September 04, 2014
Manama: For the second year in a row, Bahrain has been named the GCC’s leading Islamic finance market and second out of 92 countries worldwide, according to the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI).
As well as being highly ranked in terms of the Kingdom’s commitment to research and training and local awareness of the industry, Bahrain was also ranked as having the best governance in Islamic finance in the world, with the report praising the well-established regulatory framework covering all sectors, and high levels of disclosure.
The IFDI report, which was released today at a panel session at the Global Islamic Finance Forum (GIFF 2014) in Kuala Lumpur (Malaysia), is the only numerical measure representing the overall health and development of the Islamic finance industry worldwide. The IFDI is a measure of five key components that combine to depict the bigger picture of the state of Islamic finance in 92 countries: Quantitative Development, Governance, Corporate Social Responsibility, Knowledge and Awareness.
H.E. Rasheed Al Maraj, Governor of the Central Bank of Bahrain (CBB) said: “In 2001, the Central Bank’s predecessor, the Bahrain Monetary Agency, played a leading role in the development of regulatory regimes for the workings of Islamic financial institutions for more than two decades and contributed to the introduction of sharia-compliant products and became the first central bank in the world to develop and issue sukuk and Bahrain has continued to play a leading role in the introduction of these products through issuances. The ranking Bahrain has received is testament to the role we play in the Islamic finance industry.”
H.E. Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the Bahrain EDB commented: “We are delighted at the ranking that Bahrain has received and the recognition of the investment that the Kingdom has made in developing the industry both here and internationally.
“Islamic finance has an important role to play within the wider financial sector in Bahrain and the GCC and the growth that the sector has seen is testament to that. We are committed to helping the industry to grow in Bahrain, to working towards addressing ways of boosting international growth and also to working with countries across the world as they look to establish Islamic finance industries in their own markets.”
Mr. Khalid Hamad, Executive Director of Banking Supervision, CBB, commented: “The Islamic finance sector continues to expand rapidly, both regionally and internationally, and we are proud of the role we play in supporting its development, we will continue studying ways in which we can help to develop the industry – both here in Bahrain, by ensuring regulation continues to evolve and taking steps to strengthen the Kingdom’s Islamic finance institutions and internationally, by working with countries that wish to introduce Islamic banking. For example, in April this year we agreed a joint framework with the United Kingdom to enhance collaboration on Islamic finance at the UK-Bahrain Islamic Finance Summit in London.”
Bahrain is home to the largest concentration of Islamic financial institutions in the world, including 32 Islamic Banks and Takaful and Retakaful firms.
Bahrain is also host to a number of organisations dedicated to advancing Islamic finance policy and regulation, such as the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), the International Islamic Financial Market (IIFM), the General Council for Islamic Banks and Financial Institutions, the Islamic International Rating Agency (IIRA), the Thomson Reuters Global Islamic Finance Hub and Deloitte’s Islamic Finance Knowledge Center, making the Kingdom a knowledge hub for the industry.
For more information and to read 2014 report, please visit http://www.zawya.com/islamic-finance-development-indicator/
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Notes to editors
The Central Bank of Bahrain (CBB) is a public corporate entity established by the Central Bank of Bahrain and Financial Institutions Law 2006, created on September 7, 2006 by the issuance of Decree No. (64) of 2006. The CBB ensures monetary stability through Bahrain’s long-standing fixed exchange rate policy against the US dollar, first established in 1980. This has provided Bahrain with a high degree of economic and price stability, while encouraging the sound growth of the national economy. A key objective of the CBB is to ensure the continued soundness and stability of financial institutions and markets. As the country’s single financial services regulator, covering banking, insurance, and the capital markets, the cornerstone of CBB’s policy is the implementation of international best practice in all aspects of financial supervision, a policy which has helped Bahrain earn its international reputation as the best-regulated financial jurisdiction in the Middle East.
For more information about the Central Bank of Bahrain please visit www.cbb.gov.bh
About The Bahrain EDB
The Bahrain EDB is a dynamic public agency with an overall responsibility for attracting inward investment into Bahrain, and is focusing on target economic sectors in which the Kingdom offers significant strengths.
Key areas of focus include manufacturing, ICT, and logistics and transport services as well as other sub-sectors. The Financial Services sector in Bahrain is particularly strong and the EDB supports in the continuing growth of the banking industry and key sub-sectors, including Islamic Finance, Asset Management, Insurance and Re-Insurance.
For more information on the Bahrain EDB visit www.bahrainedb.com; for information about Bahrain visit www.bahrain.com
ICD Thomson Reuters Islamic Finance Development Indicator Background
The ICD Thomson Reuters Islamic Finance Development Indicator is a composite weighted index that measures the overall development of the Islamic Finance industry by providing an aggregate assessment of the performance of all its parts, in line with the objectives of Islamic principles.
It is a global level composite indicator with country and unit specific level indicators. The composite indicator is released annually, featuring a full report detailing each country and unit specific level indicator and their raw numbers.
Each indicator within the composite indicator’s constituents will be equally weighted and aggregated, i.e. all variables are given the same weight. In addition, normalization is required prior to any data aggregation as the variable indicators in a data set have different measurement units.
For the Country Composite Indicator level, country indicators are normalized to allow for meaningful comparisons over time for a given country and between countries. Various economic indicators (e.g. population size) will be considered while measuring the health of the Islamic finance industry in each country.
About Thomson Reuters
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The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral organization, part of the Islamic Development Bank (IDB) Group. ICD was established in November 1999 to promote economic development of its member countries in accordance with the principles of the Sharia through private sector development. ICD encourages the establishment, expansion and modernization of private enterprises through financing private sector enterprises or projects. Projects are selected based on their contribution to economic development considering factors such as creation of employment opportunities and contribution to exports. ICD also provides advice to governments and private sector groups on policies to encourage the establishment, expansion and modernization of private enterprises, development of capital markets, best management practices and enhance the role of market economy. ICD operations complement the activities of the IDB. For more information, visit:
Central Bank of Bahrain (CBB)
Contact: External Communications Unit
Tel: +973 17547357/17547360
Contact: External Communications Unit
Tel: +973 17547357/17547360
Noora Abul, Bahrain Economic Development Board
Tel: +973 17 589 903
Tel: +973 17 589 903