News Brief: IMF Facilitates Establishment Of Islamic Financial Services Board

IMF News, May 1, 2002

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Published: May 1, 2002

Purpose and rationale

Responding to the growing significance of the Islamic financial services industry in many countries.
Purpose: promoting, disseminating, and harmonizing best practices in the regulation and supervision of the Islamic financial services industry.

Agreed institutional outcome

Agreement reached on April 21, 2002, at the International Monetary Fund to establish the Islamic Financial Services Board (IFSB).
The IFSB will serve as an association of institutions responsible for the regulation and supervision of the Islamic financial services industry.

Mandate and core functions of the IFSB

Set and disseminate standards and core principles-as well as adapt existing international standards-for supervision and regulation, consistent with the Sharia'a principles governing the industry, and for voluntary adoption by member countries.
Liaise and cooperate with other standard-setters in the areas of monetary and financial stability.
Promote good practices in risk management in the industry through research, training, and technical assistance.

Headquarters and governance steps

The IFSB will be headquartered in Kuala Lumpur, Malaysia.
At the April 21 meeting, participants agreed to establish a Steering Committee headed by H.E. Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia, to undertake the necessary steps for the establishment and inauguration of the IFSB in Kuala Lumpur.

Process and facilitation

The decision to establish the IFSB is the culmination of an extensive two-year consultative process initiated by governors and coordinated by the IMF, in collaboration with the Islamic Development Bank and AAOIFI.
The IMF convened several consultative meetings to facilitate the exchange of views among governors on the objectives and structure of the IFSB.
The April 21 meeting was attended by several observers and facilitators from the IMF and central banks.

Participating governors and senior officials at the April 21 meeting

1. H.E. Shaikh Ahmed bin Mohammed Al Khalifa, Governor, Bahrain Monetary Agency; 2. Dr. Achjar Iljas, Deputy Governor, Bank of Indonesia; 3. H.E. Dr. Mohsen Noorbakhsh, Governor, The Central Bank of the Islamic Republic of Iran; 4. H.E. Sheikh Salem Abdul Aziz Al-Sabah; Governor, Central Bank of Kuwait; 5. Dr. Nasser Saidi, Vice Governor, Bank of Lebanon; 6. H.E. Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia; 7. H.E. Dr. Ishrat Husain, Governor, State Bank of Pakistan; 8. H.E. Hamad Al-Sayari, Governor, Saudi Arabian Monetary Agency; 9. The Hon. Dr. Sabir Mohamed Hassan, Governor and Chairman of the Board, Bank of Sudan; 10. H.E. Sultan Bin Nasser Al Suwaidi, Governor, Central Bank of the United Arab Emirates; 11. Dr. Ahmed Abisourour Acting Director, Islamic Banks' Office (IBO), IDB; and 12. Prof. Rifaat Ahmed Abdel Karim, Secretary-General, AAOIFI.

Media and contact details (IMF External Relations Department)

E-mail: publicaffairs@imf.org
E-mail: media@imf.org
Fax: 202-623-6278
Phone: 202-623-7100

IMF EXTERNAL RELATIONS DEPARTMENT, May 1, 2002.