TOKYO, Dec 11 (KUNA) -- The Asian Development Bank (ADB) said Tuesday it
will help grow access to Islamic finance in Afghanistan, Bangladesh,
Indonesia, and Pakistan with a USD 750,000 technical assistance grant.
In response to requests for assistance from the governments of the four
countries, the grant will be used, amongst others, to develop an e-module
platform to build capacities of officials in those countries on prudential
standards developed by the Islamic Finances Services Board (IFSB), the
Manila-based lender said in a press release.
Bank Negara Malaysia has agreed to share their experience in implementing
standards to assist their regional peers, the ADB said.
"Islamic finance can provide access to the unbanked and promote financial
stability through development of an alternative asset class. This can help
diversify the finance sector in developing Asia," said Sani Ismail, ADB's
Financial Sector Economist.
An action plan will also be drawn up to develop Islamic capital markets in
participating developing countries, the ADB said, adding that the plan will
focus on harmonizing disclosure requirements of Islamic capital markets
products, developing Islamic collective investment schemes, and recommending
tax treatment of Islamic capital market products.
It marks ADB's first technical assistance provided to support Islamic
finance following the recent signing of a Memorandum of Understanding between
the ADB and the IFSB in October.
Islamic finance refers to financial transactions that are consistent with
sharia (Islamic law), resting on principles such as the materiality of
transactions and mutual risk sharing. It includes banking, takaful (Islamic
insurance) and sukuk (Islamic financial certificate).
Interest in Islamic finance has grown steadily, despite the downturn in the
global financial crisis, with estimates that Islamic banking assets globally
will reach USD 1.1 trillion in 2012, according to the ADB.
The ADB is a multilateral development finance institution dedicated to
reducing poverty in Asia and the Pacific. Established in 1966, it has now
owned by 67 members, mostly from the region, as well as the US, the UK and
The Kuala Lumpur-based IFSB is an international standard-setting
organization that promotes and enhances the soundness and stability of the
Islamic financial services industry.
As of March, the 187 members of the IFSB comprise 53 regulatory and
supervisory authorities, eight international inter-governmental organizations
and 126 market players, professional firms and industry associations.
Kuwait's Central Bank and seven other financial institutions, including
Kuwait Finance House and Boubyan Bank, are its members. (end)
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