The half-day Session is part of the IFSB’s efforts to reach out to its wide membership base, and provide an interactive platform for the international organisation to engage with the both the regulators and market players of the Islamic finance industry.
M. Anwar Bashori, Head, Department of Islamic Economic and Finance, Bank Indonesia in welcoming the IFSB and the participants, shared that the global economic outlook is projected to improve, which is expected to have a positive impact on the overall economic growth of Indonesia. Highlighting the asset growth of the Islamic finance industry globally, he shared his optimism that there is strong potential for further growth of this sector in Indonesia. He also touched on the importance of Halal tourism and food industry, and the various challenges and opportunities related to Fintech. He also shared the main strategies for developing Indonesia’s Islamic economy by strengthening the market infrastructure, increasing the efficiency of Islamic finance markets and strengthening resource allocation to support these strategies. He also emphasised importance of the IFSB’s role for the development and stability of the industry, and encouraged the market players’ involvement in the IFSB’s work and activities.
Zahid ur Rehman Khokher, Acting Secretary-General of the IFSB, in his presentation titled “The Global Islamic Finance Industry and the IFSB”, emphasised Indonesia’s position as a key global Islamic finance player by highlighting the country’s leading positon globally in various sectors and its pioneering role in Islamic Social Finance. Indonesia’s ongoing support in various activities of the IFSB since its establishment was also highlighted and commended. Zahid also presented the trends and developments in the global Islamic finance industry, and expounded on the IFSB’s current and upcoming work programme in supporting the industry’s stability and resilience, for which it closely collaborates with various regional and international partners and industry stakeholders.
The Session continued with an interactive panel discussion chaired by Prof. Volker Nienhaus, Honorary Professor, University of Bochum, Germany, and featuring Zahid ur Rehman Khokher, Ahmad Buchori, Advisor of Strategic Committee and Research centre, the Financial Services Authority of Indonesia (OJK), Dr. Rifki Ismal, Assistant Director, Islamic Economic and Finance Department, Bank Indonesia, Dr. Nagwa Sheikh Eldin, Assistant Secretary-General, IFSB and Achmad K. Permana, Secretary General, Indonesian Islamic Banking Association (ASBISINDO).
Prof. Volker Nienhaus started the session by sharing his observations on the growth of Islamic finance in various jurisdictions, the role of the IFSB, and its relevance to the industry players. He also commented on the emerging trends of the Islamic finance sector, which is expected to enhance financial inclusion especially through the greater use of fintech. The first panellist, Ahmad Buchori shared the issues and challenges of Islamic finance in Indonesia focusing on the current landscape of the Indonesian Islamic finance industry. He also explained the salient features of Islamic finance development roadmap for the period 2017 – 2019 to support the growth of the industry. Buchori further shared the implementation rate of the IFSB standards across the various sectors of the industry in Indonesia. His presentation ended by stressing the need to organise more platforms towards creating awareness of the IFSB’s activities, the issues and needs faced by the industry, as well as a call to strengthen the regulation of Islamic finance in non-banking sectors.
Dr. Rifki Ismal’s presentation focused on developing the Islamic social sector by optimising it to further enhance the Indonesian economy and public welfare. He underlined the potential role of integrating Islamic social finance and commercial finance through the various bodies currently managing Islamic social funds such as Hajj funds, Waqf, Zakat among others. He expressed the hope that it could further boost the growth and impact of Islamic finance at the local and global level. Dr. Nagwa Sheikh Eldin then presented key findings from the IFSB Standards Implementation Survey, which showed an encouraging growth trend of the overall implementation rate of IFSB standards across all sectors globally. She also shared the main challenges faced by regulatory and supervisory authorities in implementing the IFSB standards. In this context, she elaborated on IFSB’s wide ranging activities to support the standards implementation in the form of “Facilitating the Implementation of IFSB Standards (FIS)” workshops, Technical Assistance, Policy Advice, Outreach programme and most importantly, the E-learning portal covering nine IFSB standards. In the final presentation, Achmad Permana shared the current challenges faced by Islamic banks in Indonesia and the important role of the government and the regulators in order to further expand the industry to achieve its potential.
The session ended with discussions between the participants and panellists, where the industry players reaffirmed the important role regulators play to ensure the growth of the industry. There was also feedback on how the industry players would like to further participate in the activities of the IFSB, and a request for more platforms to be organised in the country to address and discuss key issues and concerns of the Islamic finance players.
The Engagement Session was held on 2 October 2017 at the head office of Bank Indonesia in Jakarta, back to back with the four IFSB Working Group meetings, hosted by Bank Indonesia. The Session, a collaboration with Bank Indonesia and the Financial Services Authority of Indonesia (OJK) - both Full Members of the IFSB, was attended by more than 80 participants from among the IFSB members and the Indonesian local financial community.
The next IFSB Industry Engagement Session will be held in Abu Dhabi on 22 October 2017, in conjunction with the IFSB Summit 2017, hosted by the Central Bank of UAE. For more information on the Session and the Summit, please visit www.ifsbsummit2017.com.