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The event was held in Colombo and Central Bank of Sri Lanka Governor Ajith Nivard Cabraal graced the event as the Chief Guest while Maldives Monetary Authority (MMA) Governor Dr. Azeema Adam was the Guest of Honour for the third consecutive year. Also present at the event were members of the Islamic finance fraternity, professionals and practitioners from the insurance and banking industry as well as academics and regulators.
The IFN Roadshow is part of a series of conferences held by the REDmoney group which has conducted shows in 12 markets across the world this year, including Pakistan, Turkey, Brunei, Bangladesh, Singapore, Australia, Thailand and Morocco. This highly anticipated event plays an integral role in identifying opportunities for the future growth of Sri Lanka’s Islamic finance sector covering banking, finance and Islamic capital markets. At the event, a large gathering of delegates came together to discuss current issues, challenges and the potential of Sri Lanka’s Islamic finance industry.
The IFN forum has a strong turnout every year and continues to attract players from different backgrounds and sectors who are looking to tap into Sri Lanka’s massive potential for infrastructure developments, halaal food production and the country’s booming tourism sector. Sri Lanka is also strategically located in close proximity to many other countries in Asia, making it an ideal hub for Islamic finance in the South Asian region.
This year, several topics were discussed at the forum including ‘Addressing Challenges through Innovation: Emerging Trends and Opportunities’ and ‘Advancing Sri Lanka’s Islamic Finance Industry: What Needs to be done’. An investor roundtable titled ‘The Islamic Investment Landscape: Market Trends and Strategies for 2015’ was also held.
Highlighting the importance of the IFN Roadshow, Cabraal stated, “We have to be conscious of the developments that are happening right across the world. If there are developments that are important, we must attempt to make use of them, by bringing them into our own array of instruments. We have seen Islamic finance become increasingly important throughout the world.
“This category of finance, not only impacts the Islamic world, it also provides exciting new methods of financing for the rest of the world. It is important for us to understand these concepts. I believe that conferences of this kind enable all of us to reflect on new developments and fine-tune them to suit our own economies and financial markets, in order to go forward.”
Dr. Adam stated, “Historically, Sri Lanka and the Maldives have always had a close relationship in trade, tourism and many other areas. When Amana Takaful was first established in the Maldives in 2003, it was our first introduction to Islamic finance. It is now encouraging to see that this industry is on the rise in the Republic of Maldives and is growing rapidly due to the emergence of other Islamic finance service providers.”
Commenting on the partnership, Amana Takaful PLC Chief Executive Officer Fazal Ghaffoor stated, “We at Amana Takaful are proud to partner with REDmoney for the third consecutive year to bring the IFN Roadshow to Sri Lanka. We are very happy to be part of such a prestigious event which brings together so many delegates from different parts of the world. This is a great opportunity for Sri Lanka which is continuously attracting new prospects for growth. More banks, insurers and finance companies are now opening up to the concept of Islamic finance.”
Amana Takaful has been recognised for its innovation and quality of service for over 15 years. The company caters to a vast variety of customers. ATPLC was recently recognised at the 2014 SLIBFI awards and received two gold awards for the ‘Best Islamic Finance Entity of the Year’ and for the ‘Product of the Year’ for KruthaGuna, the company’s unique hospitalisation insurance policy for senior citizens over 55 years of age.
Islamic finance body IFSB issues draft guidance on liquidity risk managementReuters: The Kuala Lumpur-based Islamic Financial Services Board (IFSB) has released draft guidance on liquidity risk management for Islamic banks and a new standard for regulatory supervision, as the industry body tightens oversight of banking practices. IFSB guidelines allow national financial regulators to have the final say on how they apply standards, but its prescriptive approach is gradually helping to harmonise practices across the industry’s core centres in the Middle East and southeast Asia. Islamic banks face uncertainty over how regulators will treat their deposits, compounded by a lack of well-developed Islamic securities markets. The IFSB’s guidance note on liquidity management aims to clarify the accounting treatment of Islamic deposits and defines the types of high quality liquid assets (HQLA) that Islamic banks can hold to meet regulatory requirements under the Basel III banking standards now being phased in around the world. HQLA can range from cash and central bank reserves to sukuk (Islamic bonds) issued by both sovereigns and corporates, subject to various haircuts, the IFSB said. Given the shortage of such instruments, the IFSB outlined three other actions which regulators could take to facilitate the industry: liquidity facilities from central banks, allowing banks to hold HQLA in international currencies, and widening HQLA criteria. This would help Islamic banks meet Basel III liquidity coverage ratios that are being phased in from 2015 to 2019; a net stable funding requirement will be implemented in 2018. Regulators will have to determine the rights of bank customers to withdraw their Islamic deposits to define the weights, or run-off rates, that apply to these, the IFSB said. It added that developing sharia-compliant deposit insurance schemes would be required if deposits were to be considered “stable” under Basel rules. Regulators must also decide on the treatment of Islamic deposit holders, who must be classified as investors, as a liability to the bank, or as a mix that is partly risk- absorbent, the IFSB said. Core principles The IFSB also published a draft standard on core principles for regulation and supervision of the industry, which will come into effect in January 2016. These broadly mirror the Basel core principles, while addressing other issues such as the treatment of Islamic window operations, which are sections of conventional banks that operate according to Islamic religious principles. The draft standard requires windows to have a minimum amount of funding from the conventional parent, and makes sharia supervision comparable to that of full-fledged Islamic banks. |
