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19 May | Monday
IFSB-IRTI Released the Mid-Term Review of the Ten-Year Framework and Strategies for Islamic Financial Services Industry Development

19 May 2014, Mauritius – The "Ten-Year Framework and Strategies for Islamic Financial Services Industry(IFSI) Development: A Mid Term Review", a document jointly published by the IFSB and Islamic Research and Training Institute (IRTI), the research arm of the Islamic Development Bank Group (IDB),was launched during an IFSB-IRTI Session on Mid-Term Review of the IFSI Development: Ten-Year Framework and Strategies held in Mauritius today.

The session was held in conjunction with the 11th IFSB Summit, which is hosted by the Bank of Mauritius. It discussed the proposed measures to address the gaps or challenges in meeting the objectives of the Ten-Year Framework, as well as the roles of the public and private sectors and other stakeholders of the IFSI in carrying out the 16 recommendations, taking into account the state of development of the IFSI in the respective jurisdictions. The Ten-Year Framework was first published by the IFSB, IDB and IRTI in 2007 to provide a general blueprint or guideline for new and existing Islamic finance jurisdictions in designing and developing their national plans and initiatives as part of their financial sector development policies.

Earlier, in his opening remarks, Mr. Jaseem Ahmed, Secretary-General of the IFSB, welcomed the participants in the session and highlighted the transformation and growth of the IFSI in terms of deepening of assets, greater awareness, as well as increasing policy, regulatory and institutional support. These positive developments, coupled with the increasingly challenging economic and financial environments following the global financial crisis, as well as significant developments taking place in the international financial landscape, in particular with respect to further regulatory and supervisory reforms to promote global financial stability, necessitated the review of the Ten-Year Frameworkto ensure that it remains current, relevant and beneficial, and helps toprovide resilience and stability tothe IFSI moving forward. In this regard, the Mid-Term Review has benefittedfrom feedback from regulatory and supervisory authorities as well as consultation with market players and leading industry experts in various IFSB-IRTI events organised during the review exercise.

In the first session of the event, Prof. Dato’ Dr. Azmi Omar, Director General of IRTI, shared the objectives of the Mid-Term Review of the Ten-Year Framework, namely to (a) assess the impact on the respective Islamic finance segments arising from the development in the global financial system post-crisis; (b) examine the progress and current status of the priorities and initiatives; (c) identify the gaps involved in implementing the priorities and initiatives; and (d) assessthe need of a re-orientation of such priorities and initiatives. Distinct features of The Mid-Term Review prioritises a set of recommendations that are organised in three pillars: (a) Enablement: fostering conditions for the industry to thrive; (b) Performance: enhancing the effectiveness of institutions active in the industry; and (c) Reach: expanding the set of potential beneficiaries of the industry. Other distinct features of the Mid-Term Review are the development of Key Performance Indicators, introduction of three additional recommendations from 13 in the 2007 document to 16, and the establishment of a stronger implementation plan to be undertaken by a range of stakeholders.

The second session, themed “Updated Framework Recommendations: Enablement, Performance and Reach”, was chaired by Prof. Dato’ Dr. Azmi Omar, and consisted of Dr Badreldin Gurashi Mustafa, General Manager, Central Bank of Sudan,Zainal Izlan Zainal Abidin, Executive Director, Islamic Capital Market, Securities Commission Malaysia and Aamir A. Rehman, Managing Director, Fajr Capital, UAE. The session focused on proposed measures to address the gap or challenges in meeting the objectives of the 10-Year Framework, as well as adopting and utilising the Key Performance Indicators to help address weaknesses and monitor progress of the framework.

The panel focused on several initiatives that can be undertaken by Islamic finance jurisdictions to help finance the real sector of the economy, encourage financial inclusion, and ultimately grow the Islamic finance sectors, making it a mainstream industry instead of its current niche status. This can be achieved by, among others, developing a national strategy for Islamic finance, creating a level playing field for the industry, encouraging savings and investment by developing the Takaful, microTakaful and microfinance segments, innovating products with value propositions that clearly separate them from conventional products, developing capacity building at public, private and individual levels, as well as encouraging cross-border linkages at both the public and private sector levels. Having in place a set of Key Performance Indicators to track progress and performance is therefore crucial to ensure the objectives of the 10-Year Framework are met.

The third and final session entitled “Bringing the 16 Recommendations to Life: Concrete Initiatives and a Stronger Implementation Plan" saw a panel of speakers which consisted of Dr Bashir Aliyu Umar, Advisor to the Governor, Central Bank of Nigeria, Hussain Ali Sharaf, Director, Islamic Financial Institutions Supervision Directorate, Central Bank of Bahrain and and Muhammad Owais Ansari, Chief Operating Officer, FWU Global Takaful Solutions, UAE, discussing the roles of the public and private sectors and other stakeholders of the IFSI in driving implementation, as well as key initiatives to support the implementation of the Recommendations.

The panel shared their experience in developing the IFSI in terms of the three pillars of the Mid-Term Review of the Ten-Year Framework – Enablement, Performance andReach. They also stressed some of the factors that could contribute towards further development of the industry. These include the role of the private sector in influencing public sector policies in Islamic finance, cooperation and collaboration among the regulatory and supervisory authorities in terms of garnering technical support and developing human capital, initiatives to strengthen Islamic finance institutions and markets, greater awareness of Islamic finance products and services, and developing and offering Islamic finance products as an alternative solution across all segments of populations regardless of their religious beliefs.

The Report is now available for download from the IFSB and IRTI websites, www.ifsb.org.

For more information of these events, please visit www.ifsb.org.

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