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Islamic Banking

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Saudi electronic university

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The International Regulatory Bodies and Standards for Islamic Financial Institutions

(IFIs)

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ISLAMIC FINANCIAL INSTITUTIONS (IFIs) 2

The international regulatory bodies and standards for Islamic financial institutions (IFIs)

Islamic financial institutions are an essential part of the modern world economy subject

to similar economic laws like the other traditional financial market participants. Many people

and other traditional banks are starting to see Islamic banking and finance as a highly promising

business opportunity for investment. Statistics by Puri-Mirza (2021) assert that the number of

commercial Islamic Financial Institutions (IFIs) has been rising over the past few years. As of

the year 2019, the number of Islamic commercial banks was approximately 428 in the world.

However, over the same year, the total amount of assets for the international Islamic banking

institutions totaled about 1.99 trillion U.S dollars. This represents nearly 6 percent of the total

global banking assets owned by Islamic banks (Puri-Mirza, 2021). The primary operation of the

IFIs is different from the traditional banking systems. The primary focus of this paper is to

discuss the international regulatory bodies, framework, and standards for regulating Islamic

Financial Institutions.

Financial Intermediation in IFIs

The Islamic Banking Regulation and Supervision

Over the years, Islamic banking has experienced significant growth to become one of the

most important parts of world financial systems across many countries. Given the low base, low

penetration level, substantial market potential, and the strong demand in many Islamic countries

for Shariah-compliant products, Islamic banking stands a significant chance of growing and

expanding even more in the global economy hence more need for regulation of the sector.

Following the significance of this sector in many countries, the International Monetary Fund

IMF encounters various banking-related issues and therefore is expected to identify, access,

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1 The International Regulatory Bodies and Standards for Islamic Financial Institutions (IFIs) Student Name Course Name Institution Professor’s Name Date ISLAMIC FINANCIAL INSTITUTIONS (IFIs) 2 The international regulatory bodies and standards for Islamic financial institutions (IFIs) Islamic financial institutions are an essential part of the modern world economy subject to similar economic laws like the other traditional financial market participants. Many people and other traditional banks are starting to see Islamic banking and finance as a highly promising business opportunity for investment. Statistics by Puri-Mirza (2021) assert that the number of commercial Islamic Financial Institutions (IFIs) has been rising over the past few years. As of the year 2019, the number of Islamic commercial banks was approximately 428 in the world. However, over the same year, the total amount of assets for the international Islamic banking institutions totaled about 1.99 trillion U.S dollars. This represents nearly 6 percent of the total global banking assets owned by Islamic banks (Puri-Mirza, 2021). The primary operation of the IFIs is different from the traditional banking systems. The primary focus of this paper is to discuss the international regulatory bodies, framework, and standards for regulating Islamic Financial Institutions. Financial Intermediation in IFIs The Islamic Banking Regulation and Supervision Over the years, Islamic banking has experienced significant growt ...
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Tags: law standards regulatory bodies