Iran to chair Islamic finance body IFSB in 2017

Press TV- The Islamic Financial Services Board (IFSB) says Iran will assume its chairmanship in 2017 – a move expected to help align practices in the country’s banking system with peers across Asia and the Middle East.

Reuters in a report highlighted an announcement by the IFSB Council as saying that Valiollah Seif, the governor of the Central Bank of Iran (CBI) will assume the IFSB chairmanship from January 1, 2017 with Bangladesh Bank governor Fazle Kabir as the deputy chairman.

The IFSB is one of the main standard-setting bodies for Islamic finance, setting prudential guidelines covering areas including governance, capital adequacy and liquidity risk management.

Years of isolation have led Iran to develop practices that can contrast with those in other Islamic financial centers, but a prominent role within the Kuala Lumpur-based IFSB could help narrow those differences, Reuters added in its report.

Since 1983, Iran’s entire banking system has followed Islamic principles, which includes 34 Islamic banks that held total assets of Rials 14,451 trillion ($448 billion) as of March.

This represents around a third of total Islamic banking assets globally, although Iran’s version of Islamic finance can differ with what is observed in other Muslim-majority countries, Reuters further wrote in its report.

For instance, Islamic finance is interpreted by scholars around the world to ban the payment of interest. This is also observed in Iran, although banks charge a profit rate that is periodically set by the central bank, a measure partly borne out of efforts to curb high inflation.