IFSB Summit 2019: Global cooperation is the way forward for sustainable Islamic finance development

18 November 2019, Jakarta – H.E. Dr. Perry Warjiyo, Governor of Bank Indonesia (BI) closed the IFSB Summit 2019 by the remarks that global cooperation is needed among the regulators and key players within the Islamic financial system to embrace the technological innovation. By doing so, Islamic finance development can be sustained in the digitalisation era.

 In the final panel session, themed “The Way Forward for Islamic Finance”, the chairperson, H.E. Perry Warjiyo, Governor of BI who highlighted the acceleration of the global Islamic finance development and on how to accelerate faster the Islamic finance development through the technological innovation and the Sustainable Development Goals (SDGs) agenda. The session then further discussed the strategy and policy directions on how to cope with many challenges arising from the digital technology and its regulatory framework through the country experience. H.E. Nor Shamsiah Mohd Yunus, Governor of Bank Negara Malaysia (BNM) was the first panellist who shared Malaysia experience whereby the Islamic finance has been developed since two decades ago with the motivation of the financial inclusion for the Muslim community. She also highlighted that the Islamic finance has reached the critical mass by a lot effort by the regulators and market players by creating the robust ecosystem coupled with the sound regulations to spearhead the Islamic finance development in Malaysia. H.E. Nor Shamsiah also shared that Malaysia has the blueprint that is needed for promoting the sustainable development and spurring the innovation in the Islamic financial industry. H.E. Dr. Sri Mulyani, The Minister of Finance of Indonesia, who shared her thoughts that Islamic finance has a lot of opportunities within the global context as Islamic economic and finance system is based on the behaviour not only motivated by narrow defined economic motives, but also the ulterior and beliefs motive, which is compatible with soul-searching with global capitalism system. She also shared her views that within the national system, although Indonesia was a bit late in developing Islamic financial system, Indonesia can learn from the experience from the leading countries for strengthening the regulatory framework for the Islamic finance development. H.E. Dr. Sri Mulyani further highlighted investment instruments such as retail sukuk and green sukuk with the tax neutrality are promising in Indonesia with the growing middle income class and millennials who are investment and tax savvy. With that regard, the key strategy is to deepening the financial instruments by creating education, providing more diversified instruments, and creating an efficient transaction.  H.E Tahir bin Salim bin Abdullah Al Amri, Executive President of Central Bank of Oman, shared his experience in growing the Islamic financial industry in Oman whereby Oman has been progressing the Islamic financial industry since 2012. He also expressed his thought that Oman has huge potential to grow the Islamic financial industry by creating equal level playing field with conventional counterparts, and conducive environment by embracing the technological development. Mr. Omar Mustafa Ansari, Secretary General of Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) highlighted AAOIFI’s role in strengthening the Islamic finance regulatory framework by mainstreaming the regulation for the accounting and transparency aspects as the guidance for the market players. H.E. Dr. Perry Warjiyo closed the session by giving the remarks that the global cooperation is the way forward for Islamic finance development to embrace the technological innovation.

Prior to the final session, there was the four session themed, “Emerging The Technology and Innovation in Islamic Finance: Opportunities and Risks”. This session was chaired by Mr. Fauzi Ichsan, CEO of Indonesia Deposit Insurance Cooperation (IDIC), who set the background by highlighting the emerging trend of the technology by recognising the Shari’ah principles as well as prudential regulation. Mrs. Salma Abbasi, CEO of eWorldwide Group, Islamic finance development has to be aware of the technological innovation opportunities to create the social benefits and impacts for the global Sustainable Development Goals (SDGs). Sheikh Nizam Yaqubi, Prominent Shari’ah Advisor, expressed his views that there should be no debate for the Shari’ah permissibility over the technological innovations as it is permissible within the Shari’ah law. Therefore, Islamic finance should benefit from the technological innovations for positive development. Mr. Aamir A. Rehman, Senior Advisor, the United Nations Development Program (UNDP) shared his views that digitization of finance can be harnessed for the Islamic finance development in promoting the global SDGs agenda and greater financial inclusion. Mr. Arup Charterjee, Principal Financial Sector Specialist, Asian Development Bank (ADB) expressed his ideas that that the financial instruments have to be blended with the technological innovations with proper risk management set by the regulators in creating the social impacts and cater the human needs.

Copyright Press Releases 2019