Abu Dhabi – The Islamic Financial Services Board’s (IFSB) Summit 2017, themed “Reinvigorating the Momentum of Islamic Finance: Solidifying Resilience and Sustaining Growth”, started with Welcoming Remarks by H.E. Mubarak Rashed Khamis Al Mansoori, the Governor of the Central Bank of the United Arab Emirates (CBUAE). The one and half day IFSB Summit 2017 is being held in the St. Regis Abu Dhabi, on 23 and 24 October and is hosted by the CBUAE.
In his welcoming address, His Excellency Mubarak Rashed Khamis Al Mansoori, said: “It is heartening to note that Abu Dhabi is hosting the two-day IFSB Summit 2017. Home to eight Islamic banks, the UAE has taken unprecedented and successful steps in developing the Islamic banking sector.”
He added: “The Central Bank of the UAE supports the robust and long-term growth of the vital Islamic finance sector through issuing Islamic deposit certificates and providing a collateralised murābahah facility. This marginal lending facility aims to increase the capacity of Islamic banks to manage their liquidity while adhering to Islamic principles.”
In closing, His Excellency Mubarak Rashed Khamis Al Mansoori said: “In the UAE, the capital adequacy ratio of the Islamic banking system is in the range of 17 per cent – 16.7 per cent for tier 1 capital. Significantly over the mandatory 10 per cent, the sector’s liquidity assets ratio also registers 17 per cent. Today, Islamic banks in the UAE continue to build credibility and foster financial stability through their principled operations across the country.”
In his opening address, the Acting Secretary-General of the IFSB, Mr. Zahid ur Rehman Khokher, highlighted that significant progress has been made in Islamic finance on a number of fronts. He however, cautioned Islamic finance stakeholders from becoming complacent over the merits achieved during the past decade and noted that Islamic finance still remains a niche sector in a number of OIC countries. He further noted that the recent economic downturn also revealed the need for reinvigorating the momentum in Islamic finance to achieve a much larger, more robust and transparent market. He pointed out four critical factors to enable this revival in momentum: (1) achieving harmonisation in the legal and regulatory environment; (2) implementing strategies to enhance access of Islamic financial services’ to wider segments of the population and businesses, particularly small and medium enterprises (SMEs), through exploring and effectively utilising latest technological advancements; (3) focusing on value-based themes of Islamic financial products to develop a deeper level of products that appeal to consumers; and (4) addressing longstanding market infrastructure-related issues in relation to Islamic banking liquidity – for instance through linking sovereign/quasi-sovereign sukūk issuance programmes to national development programmes and broader monetary policy objectives. Mr. Khokher ended by reiterating the IFSB’s commitment, to continue supporting Islamic finance stakeholders through its standard-setting and research work, capacity-building initiatives and partnerships with other international organisations in the financial sector space.
The IFSB Summit 2017 also saw two high-profile keynote addresses. The first Keynote Address of the IFSB Summit 2017 was delivered by H.E. Abdullah bin Ahmed Al Saleh, Under-Secretary of the Ministry of Economy for Foreign Trade and Industry, UAE. In his address, H.E. Al Saleh lauded the IFSB’s significant initiatives since inception as an international standard-setting body for the Islamic financial services industry (IFSI). He discussed the significant opportunities available globally in the Islamic economic landscape not only for the Organisation of Islamic Cooperation (OIC) countries, but all participants of the world economy. He stressed on the need to develop good governance models in the Islamic economy and to learn from experiences of other countries in this regard. He noted that UAE has achieved much progress in Islamic finance over the years, and Islamic economy is expected to serve as an enabler for future post-oil phase parallel growth. He also appreciated the IFSB Summit, which serves as a useful platform for enabling technical knowledge-sharing and competencies for best practices in the Islamic finance industry. He viewed harmonised legal frameworks, standardised dispute resolution mechanisms and traction in growing sectors such as halal industry and FinTech/Digital platforms as key to advance the Islamic economics and finance agenda.
The second Keynote Address was delivered by Mr. Iqbal Ahmad Khan, Chief Executive Officer, Fajr Capital Limited, UAE who traced the historical perspective on the introduction of Islamic finance in the 1970s and 1980s, In the early days, the initiation of Islamic finance through a banking model was adopted in order to avoid presenting a wholly new concept that may lack credibility and avoid achieving critical mass. However, as Islamic finance has now achieved considerable traction in some countries, there is a need to focus on the asset-management model which is closer to the principles of Islamic finance. Furthermore, the industry needs to venture into newer sectors including Sharīʻah-compliant pension funds, endowments/awqaf, sovereign wealth funds, and so on. Mr. Khan noted that the Islamic finance industry has to create a “demonstration effect”, and various initiatives by the IFSB are reaching out to highlight the positive demonstration effect of Islamic finance. He further suggested two opportunities for the Islamic finance industry to build upon in the near future – the cooperative/mutual industry space and developing cooperative banking and solidifying takāful.
The two-day Summit (23 and 24 October 2017) continues with sessions covering topics such as:
- Panel Discussion on Islamic Finance: From Niche to Mainstream
- The FinTech Innovative Progression: Boon or Bane for Traditional Financial Institutions?
- Implementing New Regulatory Reforms: Balancing Between the Soundness and Competitiveness of Institutions offering Islamic Financial Services
- Islamic Capital Markets: Towards Greater Harmonisation in Cross Border Activities
- Wrap-up Session on The Way Forward for Islamic Finance: Strengthening Value Proposition, Sustaining Resilience
The IFSB Summit 2017 is being attended by key Islamic financial services industry leaders, from among regulatory and supervisory authorities and financial institutions from among the IFSB member organisations, as well as the local UAE financial community.
© Press Release 2017