BSP signs MOU with Islamic banking standard-setting body

The Bangko Sentral ng Pilipinas (BSP) recently signed a memorandum of understanding (MOU) to collaborate with an Islamic finance standard-setting body as part of its efforts to further promote Islamic banking in the Philippines.

“The BSP’s MOU with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) covers the possible adoption of relevant AAOIFI standards by the local Islamic banking and finance industry, and cooperation in the areas of capacity building and technical assistance,” said BSP Governor Benjamin E. Diokno.

“BSP initiatives towards an enhanced Islamic banking and finance industry are in line with the vision of Republic Act No. 11439 or the Islamic Banking Law enacted in August 2019,” the Governor explained.

BSP Deputy Governor Chuchi G. Fonacier and Sheikh Ebrahim Bin Khalifa Al Khalifa, Chairman of the AAOIFI Board of Trustees, signed the MOU during a virtual ceremony held as part of the AAOIFI–Islamic Development Bank 16^th Annual Conference.

The AAOIFI is a non-profit standard-setting body established to develop, maintain, and promote standards on Shari’ah, accounting, auditing, governance, and ethics for Islamic financial institutions.

The organization is supported by several institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms from over 45 countries.

“As banking system supervisor, the BSP recognizes the importance of establishing formal ties with AAOIFI as this strengthens the BSP initiatives on Islamic banking and finance in the country,” according to Governor Diokno.

Apart from the collaboration with AAOIFI, the BSP is also an associate member of the Islamic Financial Services Board, an international standard-setting body that issues global prudential standards for the Islamic financial services industry, particularly in the areas of banking, capital markets and insurance. (BSP)