| 04 Mar 2010 |
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Experts say central banks should do more to regulate Islamic banks' work
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DEAD SEA - Bankers on Wednesday urged central banks in Arab and Islamic countries to increase their role in issuing laws and rules to regulate the work of Islamic-based financial institutions.
The recommendations were made at the conclusion of the two-day first Islamic Finance and Investment Forum for the Middle East, which took place in the Dead Sea and brought about over 350 bankers and experts from over 15 countries.
The participants also called for training human resources in the field of Islamic banking and finance to support the industry, which according to the experts enjoys "major" potential for growth and opportunities.
They underlined the need that the Islamic banking standards are in line with international standards, a matter that they said will help increase the Islamic finance activities at global level, especially that the share of the Islamic banking sector stands at about 1 per cent only of all global banking activities.
According to Mohammad Abu Hammour, minister of finance, the Islamic banking sector witnesses an annual growth rate of 10-15 per cent and there are currently over 300 Islamic banks in more than 50 countries. There are also more than 250 investment funds that operate in accordance with Sharia rules, with total assets of about $850 billion.
At yesterday's session, Central Bank of JordanCentral Bank of Jordan
(CBJCBJ) Deputy Governor Kholoud Saqqaf said the Islamic banking industry is witnessing an increasing attention in light of the current global financial crisis as the Islamic banks were more solid in facing the crisis for many reasons, especially that these banks avoid investing in derivative that were the reason behind the current crisis.
"The CBJCBJ
implements unified monitoring standards on Islamic and conventional banks, but it takes into account some issues related to the work of Islamic banks, especially in management of liquidity risks and credit risks," she said.Saqqaf said the CBJCBJ currently implements auditing standards by the Accounting and Auditing Organisation for Islamic Financial Institutions on Islamic banks in the Kingdom since 2000.
She added that the CBJCBJ is currently studying standards issued by the Islamic Financial Services Board in preparation for implementing them on Islamic banks.
In Jordan, there are currently two Jordanian Islamic banks with assets amounting to around 11 per cent of the total assets of the banking system, deposit with a market share of around 12.5 per cent of total bank deposits, and credit facilities accounting for around 15 per cent of total credit extended by all financial institutions.
By Mohammad Ghazal
© Jordan Times 2010
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