Islamic Financial Services Board

The   Islamic Financial Services Board (IFSB) was officially inaugurated on  3 November, 2002.
Its establishment was the culmination of an extensive two-year consultative process initiated by a group of governors and senior officials of central banks and monetary authorities of various countries, together with the support of the Islamic Development Bank (IDB), the International Monetary Fund (IMF) and The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
         Malaysia, which is the host country of the IFSB, has enacted a law known as the Islamic Financial Services Board Act 2002, which gives the IFSB the immunities and privileges that are usually granted to international organizations and diplomatic missions.
               The Objectives of the IFSB are:
To promote the development of a prudent and transparent Islamic Financial Services industry through introducing new or adapting existing, international standards consistent with Shariah principles and recommend these for adoption.
To provide guidance on the effective supervision and regulation of institutions offering Islamic Financial products and to develop for the Islamic Financial services industry the criteria for identifying, managing and disclosing risks, taking into account international standards for valuation, income and expense calculation and disclosure. 
To liaise and cooperate with relevant organizations currently setting standards for the stability and the soundness of the international monetary and financial systems and those of the member countries.
To enhance and coordinate initiatives to develop instruments and procedures for efficient operations and risk management.
To encourage cooperation amongst member countries in developing the Islamic financial services industry.
To facilitate training and personnel development in skills in areas relevant to the effective regulation of the Islamic financial services industry and related markets.
To undertake research into and publish studies and surveys on the Islamic financial services industry.
To establish a database of Islamic bank, financial institutions and industry experts.
Any other objectives which the General Assembly of the IFS may agree from time to time.
 

         Islamic Financial Services Board (IFSB) has already issued 3 (three) prudential guidelines:

                      i. Guiding Principles on Corporate Governance for Institutions Offering only Islamic financial Services (Excluding Islamic Insurance (Takaful) Institutions and Funds).

                  ii. Capital Adequacy Standard for Institutions (other than Insurance Institutions of Islamic Financial Services).

                  iii. Guiding Principles of Risk Management for Institutions (other than Insurance offering only Islamic financial Services).