This paper aims at developing a better understanding of Islamic banking (IB) and providing policy recommendations to enhance the supervision of Islamic banks (IBs). It points out and discusses similarities and differences of IBs with conventional banks (CBs) and reviews whether the IBs are more stable than CBs. Given the risks faced by IBs, the paper concludes that they need a legal, corporate and regulatory framework as much as CB does. The paper also argues that it is important to ensure operational independence of the supervisory agency, which has to be supported by adequate resources, a sound legal framework, a well designed governance structure, and robust accountability practices.
AAOIFI BCBS BCP CAMELS CAR CB FSI HQLA IFRS IFSB LCR NFSR PER PLS
PSIA RIA SSB URIA GLOSSARY Accounting and Auditing Organization for
Islamic Financial Institutions Basel Committee on Banking Supervision Basel
Core ...
The relative financial strength of Islamic banks is assessed empirically based on evidence covering individual Islamic and commercial banks in 18 banking systems with a substantial presence of Islamic banking. We find that (i) small Islamic banks tend to be financially stronger than small commercial banks; (ii) large commercial banks tend to be financially stronger than large Islamic banks; and (iii) small Islamic banks tend to be financially stronger than large Islamic banks, which may reflect challenges of credit risk management in large Islamic banks. We also find that the market share of Islamic banks does not have a significant impact on the financial strength of other banks.
Section II provides a short overview of the specifics of Islamic banking from a
prudential perspective, and discusses the associated risks (more details are
provided in Appendix I). Section III discusses the methodology, and introduces
the ...
The growing presence of Islamic banking needs to be accompanied by the development of effective regulation and supervision. This paper examines the results of the survey conducted by the International Monetary Fund to document international experiences and country practices related to legal and prudential frameworks governing Islamic banking activities. Although a number of countries have made considerable progress in creating legal, regulatory, and supervisory frameworks that accommodate Islamic banking, there are substantial differences. This paper also identifies a number of challenges faced by regulatory and supervisory agencies regarding Islamic banking.
A. Accommodation of Islamic Banking There are various ways in which
jurisdictions incorporate Islamic banking into their regulatory framework. A first
approach is where the Basel Committee on Banking Supervision (BCBS)
framework for ...
This paper analyzes the implications of Islamic precepts on banks’ structure and activities, focusing on banking supervision issues. It points out and discusses these issues in the context of a paradigm version of Islamic banking, as well as in frameworks that fall between the paradigm version and conventional banking. The case of Islamic banks operating in a conventional system is also examined.
Contrary to conventional banks, Islamic banks cannot obtain funds through LOLR
facilities, including Lombard and discount windows, as well as overdraft or other
credit facilities operated by the central bank. This is due to the fact that all of the ...
This study was prepared by Zubair Iqbal of the Middle Eastern Department and Abbas Mirakhor of the Research Department. To collect information and views for the study, the authors held discussions with the authorities and representatives of commercial banks in the Islamic Republic of Iran and in Pakistan.
Interest-free banks have also been operating in several non—Muslim countries.
The experiences of the Islamic Republic of Iran and of Pakistan—tw0 countries
that have recently attempted to implement Islamic banking on a comprehensive ...
Before the caliphate of the 'Uthman b. 'Affan, the Muslim community had grown from strength to strength in spite of a series of major crises--the Hirah, the death of the Prophet, the Riddah wars, the assassination of 'Umar by a Persian slave. But 'Uthman's reign ended in catastrophe. His inability to manage the social and political conflicts that were now emerging among various factions within the community led to his death at the hands of Muslim rebels. The consequences of this tragic event were bitter: not only a century of civil war, but also political and religious schisms of such depth that they have not been entirely healed even now. Most medieval Muslim historians told this story in an overtly partisan manner, but al-Tabari demands more of his readers. First of all, they must decide for themselves, on the basis of highly ambigous evidence, whether 'Uthman's death was tyrannicide or murder. But, more than that, they must ask how such a thing could have happened at all; what had the Muslims done to bring about the near-destruction of their community? Al-Tabari presents this challenge within a broad framework. For, even while the internal crisis that issued in 'Uthman's death was coming to a head, the wars against Byzantium and Persia continued. The first expeditions into North Africa, the conquest of Cyprus, the momentary destruction of the Byzantine fleet at the Battle of the Masts, the bloody campaigns in Armenia, the Caucasus, and Khurasan are all here, in narratives that shift constantly between hard reporting and pious legend. Muslim forces retain the offensive, but there are no more easy victories; henceforth, suffering and endurance will be the hallmarks of the hero. Most evocative in the light of 'Uthman's fate is the moving account of the murder of the last Sasanian king, Yazdagird III--a man betrayed by his nobles and subjects, but most of all by his own character.
'Affan 254 Umm 'Abdallah bt. Yazid al-Kal- biyyah n Umm 'Amr bt. Jundub al-Azdi
254 Umm 'Amr bt. 'Uthman b. 'Affan 254 * Umm Bakr bt. al-Miswar b. al-
Makhramah 181 Umm al-Banin bt. 'Uthman b. 'Affan Umm Haram 25 Umm
Kulthum bt.
