Islamic finance infrastructure
1. 1425H (2004) International Islamic Centre for Reconciliation and Commercial Arbitration (IICRCA) - Dubai, U.A.E. Conduct mediation of disputes and to adjudicate on financial and commercial disputes which can arise between Islamic financial institutions, and between these institutions and/or third parties. 2. 1423H (2002), The Islamic Financial Services Board (IFSB)- Malaysia. Promote development of prudent standards and effective supervision guidelines for the Islamic financial services industry and recommend their adoption by relevant regulatory authorities. 3. 1423H (2002), The International Islamic Rating Agency (IIRA) - Bahrain. Conduct rating of entities, determine financial strength, fiduciary risk and credit worthiness of the issuer along with assessment of Shariah compliance. 4. 1423H (2002), Liquidity Management Centre (LMC) - Bahrain. Facilitate development of inter-bank money market and to provide short-term investment opportunities with greater Shariah credibility. 5. 1422H (2001), The General Council of Islamic Banks and Financial Institutions - Bahrain. Promote cooperation amongst Islamic financial institutions, develop concepts, rules, provisions, share related information, and develop better understanding with regulatory bodies. 6. 1421H (2001), International Islamic Financial Market (IIFM) - Bahrain. Develop Shariah enhancement and guidelines for issuance of Islamic financial instruments, and to encourage active secondary market trading. 7. 1411H (1991), The Accounting and Audit Organisation for Islamic Financial Institutions (AAOIFI) - Bahrain. Develop accounting, auditing and Shariah standards for adoption in the financial reporting of Islamic financial institutions. 8. 1401H (1981) The Islamic Research and Training Institute, (IRTI) IDB - Jeddah, Saudi Arabia. To undertake research and impart training in Islamic economics and assist in the development of Shariah-compliant financial sector.
1. Accounting and Auditing Organization for Islamic financial institution (AAOIFI) The AAOIFI is a non-profit organization that focuses mainly on the area of accounting and auditing for Islamic financial institutions. While recognizing the need for standards, AAOIFI was established on February 1990 in Algeria and was registered on March 1991 in the kingdom of Bahrain. The organization is supported by 200 institution members from 45 countries across the global. The AAOIFI is one of prominent Islamic agency that attempts to install accounting and auditing standard for Islamic financial industry. The main object is to develop and disseminate accounting and auditing thought relevant to Islamic financial institutions and their applications. Its tasks include holding seminars, publishing periodicals, newsletters, commissioning research and prepare, promulgate, interpret and review, the accounting and auditing standards for Islamic financial institutions. Its notable efforts are to inform and encourage banking supervisors around the world to adopt its standard as the benchmark for Islamic financial institutions in their countries. These attempts to improve the transparency and comparability of the financial reporting of Islamic financial institutions are bearing fruit. The AAOIFI’s standard has been applied in various countries such as Bahrain and Sudan which require Islamic Banks in their countries to follow AAOIFI’s standards. In Qatar and Saudi Arabia AAOIFI’s standards are specified as guidelines.To achieve international recognition for its standard, AAOIFI has also been working with conventional international bodies which involve in the development of standards and regulation of banks such as the International Monetary, international Accounting Standards Board, and the Basel Committee.55 The organization plays a crucial role in harmonizing the Islamic financial institution practices with the international accepted practices.
2. Islamic Financial Services Board (IFSB)
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