Saudi Aramco IPO may more than Quadruple Islamic Finance Industry Size.
Current estimates of the size of the global Islamic finance industry range from $1.66 trillion to $2.1 trillion. Recent announcements from Saudi Aramco may be about to give these numbers a supersized boost with a potential valuation and IPO of up to $10 trillion.
South Korea’s central bank has joined the Islamic Financial Services Board (IFSB), one of the main standard-setting bodies for Islamic finance, as regulators across Asia build closer ties to the growing industry.
Guidelines issued by the Kuala Lumpur-based IFSB are gaining prominence as the industry takes a greater share of the banking sector in several majority-Muslim countries and expands into new markets.
The recent decision by South Korea's central bank to join the Islamic Financial Services Board (IFSB), one of the main standard-setting bodies for Islamic finance, as well as Japan's Bank for International Cooperation’s proposal to issue ringgit sukuk shows a second wave of interest in Islamic Finance for the East Asian economic powerhouses.
Takaful operators like Syarikat Takaful Malaysia Bhd and Takaful Ikhlas Sdn Bhd, a unit ofMNRB Holdings Bhd, are aggressively strategising their operations to ensure profitable growth and taking advantage of the five-year time frame given to composite takaful players to fully comply with the new Islamic Financial Services Act (IFSA).
Under the Financial Services Act (FSA) and IFSA, which came into force on July 1, composite insurers and takaful players would be, among others, required to split their life and general insurance businesses under separate licences.
The regulatory and supervisory framework of Malaysia enters a new stage of its development as the Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA) come into force on 30 June 2013.
The FSA and IFSA is the culmination of efforts to modernise the laws that govern the conduct and supervision of financial institutions in Malaysia to ensure that these laws continue to be relevant and effective to maintain financial stability, support inclusive growth in the financial system and the economy, as well as to provide adequate protection for consumers.
A standard contract template for Islamic inter-bank transactions was launched on Monday as the industry works to diversify the range of liquidity management solutions available.
The latest standard is part of efforts being made to harmonise industry practices by the Bahrain-based International Islamic Financial Market (IIFM), a non-profit industry body which develops specifications for Islamic finance contracts.
The European Central Bank and the Malaysia-based Islamic Financial Services Board (IFSB) are conducting a joint study on policies affecting Islamic finance in Europe, the IFSB's top official told Reuters.
"We are doing a joint study with Europe's central bank which brings together European scholars and regulators to examine a broad set of policy and regulatory issues in relation to Islamic finance in Europe," said IFSB secretary-general Jaseem Ahmed.
The soon to be introduced Islamic Financial Service Act 2012 (IFSA 2012) will make Malaysia one of the few countries in the world where the Islamic regulator is given a mandate to promote Shariah compliance among Islamic financial institutions, said a former senior official of Bank Negara Malaysia (BNM).
The implementation of the Malaysian-based Islamic Financial Services Board (IFSB) rules and regulation among central banks should be made mandatory to bring the industry to the next level, said Bahrain Central Bank executive director Khalid Hamad. He said mandatory rules and regulation would help the industry to grow better and avoid disagreement on syariah adherence.
“If you want any industry to grow, you need proper rules and regulations, proper standards be it accounting, practice or prudential and skilled resources,” he told reporters here yesterday.
A Memorandum of Understanding (MOU) to facilitate international cooperation between the Islamic Financial Services Board (IFSB) and the Asian Development Bank (ADB) in promoting the development of Islamic finance in common developing member countries was signed today at the ADB headquarters in Manila.