More than 45 regulatory and supervisory institutions attended the 1st roundtable organised by AAOIFI in collaboration with IFSB and IIFM on alternative benchmark rates

Accounting and Auditing Organisations for Islamic Financial Institutions (AAOIFI) in collaboration with Islamic Financial Services Board (IFSB) and International Islamic Financial Markets (IIFM) held the inaugural roundtable on alternative Islamic benchmark rates on 18 January 2022, virtually. The theme of the roundtable was: “Issues and challenges for Islamic finance in adopting alternative benchmark rates and finding an Islamic benchmark rate”.

The roundtable was attended by over 250 participants from 45 regulatory and supervisory authorities (RSAs), and a large number of participants from Islamic financial institutions (IFIs) and other institutions from around the globe.

This roundtable was a part of a series of roundtables, which aimed to discuss and deliberate on this subject and its implications on the Islamic finance industry from Shari’ah, regulatory, legal, accounting and governance perspectives.

The event was chaired by Mr. Farrukh Raza, the Chairman of the AAOIFI Governance and Ethics Board (AGEB) and Group CEO of IFAAS and Co-Founder of IFIN. The welcome address was delivered by Dr. Bello Lawal Danbatta, Secretary General of IFSB, while the keynote speech was delivered by Mr. Khalid Hamad Al Hamad, Executive Director, Banking Supervision, Central Bank of Bahrain.

The agenda of the roundtable comprised of five sessions, the first session was on identifying legal issues in adopting alternative benchmark rate, which was presented by Mr. Ijlal Alvi, CEO of IIFM.

His Eminence Sh. Mufti Taqi Usmani, Chairman, AAOIFI Shari’ah Board shared insights on Shari’ah aspects of adopting alternative benchmark rate and reemphasized the need for Islamic finance industry to have its own Islamic alternative benchmark rates. Dr. Osaid Kailani, member, AAOIFI Shari’ah Board also shared his views and experiences on existing practices within the industry with regards to the alternative rate and stated that the ideal economic parameters based alternate benchmark model may have some practical challenges but that should not stop us in developing solutions.

Dr. Ishrat Husain, former Governor of State Bank of Pakistan shed light on the regulatory aspects and challenges of transition and adoption of alternative benchmark rates.

Dr. Kabir Hasan, member of AAOIFI Governance and Ethics Board (AGEB) shared the proposed models and approach towards development of standard on Islamic benchmark rate taken by AAOIFI. Dr. Syed Salman Ali, lead research economist at Islamic Development Bank Institute also shared a presentation on alternative models of developing an alternate benchmark rate for the industry.

The participants actively participated in the discussions and raised pertinent questions for clarifications, as well as, provided expert feedback on various areas under discussion.

Mr. Omar Mustafa Ansari, Secretary General, AAOIFI, expressed his appreciation to IFSB and IIFM, the speakers and participants for joining the inaugural roundtable. He stated that “We are pleased to welcome for the first time 45 RSAs at this inaugural roundtable, as well as, a large number of AAOIFI members and other stakeholders, who actively participated in the discussions and shared a wealth of knowledge.” Additionally, Mr. Ansari also thanked all the speakers and Shari’ah scholars for sharing their insights during the event.

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List of institutions attended the roundtable

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