IFSB accpets Qatar as a new member

IFSB accpets Qatar as a new member

Veeramalla Anjaiah, The Jakarta Post, Kuala Lumpur

The newly established Islamic Financial Services Board (IFSB)
held its first council meeting and general assembly on Sunday
night and accepted Qatar as a new member.

The board also elected Rifaat Ahmed Abdul Karim of Sudan as
its secretary-general.

While addressing an international press conference, Rifaat,
who is presently the secretary-general of the Accounting and
Auditing Organization for the Islamic Financial Institutions
(AAOIF), said on Monday the IFSB's regulations and standards
would be complimentary to the existing Islamic auditing and
accounting bodies, adding that they were voluntary.

"Our role is to set the standards and it's up to member
countries whether to follow the IFSB's standards or not," he
said.

However, several delegates of the IFSB were pessimistic about
its success.

"IFSB should at least make it mandatory for member countries
to follow the standards and procedures," said Mohd. Daud Bakar,
deputy rector of the International Islamic University of
Malaysia, Kuala Lumpur.

The two-day-old IFSB will start functioning next year.

"I am going to leave my present position in the AAOIF and take
up my new job at the end of February," said Rifaat.

He also clarified that United Arab Emirates was not a member
of the IFSB as earlier reported in the media.

The IFSB comprising Bahrain, Indonesia, Iran, Kuwait,
Malaysia, Pakistan, Saudi Arabia and Kuwait agreed on Sunday to
admit Qatar, subject to "legal formalities," the board said in a
statement.

The first meeting was chaired by Bank Indonesia Governor
Syahril Sabirin because IFSB's first chairman, Shaikh Ahmed
Mohammed Al-Khalifa, who is also the governor of the Bahrain
Monetary Agency, did not attend the meeting.

While revealing the details of IFSB's first council meeting
decisions to the media, including the Jakarta Post, Syahril said
all the member countries were optimistic that the new body would
succeed in its mission.

The council has also appointed the members, chairman and
deputy chairman of the Technical Committee and also approved the
bylaws of the IFSB, which are the rules and procedures governing
the board.

"We also approved the annual subscription of US$30,000 for
full membership, $20,000 for associate membership and $10,000 for
observers," said Syahril, who will take the chairmanship of the
IFSB at its next general assembly.

The IFSB -- an association of central banks, monetary
authorities and other institutions responsible for supervising
and regulating Islamic banking -- was inaugurated by Malaysian
President Mahathir Mohamad on Sunday in Kuala Lumpur.

The two-day meeting, which was attended by more than 1,500
participants from 32 countries, ended on Monday.

The launch of the panel has been hailed as a significant step
for the global Islamic financial market, which is estimated to be
worth US$200 billion with an annual growth rate of 15 percent.

The board is expected to help develop a uniform application of
Islamic Shariah law to financial practices and regulation.

Among others, the Islamic financial system forbids payment of
any fixed rate of returns, which effectively prohibits charging
interest.

Under risk-sharing principles, Islamic banks instead share the
losses or profits incurred by their borrowers, so they must
judiciously scrutinize the honesty and ethics of their clients.