Islamic Financial Infrastructure

Islamic Development Bank

       IDB supports the establishment of Islamic banks and financial institutions through equity participation. Worldwide, the Bank has equity investment in 29 Islamic financial institutions, both unlisted and listed on stock exchanges, amounting to a total of ID 94.35 million ($138.59 million). In 1426H (2005) the Bank participated in the capital increase of five financial institutions. Also in 1426H (2005), IDB made additional equity investment totaling ID 14.36 million ($20.73 million) in four Islamic banks in Bosnia & Herzegovina, Sudan, Indonesia, and Pakistan.

       The IDB Group supported the establishment of a re-takaful (insurance) company in the U.A.E. with participation through equity investment amounting to $12 million to support the trade financing operations of Islamic banks.

Islamic Internatinal Rating Agency (IIRA)

       The Islamic International Rating Agency (IIRA) is the sole rating agency established to provide capital markets and the banking sector in predominantly Islamic countries with a rating spectrum that encompasses the full array of capital instruments and specialty Islamic financial products, and to enhance the level of analytical expertise in those markets.

        IIRA’s augmented rating system recognizes and incorporates the unique features of Islamic finance in a way that broadens the quality perspective, which is a rating agency’s ultimate goal. This will facilitate to develop and deepen the capital markets in countries which IIRA wishes to serve.

       IIRA is also soliciting recognition of its ratings by regulators and has received formal recognition from Central Bank of Bahrain as an External Credit Assessment Institution (ECAI). IIRA is also on the list of approved rating agencies of Islamic Development Bank.

       In view of the nature of its activities, the presence of a rating agency should increase transparency in the market through its promotion of disclosure and knowledge of standards in other markets. It will enhance the investment decision process by educating investors in the use of ratings criteria and methodology utilized elsewhere.

       The Islamic International Rating Agency B.S.C. (IIRA) started operations in July 2005 to facilitate development of the regional and national financial markets by delineating relative investment or credit risk, providing an assessment of the risk profile of entities and instruments. This should be an integral part of the decision process employed by institutional investors.

       IIRA is sponsored by multilateral development institutions, leading banks, other financial institutions and rating agencies. Its shareholders operate from eleven countries which constitute the agency’s primary marketing focus.

       IIRA is structured in a way to preserve its independence. It has a Board of Directors and a completely independent Rating Committee.


Intrenational Islamic Financial Market (IIFM)

       IIFM was founded with the collective efforts of the Islamic Development Bank, Central Bank of Bahrain, Bank Indonesia, Central Bank of Sudan, Labuan Financial Services Authority (Malaysia), Autoriti Monetari Brunei Darussalam and State Bank of Pakistan. IIFM is further supported by a number of leading regional and international financial institutions and other market participants.

       The main strength of IIFM is pooling of expertise from banks, legal and other market participants who work together under the guidance of IIFM Shariah Advisory Panel to develop market standard products, documentation and related processes.

       IIFM current focus is:

  1. The standardization of Islamic Capital & Money Market products, documentation and related processes.
  2. To address the standardization needs of the industry IIFM brings the regulators, financial institutions, law firms and other market participants on a common platform through the creation of project specific global working groups and committees.

        To read more on IIFM – please follow the link:

 Legal framework and Governance for Islamic financial services

by Dr Engku

 Legal framework and Governance for Islamic financial services

by Dr John Lee

 IF industry and Global Sukuk market

 by KFH Research Ltd

Islamic Pricing Benchmarking

Research Paper

Dow Jones Islamic Market™ Index

Participation in Scientific Contests and Conferences


Articles published in Inaugural Issue of the Journal can be found and downloaded here:

About the Journal:
The Journal of Islamic Finance (JIF) is an official publication of IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM).
The journal is designed to provide a forum or platform for researchers/academicians and practitioners who are interested in new knowledge and in discussing ideas, issues and challenges in the field of Islamic finance, banking, accounting, business and economics.
The scope or coverage of the journal will include but are not limited to: Islamic banking, Islamic capital markets, Islamic wealth management, Issues on shariah implementation/practices of Islamic banking, zakat and awqaf, takaful, and comparative analysis of Islamic and conventional financial institutions. The journal is published biannually in September and March and all articles submitted are in English.

Key Journal Audiences:
Those who will be benefited by this journal are:
(i) University and College Professors;
(ii) Practitioners;
(iii) Media Organizations;
(iv) Government Policymakers
(v) Professional Consultants;
(vi) Multilateral Organizations (World Bank, IMF, UN Agencies);
(vii) Students; and
(viii) Ordinary People Interested in Islamic banking, finance and economics.

The contents of the papers shall be the sole responsibility of the authors and publication shall not imply the concurrence of editors and publishers. The following are submission guidelines:
Electronic Submission is requested. Please send a Word file (.doc and .docx) of the manuscript to:dr.muh.abduh@gmail.comand cc to:

       All manuscripts shall be subject to an editorial pre-screening process to assess suitability for the journal and pass through a blind review process.
Both theoretical and applied manuscripts will be considered for publication. Theoretical manuscripts must provide a clear link to important and interesting applications.
Subject to the pre-screening, manuscripts shall be processed in a anonymous manner, using independent expert referees from the respective field.
Submission of an article to the journal indicates formal acceptance by the author(s) of these peer review conditions and procedures.
Submission of the manuscript will be held to imply that it contains original unpublished work and is not being submitted for publication elsewhere at the same time. Submitted material will not be returned to the author, unless specifically requested.
Decision by the editorial board is final.

The Manuscript
Manuscripts must be typed with a double spacing throughout, on one side of A4 paper only, with a 4cm left-hand margin. The text and references should be checked thoroughly for errors before submission. It is the responsibility of the author to ensure that the typescript is correct in style, syntax and spelling. Papers should normally be divided into headed sections. The text should be in Times New Roman font size 12.

Title Page
The first page of the typescript must contain: the full title, name and affiliation of authors; a running title of not more than 75 letters; an abstract of not more than 200 words; and the name, full postal address and email of the corresponding author.

Any word or words to be abbreviated should be written in full when first mentioned followed by the abbreviation in parentheses.

The Harvard system is used. When quoted in the text style is: …Smith (1995)… or (Brown and Jones, 2002) or …Smith et al. (2004a). References are listed alphabetically after the text. Journal and book titles should be written out in full.

Examples are:

       Guidolin, M. and Timmermann, A. (2005) Economic Implications of Bull and Bear Regimes in UK Stock and Bond Returns, The Economic Journal, 115, 111-143.
Phelps-Brown, H. (1981) Labour Market Policy, in Changing Perceptions of Economic Policy(Ed.) F. Cairncross, Methuen, London, pp. 68-113.
Mundell R. A. (1968) International Economics. Macmillan: New York.
Rodrik, D. (1997) TFPG Controversies, Institutions and Economic Performance in East Asia. National Bureau of Economic Research Working Paper, No. 5914.


As we are approaching the end of 2012, the IFSB would like to inform you of some of the events we have confirmed for the first half of 2013. The events consist of a variety of workshops, seminars as well as the 10th IFSB Summit that will be held in May 2013. Do mark the dates on your personal calendar so you will not miss the events relevant to you.

1Roundtable on the Islamic Financial Services Industry Stability ReportKuala Lumpur, Malaysia21 January 2013Awareness Programme
2The IFSB Public Hearing on Exposure Drafts 14 and 15Kuala Lumpur, Malaysia22 January 2013Awareness Programme
3IFSB-FIS Workshops on TakafulKhartoum, Sudan29 – 31 January 2013IFSB-FIS Workshops
4IFSB-FIS Workshops on Liquidity Risk Management and Stress Testing StandardsKhartoum, Sudan29 – 31 January 2013IFSB-FIS Workshops
5IFSB-FIS Regional Workshops on Liquidity Risk Management and Stress Testing StandardsDoha, Qatar18 – 20 February 2013IFSB-FIS Workshops
6IFSB-FIS Regional Workshops on Liquidity Risk Management and Stress Testing StandardsLabuan, Malaysia23 – 25 March 2013IFSB-FIS Workshops
7IFSB Annual Meetings 2013:
22nd Council Meeting
11th General Assembly
7th Islamic Financial Stability Forum
Meet the Members Session
Doha, QatarApril 2013Awareness Programme
84th Islamic Financial Services Forum: The European ChallengeRome, Italy9 April 2013Awareness Programme
9Roundtable on Mid-term Review of the Islamic Financial Services Industry Development: Ten-Year Framework and StrategiesManama, BahrainApril 2013Awareness Programme
10IFSB – INCEIF Executive ProgrammeKuala Lumpur, MalaysiaApril 2013Executive Programme
11Pre-Summit Event: Meet the Members LunchKuala Lumpur, Malaysia14 May 2013Awareness Programme
1210th Islamic Financial Services Board Summit – The Future of the Islamic Financial Services Industry: Resilience, Stability and Inclusive GrowthKuala Lumpur, Malaysia14 – 17 May 2013Awareness Programme

       Kindly visit the events page on the website for two reasons:

       The full programme and registration details of these events.
We will be updating more information from time to time on other confirmed events, which may be of interest to you.

Source: the IFSB Secretariat


Islamic Finance Architecture

A very interesting presentation on Islamic Finance Architecture can be downloaded at the following link:

   Islamic Finance Architecture


Islamic Finance Infrastructure

A very interesting presentation on Islamic Finance Infrastructure can be downloaded at the following link:

   Islamic Finance Infratructure


 General Council for Islamic Banks & Financial Institutions (CIBAFI) Secretary General Omar Hafiz on Oman’s entry into Islamic financial markets

April 24, 2013 •  • 

   Dr. Omar Hafiz is the Secretary General of the General Council for Islamic Banks and Financial Institutions (CIBAFI), an international not-for-profit body that represents the Islamic financial services industry globally. He spoke with The Prospect Group about the role that CIBAFI plays in promoting the Islamic financial services industry, the current global demand for Islamic financial products and services, and Oman’s recent implementation of Islamic financing.

   What role does CIBAFI play in the overall development and promotion of the Islamic financial services industry in the global arena?

   HAFIZ: CIBAFI (General Council for Islamic Banks and Financial Institutions) is an international organization registered in Bahrain. We are a union of Islamic banks from around the world.  At the moment, we have more than 100 members in CIBAFI and we are very proud of all of them. Our mission is to promote Islamic banking and finance around the world. We are focusing on taking care of the interests of our members and ensuring that they are receiving the right advisory. We want to help them expand their business and develop strong relations within the Islamic banking community. We want to take care of the stakeholders around the world. We believe we are doing fine and we hope to continue being successful in the future.

   How would you describe the current state of demand for Islamic financial products and services? How do you see this progressing over the next 2-5 years?

   HAFIZ: The entire world is becoming increasingly more interested in Islamic finance. The world is paying close attention to Islamic countries in order to have a better understanding of the industry. They want to see the positive impacts that Islamic financing has on a country’s economy. OIC (Organization of the Islamic Conference) member countries are required to look at these elements. The world is looking at these member countries as a representation of the potential impacts that Islamic finance can have. They need to see that Islamic banking is contributing to their economies. The world needs to see that Sharia compliant institutions are doing well and are successful in investing liquidity. Islamic financial institutions need to show that they are successful in financing a countries’ development. As a result, a lot of work needs to be done by the regulators to show that they really have something to be proud of. Until recently, we have had a small share of the financial business in Arabic countries. We are looking to gain a larger share because it currently stands at roughly 10%, which is very minimal. Our current share does not fulfill our hopes. As a result, we are looking for the full support of Islamic governments for the industry. This is why CIBAFI is trying to create strong relationships with supervisory authorities around the Muslim world that can take care of this infant industry.

What are the reasons that Oman has entered the Islamic financial services industry only recently?

HAFIZ: Oman is a Muslim country and it is very natural that they are now implementing Islamic banking. They are creating a platform for all businessmen and foreign investors to come to Oman and establish Islamic banking entities. We at CIBAFI are very happy that Omani authorities have issued their regulations to open the door. This is for Islamic businessmen around the world to come and invest in Islamic banking. It is a new product with its own features that will help benefit society. Please come into Oman. The market is open to you. The market is hungry for Islamic financial services and products. Omani businessmen are estimating that there is roughly OMR 3bn ($7.8bn) under the table right now. It is not in the financial system of Oman because of the issue of Islamic versus conventional ideals of banking. As a result, please go ahead and establish Islamic banks in Oman.

How has regulatory intervention helped facilitate the growth and development of the Islamic financial services industry?

HAFIZ: The most important thing is that there are regulations. It must be understood that no regulation is perfect. The world is moving and modifications always have to be done. There will always be a need to update things. So now, there is legislation and there are regulations. Take it and you will find that it is a good start. I am not saying it is perfect. There are always some comments. There are always reservations but we must start somewhere. Do not let whatever shortcomings you see stemming from regulations prevent you from partaking in the industry. Move forward and you will find some way or another to achieve your goals.

What are the necessary prerequisites for Islamic finance FDI flow to Oman?

HAFIZ: FDI is very important to each country because the world is now becoming one small village. We are interacting with every country. Inflow of foreign direct investment is very important to a country as well as outflow. Countries are looking for Omanis to come and invest. We are also looking for other GCC countries to come and enter Oman. This structure of the global economy has its own features and is not the same as it used to be before. This is why the World Trade Organization (WTO) is trying to open up economies. There are a lot of agreements occurring to help open up countries. All countries are trying to be more open to others with their own features and interests.

How have rising political tensions in the Middle East, along with the debt crisis in the West, impacted the global Islamic financial services industry?

HAFIZ: The problem is that the Western economies have most of the wealth in the world. Any crisis that occurs there affects everybody around the world. This means that there should be further collaboration, coordination, and understanding of each other. It should be a win-win situation and everybody should be winning. No one should be suffering. This should be the goal for everybody around the world. We just need to figure out a solution and everybody will be happy.