Home About Kuna Advertise Contact Us Kuna's Bureaus Services KUNA training center Term Of Use
Register Login
facebook Twitter Youtube rss
Saudi Arabia deeply concerned over situation in Syria's E. Ghouta      Trump hosts listening session with students, teachers on schools' safety      White House strongly condemns attacks in Eastern Ghouta      UN Charter remains foundation of int'l relations - Guterres      Germany calls on Russia, Iran to pressure Damascus for a ceasefire in Ghouta
  Economics
Will Kuwait need Shari'ah board for Islamic banks?
24/06/2015 | LOC17:13
14:13 GMT
| Kuwait News
تصغير الخطالشكل الأساسيتكبير الخط
KUWAIT, June 24 (KUNA) -- The wide growth and expansion of Islamic Finance have imposed a challenge for economic decision makers worldwide, especially central banks, for legalizing the industry and promoting it to keep pace with the world criteria of transparency and governance.
The International Monetary Fund (IMF) has recently issued a survey under "Islamic Finance: Opportunities, Challenges, and Policy Options" depicting a host of challenges of the industry, as well as offering proposals to countries with Islamic banks.
One major proposal of the study is to establish a Shari'ah Supervisory Board (SSB).
According to the IMF, ensuring Shari'ah compliance in Islamic banking is a major challenge.
The ethicalآ­based fastآ­growing sector still lacks regulatory and supervisory frameworks catering to its unique risks, the IMF said, noting that it has so far been governed mostly by frameworks developed for .conventional finance. In addition, crossآ­border operations of Islamic financial institutions have expanded considerably without regulatory harmonization.
Regulators do not always have the capability (or willingness) to ensure that banks have in place a sound framework for Shari'ah compliance-nor do they take responsibility for assessing whether Shari'ah advisors are fit and proper, the IMF said.
Moreover, differences in Shari'ah interpretation can lead to a lack of harmonization both within and across borders, which could affect trust in the industry. Thus, it recommends establishing, at the bank level, an independent Shari'ah Supervisory Board (SSB).
Bahrain has recently announced founding a central Shari'ah body to supervise the products of Islamic Finance and set rules to boost governance in the sector.
Does Kuwait need one SSB? CEO of the Kuwait Finance House (KFH), Mazin Al-Nahedh welcomed the idea, saying such central supervisory body is likely to overcome the differences over financing products of Islamic banking, as it will set the rules to be adopted, Al-Nahedh told KUNA.
IMF's expert Zeid Zidane had told KUNA that central banks in countries with Islamic banking have their internal Shari'ah boards. But they are only confined to examining products of Islamic banks.
The role of such boards has to expand to the whole sector to speed up developing new products and enhance investors' confidence, Zidane added.
The IMF official noted that the Central Bank of Oman announced last October the formation of a SSB, and the UAE said it would have a central supervisory body.
For his part, former head of Islamic economy department at the College of Administrative Sciences, Kuwait University, professor Abdullah Al-Maousherji told KUNA that there are many Kuwaiti institutions that have long history in Islamic banking.
Al-Maousherji welcomed the idea of setting up a central Shari'ah board to be entrusted with supervising Islamic banking in the country. The scholars' body will work under supervision of the Central Bank of Kuwait.
He explained that the remarkable progress of Islamic Finance, both on the local and the international scenes, has necessitated the creation of such Shari'ah supervisor, to counter any future developments, as the world economy has been suffering from structural and organizational crises.
In addition, Al-Maousherji called for issuing a sukuk law, developing new products and varying the sectoral investments of Islamic banks.
He noted that almost half the Kuwaiti banks are Shari'ah-compiled.
Islamic finance has doubled in size over the past four years and is now worth more than USD2 trillion (1.76 .trillion euros) as demand for its products rises rapidly.
The sector constitutes 15 percent of the banking assets in 10 world countries, 50 percent in Saudi Arabia, 30آ­40 in Kuwait, 20آ­50 in the rest of the Gulf states.
Iran and the Sudan adopts full Islamic systems, the IMF survey has revealed that the Islamic finance faces major challenges if it is to unlock its huge potential and develop safely. (end) fnk.fs.msa
 Print
  Email
 Save
Share
Share
Kuwait
Photos from GCC Summit
Photos from GCC
share your photos Kuwait Vision
Vote for best photo for 2017
Kuwait Reader
Kuwait Vision
 
News Brief
 


KUNA publishes a book titled (His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah: A Humanitarian Leader) to commemorate the UN honoring of Kuwait's leader

 
Most Read Most Emailed  
1.   Kuwaiti oil price down by 62 cents to USD 60.80 pb
2.   USD rate stable at KD 0.299
3.   Today in Kuwait's history
4.   Photo of the Day
5.   Kuwaiti flag hoisted over ministries, public institutes
6.   White House strongly condemns attacks in Eastern Ghouta
 
 
kuna magazien

 
Publications

 
WEATHER
PRAYER
CURRENCIES
KUWAIT AIRPORT
About KUNA KUNA SERVICES USEFUL LINKS KUNA ARCHIVE KUNA PUBLICATIONS
Home
About Kuna
Advertise
Contact Us
Kuna's Bureaus
Services
KUNA training center
Term Of Use
Read The Whole Newscast
Pictures (during the week)
FTP Service
KUNA Reader
SMS Services
kuwait in memory of day
Job Application
Careers
Arab News Agencies
International News Agencies
Governmental Institutes
other useful links
Prayer Times
News Archive
Other News Services
Today In Kuwait's History
Events
Training Sessions
Videos
All KUNA right are reserved © 2012. This site is designed and published by IDS