SBP governor appointed Islamic financial body chairman

KARACHI: The Council of Islamic Financial Services Board (IFSB), Malaysia, has appointed State Bank of Pakistan (SBP) Governor Dr Reza Baqir as the chairman of its board for 2022, a statement said on Friday.

Dr Baqir’s appointment was approved by the IFSB Council in its 39th meeting held on December 9, 2021 in Abu Dhabi. In 2021, he was the deputy chairman of the IFSB Council, it added.

Dr Baqir will also be serving as the chairman of the IFSB general assembly for 2022. The general assembly is the representative body of all the members of the IFSB, including full-time, associate and observer members.

The SBP governor said he felt deeply honoured to assume the chairmanship of the council and expressed the gratitude to Khaled Mohamed Balama Al Tameemi, governor of the UAE Central Bank, for successfully leading the council during 2021.

Dr Baqir expressed the hope that with the support of his fellow council members, he aspires to help IFSB realise its mandate and continue providing a high-quality intellectual guidance to the global Islamic finance industries envisaged in IFSB’s forward looking and ambitious strategic performance plan 2022/24.

The IFSB Council is the senior executive and policy making body, consisting of a full member representative and senior executives from leading regulatory and supervisory authorities on Islamic finance.

Currently, the body has 187 members, which comprise 81 regulatory and supervisory authorities, 10 international inter-governmental organisations, and 96 market players (financial institutions, professional firms, industry associations and stock exchanges), operating in 57 jurisdictions.

The mandate of the council is to formulate and approve the policies and strategies of the IFSB, approve and make bylaws and adopt and approve issuance of prudential and supervisory standards.

Established in 2003 in Kuala Lumpur, Malaysia, as an international standard setting organisation, IFSB has so far issued 24 standards, seven guidance notes and three technical notes for the Islamic financial services industry, covering wide-ranging areas such as risk management, capital adequacy, supervisory review process, transparency and disclosure, Shariah governance, and corporate governance.

According to IFSB’s global Islamic financial services Stability Report 2021, the total worth of the Islamic financial services industry (Islamic banking, Islamic capital markets and Takaful) is estimated at $2.70 trillion in 2020.

To strengthen the regulatory and supervisory infrastructure for Islamic banking industry, the SBP has, over the years, adopted various IFSB prudential standards and guidelines after necessary customisation in the light of the prevailing local legal and regulatory environment.

In Pakistan, currently there are five full-fledged Islamic banks and 17 conventional banks operating with the standalone Islamic banking branches offering a wide array of Shariah-compliant financial solutions.

As of June 2021, the market share of the Islamic banking industry assets and deposits in the overall banking sector stood at 17 per cent and 18.7 per cent, respectively.

The branch network of Islamic banking institutions comprises over 3,583 branches and 1,562 windows. Islamic banking industry in Pakistan has become systemically an important component of the banking industry, registering a remarkable growth over the last two decades.