Search Results

You are looking at 1 - 4 of 4 items for :

  • "IB depositor" x
Clear All
International Monetary Fund
This paper discusses the need for ensuring financial stability in countries with Islamic Banking (IB). IB continues to grow rapidly, in size and complexity, posing a challenge to supervisory authorities and central banks. The legal environment within which IBs operate can be complex and challenging and may have implications for financial stability. IBs operate in diverse legal environments, some of which are more evolved than others in providing strong legal underpinnings for IB. International governance standards apply to IB but need to be customized to consider IBs’ distinct governance features. Significant progress has been achieved in developing prudential standards for IB, although broader implementation and more consistent application are needed. Progress has been slow in developing IB’s liquidity management and money markets. In recent years, hybrid financial products in IB have emerged that replicate aspects of conventional finance in an IB context, raising financial stability concerns. The IMF has played an important role in promoting financial stability in IB jurisdictions, working closely with IB standard setters, and international organization to shape IB standards and promote best practices.
International Monetary Fund

conventional banking, through dedicated stand-alone IBs, 16 or through IB subsidiaries or windows 17 of conventional banks ( Box 6 ) . The need for the separation of IB from conventional banking arises for two main reasons: (a) The perceived need to guard against the comingling of funds that are raised separately for Islamic and conventional banking activities : IB depositors and investors need to be assured that income earned on their deposits and investments are generated from banking activities that are compliant with IF norms. (b) The risk of regulatory

International Monetary Fund. Middle East and Central Asia Dept.

the form of the Islamic Banking Department (IBD), Shari’ah Board of the Central Bank and the Shari’ah Boards of Banks. The IBD can escalate unresolved issues to the Shari’ah Board of the central bank to resolve conflicts between banks, the Shari’ah board and the regulator. 150. Pakistan is in the process of developing a deposit insurance framework . The Deposit Insurance Corporation Act, presently with the Parliament for enactment provides coverage for IB depositors. E. Conclusions and Policy Issues 151. The experience of Pakistan offers important

International Monetary Fund. Middle East and Central Asia Dept.
This paper presents country experiences with reforms to strengthen regulatory oversight of the Islamic banking sector. Based on the selected country experiences, a number of important lessons and policy options can be drawn that have implications for the stable and sound development of Islamic banking. An enabling regulatory and institutional framework and a level playing field for conventional and Islamic banks is critical for the sound and stable growth of the Islamic banking industry. The country experiences also underscore the importance of providing an enabling framework while letting market forces determine the size of the industry.