Islamic Financial Services Board (IFSB)

The Islamic Financial Services Board (IFSB) is an international Islamic body established in Kuala Lumpur in November 2002 by a group of central banks in the Member countries, the Islamic Bank and the World Bank, and a number of international financial institutions as associate members.

The Board was established as a result of a two-year wide consultation process, which was initiated by a group of senior officials from central banks and monetary authorities of several countries combined, with the support of the Islamic Development Bank, the International Monetary Fund and the Accounting and Auditing Commission for Islamic financial institutions.

The Board is an international recognition of Islamic banking services, with the aim of coordinating with the central banks and Islamic financial institutions to issue regulatory standards for Islamic banking, which is based on the rules of Sharia and international norms.

IFSB aims to promote the development of an Islamic financial services industry that is characterized by vigilance and transparency through the introduction of existing or new international standards that are consistent with the principles of Islamic banks.

The Islamic Financial Services Board provides its services as a body for the preparation of international standards for regulatory and supervisory agencies that have a special interest in ensuring the acceptance and consolidation of the Islamic financial services industry to include banking, capital market and insurance.

The Board encourages the development of the Islamic financial services industry rationally and transparently by introducing new standards or adopting what is existing in accordance with Shariah principles, and recommends that these standards be adopted, in accordance with the standards of the Basel Committee, the International Securities Commission and the supervisory insurance authorities.

The objectives of the Islamic Financial Services Board are:

• Supporting the development of the Islamic financial services industry.
• Achieving transparency through the introduction of new international standards or the adoption of existing ones in accordance with Islamic Sharia, and recommending adoption of these standards.
• To provide guidance in the effective supervision and regulation of institutions providing Islamic financial products and to develop the standards of the Islamic Financial services industry in terms of definition, measurement and disclosure of risks, taking into account international standards regarding evaluation, income and expenditure calculation, and disclosure.
• Communicating and collaborating with existing standards regulators that are relevant to the stability and acceptance of international criticism and financial regulations, as well as with the organizations of Member States.
• Support and coordinate initiatives to develop tools and procedures for effective operation and risk management.
• Encourage the participation of Member States in the development of the Islamic financial services industry.
• Facilitate the training and development of personal skills in areas related to the effective organization of the Islamic Financial services industry and its affiliated markets.
• Commitment to undertake research and publish studies and surveys on the Islamic financial services industry.
• Establishing a database on Islamic banks, financial institutions and industry experts.
• Any other objectives that may be approved by the General Assembly of the Islamic Financial Services Council from time to date.