Rabat - The Executive Board of the International Monetary Fund (IMF) conducted its first formal review of the Islamic Bank on February 3, adopting a series of proposals regarding the IMF's role in this area.
Rabat – The Executive Board of the International Monetary Fund (IMF) conducted its first formal review of the Islamic Bank on February 3, adopting a series of proposals regarding the IMF’s role in this area.
The Islamic Bank’s directors agreed with the IMF staff proposal to establish and provide advice on Islamic banking issues in the oversight context of program design and building capacity activities.
In order to address the current gaps in international regulation of Islamic banks, the directors also called on IMF staff to continue to support the work of other standard-setting bodies and international organizations.
To this end, Islamic Banks consider it justified to take into consideration a proposal that formally recognizes the “Guidelines for the regulation of Islamic finance (banking segment)” established by the Islamic Financial Services Council which would align with e IMF and World Bank standards and codes initiative. The directors are awaiting a formal proposal to be submitted for Board approval in the context of a forthcoming document by the end of April 2018.
The directors emphasized the importance for countries with Islamic banks to continue to work with relevant international bodies on the conception of legal regimes and institutional arrangements for the effective resolution of Islamic banks. They also recommended the implementation of deposit-guarantee schemes to fight against money laundering and the financing of terrorism, as well as the adaptation of the conventional mechanism of the lender of last resort to the Islamic bank.
Directors also agreed that the availability of high-quality liquid assets for Islamic banking is important for effective liquidity management, financial stability, and the sustainable development of Islamic banking in general.
In this context, they called for a renewed effort to develop Sukuk markets, noting the importance of establishing appropriate liquidity mechanisms and instruments at the central bank level.