly basis, while adding more countries and sectors, it said in a statement.
For the initial 15 countries, a total of 207 Islamic banking institutions were identified, which held a combined $1.18 trillion in assets and had 10,711 branches as of 2013.
Country-specific data also provides a rare insight into Islamic banking practices in Saudi Arabia and Afghanistan, where official figures are hard to come by.
At the end of 2013, Saudi Arabia had 4 full-fledged Islamic banks and 8 Islamic windows, units of conventional banks that offer sharia-compliant financial services.
Islamic lenders in the kingdom rely heavily on murabaha, a cost-plus mode of financing, which represents 62.4 percent of total financing for full-fledged Islamic banks and 86.7 percent for Islamic windows.
In contrast, Afghanistan had 6 Islamic windows and no full-fledged Islamic banks, relying on a profit-sharing contract known as musharaka for 53.3 percent of total financing.
The data also covers Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Jordan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Sudan, and Turkey.

The IFSB indicators are being developed with technical assistance from the Asian Development Bank and the Islamic Development Bank. 
(Reuters / 27 April 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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