Islamic finance body issues guidelines on capital adequacy, takaful
SYDNEY Dec 12 (Reuters) - The Kuala Lumpur-based Islamic Financial Services Board (IFSB) has published guidelines on capital adequacy for Islamic banks and risk management of takaful, or Islamic insurance, as the industry body expands its activity and membership base.
Guidelines from the IFSB, one of the main standard-setting bodies for Islamic finance, are gaining prominence as the industry takes a greater share of the banking sector in several majority-Muslim countries.
The IFSB released previous guidance relating to capital adequacy in 2005 and 2009 based on Basel II standards, but since then regulators have agreed on stricter Basel III standards which are being phased in over the next several years.
Revised guidelines detail criteria for using sukuk, or Islamic bonds, as Tier 1 and Tier 2 regulatory capital, a practice that has been pioneered in the past year by Islamic banks in the United Arab Emirates and Turkey.
Guidelines for takaful firms outline issues faced by Islamic insurers, including the risk that their products become non-compliant with sharia principles, and describe best practices to supervise their funds and disclose information.
Work now shifts to the IFSB's 16th guideline covering the supervision of Islamic finance institutions, helping tighten regulatory oversight of industry practices.
IFSB membership now stands at 185 after adding six members this week, including Indonesia's financial services authority and Libya's central bank.
The IFSB council, its policy-making body, will be chaired in 2014 by the managing director of Brunei's monetary authority, taking over duties from Qatar's central bank governor. (Editing by Jacqueline Wong)
- Malaysia military tracked missing plane to west coast: source |
- Malaysia air probe finds scant evidence of attack: sources |
- Ukraine forms new defense force, seeks Western help |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- Freescale loss in Malaysia tragedy leads to travel policy questions