Manama: Bahrain looks to be extremely serious for boosting Islamic Finance in the gulf state as well as worldwide as it is making suggestions for the advancement in the sector. A suggestion has strongly been made by a top government executive that Bahrain and others should adopt the rule and regulations of the Malaysian-based Islamic Financial Services Board (IFSB) if they wants to progress in Islamic Finance.
Bahrain Central Bank Executive Director, Khalid Hamad, said that the implementation of the Islamic Financial Services Board (IFSB) rules and regulation among central banks should be made mandatory to bring the industry to the next level.
He said that mandatory rules and regulation would help the industry to grow better and avoid disagreement on Shariah 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 said while talking to told reporters in Manama.
He said that IFSB’s role is equivalent to that of the Basel committee as the guidelines issued by the board is of the same standards as those issued under a conventional system.
However, he said, the establishment of the IFSB did not require mandatory adherence by member countries to the guidelines as it was done on a voluntarily basis.
Hamad commented, “Sooner or later this has to change. IFSB has to change with the acceptance of all their members. The moment it becomes mandatory then it will serve the purpose better.”
Meanwhile, commenting on the development of Islamic finance, he said that the industry’s growth in the region, as well as Africa, is encouraging.
Instead of considering the industry’s development in other countries as a threat to Bahrain’s ambition of becoming an Islamic financial hub, he considers it as complementing each other and creating cross borders business opportunities for the industry’s key players.
Hamad said, “If you focus in one country, there will not be enough business opportunities. (Also) there are openings in some highly populated African countries where there are many Muslims and massive opportunities for Islamic finance investment.”
IFSB, which started operations in 2003, is an international organization that issues guiding principles and standards within the banking insurance and capital market sectors in order to promote stability in the Islamic financial services industry.