ISLAMABAD – The Asian Development Bank (ADB) and Islamic Financial Services Board (IFSB) signed a MOU to facilitate international cooperation between the two organizations in promoting the development of Islamic finance in common developing member countries.
The MOU provides an effective basis for joint activities and general cooperation in areas of common interest.
The MoU is aimed at enhancing cooperation in the form of joint technical assistance and/or policy-based work in Common Developing Member Countries.
It would help promoting the development of Islamic finance, in particular strengthening the capacity of regulating and supervising Islamic financial services institutions, Islamic capital markets and Islamic liquidity management in Common Developing Member Countries.
The other objective of the MoU is to stimulate joint research and exchange of information, which will be used as critical evidence to support policy areas of mutual interest, as well as to enhance knowledge-sharing between both organizations. The agreement was signed by ADB Vice President for Knowledge Management and Sustainable Development, Bindu Lohani and IFSB Secretary-General Jaseem Ahmed on behalf of their institutions in Manila, said ADB press statement received here Tuesday.
“The importance of Islamic Finance in the development of Asia cannot be doubted, as can be seen by the significant increase in Shari’ah compliant financing in a number of ADB’s developing member countries in recent years,” said Bindu Lohani, ADB Vice President for Knowledge Management and Sustainable Development, said.
“We look forward to working even more closely with IFSB under this MOU to address some of the key issues facing our member countries in the areas of financial inclusiveness and infrastructure financing,” Lohani added.
On the occasion, Ahmed thanked ADB for its longstanding support for Islamic finance, and noted that the MOU formalizes a partnership between IFSB and ADB going back to the provision of the first Technical Assistance by the ADB for Islamic finance in 2005. He underlined that the MOU was designed to serve both institutions and their respective mandates.
“In the context of Asia’s developmental needs, and the expanding potential for Islamic finance in the region, the MOU strengthens our ability to jointly support the policy, institutional and capacity requirements for a more resilient Islamic financial sector, Ahmed said.
“I especially look forward to work with ADB in encouraging cross-border cooperation in the use of Islamic finance to address the challenges of widening financial and social inclusion in Asia, and in meeting Asia’s enormous need for innovative financial mechanisms for its infrastructure spending,” he added.
It is pertinent to mention here that the IFSB is an international standard- setting organization that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors.