November 21, 2018

IFSB issued an Exposure Draft of Technical Note-3 on Financial Inclusion and Islamic Finance (ED TN-3). The comment period on the consultation ends on December 28, 2018. IFSB invites comments from regulatory and supervisory authorities, international organisations, institutions offering Islamic financial services (IIFS), academics, and other interested parties.

The aim of ED TN-3 is to provide guidance on good practices in regulating the financial sector to enhance financial inclusion through Islamic finance, while considering proportionality in balancing the benefits of regulation and supervision against the risks and costs. The ED TN-3 underscores the importance of financial inclusion, due to its intricate connection with economic growth, shared prosperity, and poverty reduction, while furthering an understanding of how financial inclusion policies and regulatory initiatives can support Islamic microfinance/savings/investment activities.

The ED TN-3 also covers recent developments in enhancing financial inclusion through digital finance and financial technology (fintech) platforms while further identifying the key challenges and emerging issues, as experienced by the market players and regulators, in microfinance and financial inclusion related to Islamic financial services. Finally, the ED TN-3 explores practical modalities for the integration of social finance modes in Islamic finance (for example, zakāh, sadaqah, waqf) with the commercial Islamic financial services industry (IFSI) to promote financial inclusion. The objectives of ED TN-3 include the following:

  • Provide international benchmark guidelines on regulatory and supervisory policies to support financial inclusion initiatives in the IFSI
  • Provide guidance to RSAs on the application of the proportionality principle so that the benefits of regulation and supervision can be balanced against the risks and costs
  • Factor in recent developments in enhancing financial inclusion through Shari’ah-compliant mechanisms by digital finance and fintech platforms
  • Consider a modality for the integration of modes of Islamic social finance (for example, zakāh, sadaqah, waqf) with the commercial IFSI
  • Highlight challenges in, and propose solutions to, emerging regulatory issues in microfinance and financial inclusion activities in the IFSI

The scope of this ED TN-3 includes the banking sector as well as the non-bank financial institutions and the Islamic capital market in promoting financial inclusion, where needed. The ED TN-3, however, excludes takāful sector from its scope, as a recent joint IFSB–IAIS working paper has already covered aspects of regulation and supervision of microtakāful activities.

 

Related Links

Comment Due Date: December 28, 2018

Keywords: International, Banking, Securities, Islamic Finance, Financial Inclusion, Fintech, ED TN-3, IFSB

Related Articles
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
News

OCC Consults on Information Collection for Home Mortgage Disclosures

OCC is soliciting comment on the revision of the information collection titled “Regulation C—Home Mortgage Disclosure.” OCC also notes that it has sent the collection to OMB for review.

May 20, 2019 WebPage Regulatory News
News

EIOPA Updates Q&A on Regulations in May 2019

EIOPA published additional questions and answers (Q&A) on guidelines, directives, and regulations applicable to insurers in Europe.

May 17, 2019 WebPage Regulatory News
News

FSB Publishes Update on Meeting of RCG for Americas

FSB published a summary of the meeting of its Regional Consultative Group (RCG) in Americas.

May 17, 2019 WebPage Regulatory News
News

IASB Issues Work Plan and Meeting Updates for May 2019

IASB published an updated work plan, along with the update of its meeting in May 2019.

May 17, 2019 WebPage Regulatory News
News

FCA Publishes Its Business Plan for the Coming Year

FCA published its Business Plan, which sets out the main areas of focus and priorities for 2019/20.

May 17, 2019 WebPage Regulatory News
News

CFTC Proposes to Amend Derivatives Clearing Organization Regulations

CFTC proposed amendments to certain regulations applicable to registered derivatives clearing organizations (DCOs) under Part 30 of the CFTC regulations.

May 16, 2019 WebPage Regulatory News
News

APRA Licenses Societe Generale As Foreign Deposit-Taking Institution

APRA granted Societe Generale a license to operate as a foreign authorized deposit-taking institution under the Banking Act of 1959.

May 16, 2019 WebPage Regulatory News
News

EBA Provides Updates on Its Work on Basel III Impact Assessment in EU

EBA is working to finalize the impact assessment on implementation of Basel III standards, in response to the EC call for advice, which was received on May 04, 2018.

May 16, 2019 WebPage Regulatory News
News

ISDA Publishes Two Consultations on Benchmark Fallbacks

ISDA published two consultations on benchmark fallbacks, the comment periods for which expire on July 12, 2019.

May 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3097