Financial institutions and and other market players who are active in Islamic Finance are now increasing using the International Islamic Financial Market (IIFM) standards, a new survey finds. The survey carried out by IIFM, revealed during the 39th meeting of the Board of Directors of IIFM, however, pointed that despite the marked increase more penetration is still required to reach the desired implementation levels.
“IIFM has gained much credibility and has reached a stage of maturity with sound achievements today, however, there is still a burning need to get its Standards to be used more actively by wider market players which can only happen if there is a strong endorsement from regulators, particularly those in Islamic banking markets across GCC and Asia,” said Khalid Hamad Abdulrahman, Chairperson of IIFM.
The meeting was attended by representatives from its founding and permanent members namely the Central Bank of Bahrain, Bank Indonesia, Central Bank of Sudan, Autoriti Monetari Brunei Darussalam and the Islamic Development Bank as well as representatives of member financial institutions on the Board of IIFM.
To further improve the outreach of its Standards, translation of IIFM Standards in other languages starting with French, Bahasa Indonesia and Turkish languages was approved at the meeting and the Board also acknowledged the progress being made in collaborating with consultants and training institutes for providing training materials on IIFM Standards.
Two new Standards to be published soon by IIFM were also discussed at the meeting. It is expected that these Standard framework documentation relating to Trade Finance will pave the way in increasing Shari’ah-complaint trade related activity and will help the smaller institutions to participate in trade finance transactions generated by large institutions.
Other initiatives to be embarked upon by IIFM during 2019 were also considered favorably such as the development of standardized gold related documentation to be used by financial institutions active in Shari’ah-compliant gold business in collaboration with relevant international bodies.
“Collaboration with other Islamic and international standard-setting organizations is necessary as with combined efforts we can achieve greater unification and legal certainty to bring about more innovation, capacity building and market development”, said Ijlal Ahmed Alvi, Chief Executive Officer of IIFM.
The challenges facing development of an Islamic benchmark reference rate and the need for further research in this area was also deliberated at the meeting. IIFM will soon organize a roundtable discussion on this sponsored by The Waqf Fund (Bahrain).