MANAMA: In his nine years as secretary general of the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), Dr Mohammad Nedal Alchaar has seen massive changes and developments in the industry.
"What the Islamic finance industry needed back then was to develop international financial standards and AAOIFI has gone a long way to achieving this with Islamic finance now not only growing across the Muslim world but developing in the West because of its efficient practice and strong regulatory standards," he said.
Dr Alchaar is to shortly stand down from his current position to take up a post as trade and economic minister in Syria.
"AAOIFI has taken significant steps to encourage the application and enforcement of its standards throughout the world," he said.
"We have done so by producing high-quality standards that are internationally recognised and we have made particular efforts to ensure that our standard setting process constitutes strong co-operation amongst interested parties.
"As such, this has resulted in our standards being implemented in the leading Islamic banking and finance centres globally, such as Bahrain, Sudan, Jordan, Malaysia, Qatar, Saudi Arabia, Dubai, Syria, Lebanon, Singapore, and South Africa where they are either mandatory or used as a guideline by the regulators.
"It is only through international recognition and consistent application of these standards will the Islamic banking and finance industry realise the full benefits of accurate and transparent financial reporting, and fulfil its mission of bringing credible solutions to the masses."
But while he believes the organisation has done a lot to promote the remarkable growth of the Islamic finance industry he thinks there is a lot still to be achieved.
"These has to be a process of financial deepening in the sukuk market that has to be available for investment because it is necessary to put liquidity into the market," he said.
"There is also a need to create an efficient secondary sukuk market. That is a must because a lot of investors in sukuk buy them and hold onto them until they mature. We need a market where they are regularly traded," he said.
He said the industry had to continue to look at the challenge of education and awareness and address its limitations and its potential.
"Islamic retail banking has to become stronger and that is going to be the test for the future," he said.
"We have to look at the masses of people who are currently not banked and bring them into the system.
"Only by expanding the retail sector of our industry can we build the base which will allow us to deepen our wholesale banking side," he said.