Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the standard-setting body for the Islamic financial industry welcomes the Central Bank of the United Arab Emirates (CBUAE) for adopting AAOIFI Shari’ah standards in its jurisdiction, upon the recommendation of the Higher Sharia Authority of CBUAE.
According to a recent pronouncement, all full-fledged Islamic banks, Islamic windows of conventional banks, and finance companies offering Shari’ah compliant products and services in UAE are required to comply with the AAOIFI standards with effect from 1 September 2018. This will also require the revision of existing products and services of these institutions to be in compliance with AAOIFI standards.
On this occasion, His Excellency Shaikh Ebrahim bin Khalifa Al Khalifa, Chairman of AAOIFI’s Board of Trustees welcomed the much awaited step and said, “adoption of AAOIFI standards by the Central Bank of the UAE is a big encouragement not only for AAOIFI but also for the Islamic financial industry around the globe. UAE holds approximately 20% share in the global Islamic banking market and this decision by the UAE regulator will play a significant role in the harmonization of Islamic financial industry practices across the globe. This is also a testimony of the robustness of AAOIFI standards, which complement the modern finance and banking practices with the economic principles of Islam. AAOIFI welcomes and thanks the Central Bank of the UAE for recognizing this. I am sure this will lead other jurisdictions around the globe to follow suit.”
Members of the AAOIFI Shari’ah Board also expressed their satisfaction on the confidence depicted by the CBUAE on AAOIFI’s standards and further hoped that other regional and global central banks and regulatory agencies will also adopt AAOIFI standards.
It is worth mentioning that AAOIFI standards are considered as reference for the Islamic finance industry, which is either adopted in full, in part or as guidelines, either mandated by the regulator or voluntarily adopted by Islamic financial institutions in various jurisdictions around the world.
Presently, AAOIFI standards have been fully or partially adopted or being adopted in more than 19 countries and jurisdictions, and additionally as recommended guidelines or referenced by regulatory bodies of more than seven countries and jurisdictions. AAOIFI Shari’ah standards are available in Arabic (official), English, French, Russian and Urdu languages, while the translation in Chinese (Mandarin) and Turkish languages are being finalized.