LOCAL and foreign participants from Islamic financial institutions and regulatory bodies are gathering in the sultanate to tackle new challenges in implementing safety standards for Islamic banking in the region.
Increasing collaboration and interaction among financial institutions and other relevant agencies is needed to further expand the rapid growth of Islamic banking, said Dr A G Karunasena, executive director of South East Asian Central Banks (SEACEN) Research and Training Centre yesterday.
Speaking at the opening ceremony of a course on regulation and supervision of Islamic banks, he said that the sharing of knowledge and experiences among practitioners is essential to meet the diverse needs of consumers and businesses.
“Innovations of various Islamic financial products and services are not only expanding but also becoming more complex and sophisticated, resulting in new challenges to those who are responsible for overseeing and supervising financial institutions,” he said.
He hoped that the 46 participants from 24 institutions would be able learn the main elements of Islamic banking supervision and address differences between Islamic banking and conventional banking regulatory arrangements throughout the five-day course at Rizqun International Hotel.
Participants will also explore techniques and applications on Islamic banking regulation through case studies on the experiences of specific countries.
Dato Paduka Hj Ali Apong, Permanent Secretary at the Ministry of Finance, said that regulators and supervisors of Islamic banks need to keep abreast with the latest developments in Islamic financial services because “Islamic banks have now become a world force”.
He said that the launch of the first 91-day Sukuk Al-Ijarah, or Islamic bond in 2006, has “paved the way for Brunei to become the first sovereign to bypass conventional capital markets towards developing an Islamic capital market instrument”.
“The Ministry of Finance has issued the sukuk six times, which totalled $730 million to date, as one of the efforts to promote and develop Brunei as the hub for Islamic banking and finance,” he said.
Brunei has two Islamic banks, the Bank Islam Brunei Darussalam and Tabung Amanah Islam Brunei, or Brunei Islamic Trust Fund (Taib).
Islamic financial services comprise an estimated US$1 trillion market worldwide, according to credit rating agency Standard & Poor’s.
SEACEN Research and Training Centre, which has 16 member countries, including Brunei, was established in 1982 to review and analyse financial, monetary, and economic developments in the region.
The Islamic Research and Training Centre, on the other hand, provides training and information services in developing financial and banking activities that conform to Syariah or Islamic law principles.
The course is the third of its kind to be organised by SEACEN centre and the Islamic Research and Training Institute of the Islamic Development Bank. Malaysia and Indonesia previously hosted the course in 2005 and last year, respectively.
BANDAR SERI BEGAWAN
The Brunei Times