IMF endorses Islamic rules for financial assessment

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WASHINGTON: The International Monetary Fund (IMF) has approved a plan to incorporate Islamic finance into its financial sector assessments of select countries starting from January 1, 2019.
The Core Principles for Islamic Finance Regulation (CPIFR), endorsed this week by the IMF executive board, provides a set of principles for “the regulation and supervision of the Islamic banking industry and are designed to take into consideration the specificities of Islamic banks,” the IMF announced.
The IMF noted that the Islamic finance has over $2 trillion of assets globally and is offered in over 60 countries, including Pakistan and the industry has become systemically important in 13 jurisdictions across the globe, it added.
The latest Price water house Coopers (PwC) study indicates that global Islamic finance assets increased from $2tr in 2016 to $2.6tr in 2017.
The sector registered a strong 13-15pc growth last year and is expected to cross the $3tr mark by 2020, “potentially creating massive opportunities in this rapidly growing industry.
The Middle East and North Africa region and Asia will account for a large part of that growth,” the PwC report adds. The core principles approved by the IMF executive board were prepared by the Malaysia-based Islamic Financial Services Board (IFSB) with the participation of the secretariat of the Basel Committee on Banking Supervision (BCBS).
The Basel committee, established by the central bank governors of the Group of Ten countries in 1974, frames guidelines and standards for the banking sector.