The International Association of Deposit Insurers (IADI) and the Islamic Financial Services Board (IFSB) have partnered to develop, and promote technical standards for the implementation of effective Islamic deposit insurance systems.

The memorandum of understanding (MoU) was signed by Dr Bello Lawal Danbatta, secretary-general, IFSB and David Walker, secretary general, IADI in Kuala Lumpur, Malaysia.

Under this agreement, areas of cooperation between the IFSB and IADI include:

 •     Development of prudential standards for Islamic deposit insurance systems

Collaborate to jointly develop the IADI-IFSB Core Principles for Islamic Finance Regulation: Effective Islamic Deposit Insurance Systems (CPIFR-IDIS), with the aim of providing guidance on the matter specifically to the members of both organisations, and the deposit insurance sector in general.

 •       Promotion for the implementation of prudential standards to facilitate the development of Islamic deposit insurance

Collaboration under this area can include organising joint workshops and programmes, and providing expertise for joint technical assistance missions. In addition, facilitating coordinated policy dialogues to regulatory and supervisory authorities in the member jurisdictions of the two organisations.

 
•      Awareness raising through knowledge sharing and organisation of executive programmes, workshops, seminars, etc.

To promote the exchange of information and knowledge-sharing to benefit from each organisation’s experiences and expertise, to the greatest extent permissible. Also, to enhance outreach to member jurisdictions for building awareness through joint organising and hosting of international conferences, seminars and forums on areas of mutual interest.

The IADI-IFSB MoU signing ceremony took place during the recently held inaugural Joint Working Group (JWG) Meeting of the CPIFR – IDIS. The JWG is guiding the development of CPIFR-IDIS, which aims to serve as an internationally recognised framework to facilitate the development and implementation of effective Shariah-compliant deposit insurance systems (SCDIS).

The Islamic Core Principles will enable deposit insurance providers to identify gaps in their existing deposit insurance practices, while also setting an international standard-setting benchmark to facilitate independent (or third-party) assessment on the effectiveness of SCDIS. The joint standard will complement the revised core principles by the IADI for the conventional deposit insurance systems, upon which they will be based. – TradeArabia News Service