MANAMA: Sharia standards are essential to Islamic finance because they promote harmonisation of international standards, enhance users' confidence and encourage growth in demand. That was the message from Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) chairman Shaikh Ebrahim bin Khalifa Al Khalifa at the opening of the AAOIFI conference at the Gulf Hotel yesterday.
"Most importantly, Sharia standards provide clarity to the industry on rules and principles that must be incorporated into Islamic financial operations so as to ensure full compliance with Sharia principles," he said.
"AAOIFI standards are now being followed - either as part of regulatory requirements or as internal guidelines - by all the leading Islamic financial institutions across the world, including the Middle East, Asia Pacific, South Asia, Central Asia, Europe and Africa.
"The wide application of AAOIFI standards has resulted in progressive standardisation and harmonisation of international Islamic practices," he said.
"This has also placed AAOIFI at the forefront of the international Islamic finance industry's continuing development and progress.
He said that under the leadership of AAOIFI secretary general Dr Mohammad Nedal Alchaar, the organisation had indeed achieved much.
"This includes the long list of standards that we have issued, the robust certification programmes that support the application of standards, the professional development programmes and the technical understanding of the standards and their widespread application.
"We have seen AAOIFI institutional membership grow from 72 to 216 and increased harmonisation of international Islamic finance practices.
Central Bank of Bahrain (CBB) Governor Rasheed Al Maraj said that under Dr Alchaar.
AAOIFI had achieved many milestones for the Islamic finance industry.
"The CBB and AAOIFI have a common interest in promoting the interests of the Islamic finance and developing the industry," he said
"These conferences are a key part of that as the AAOIFI bridges the gap between theory and practice.
"I am pleased that this conference has chosen a number of topics including delinquency in debt.
"Delinquency in the sukuk market has been a major issue since the financial crisis and a number of legal issues have been raised about sukuk.
"In spite of uncertainty in the economy in recent years the Islamic finance industry will continue to grow and create demand," he said.
"Bahrain will maintain its leadership in the Islamic finance industry and I thank AAOIFI for building the infrastructure which allows this growth," he said.