IIFM membership for Iran

The admission of Iran, a major player in Islamic finance, is expected to provide a major boost to the IIFM, whose mission is to create and develop an international market of Islamic financial instruments by promoting and facilitating cross-border investment activity.

The membership of Bank Markazi Jomhouri Islami Iran (Central Bank of Iran) was approved at the fifth meeting of the Board of the IIFM, which is based in Bahrain.

The meeting was held recently in Bahrain, at the IIFM headquarters. It was chaired by Mr. D M Qureshi, Chairman of the IIFM.

The IIFM Board comprises top officials from monetary authorities and central banks of Bahrain, Brunei, Indonesia, Malaysia and Sudan, as well as the Islamic Development Bank.

The Board also includes several market players, which are Abu Dhabi Islamic Bank (UAE), Kuwait Finance House (Kuwait), Shamil Bank of Bahrain (Bahrain), Bank Islam (Malaysia) and El-Nilein Industrial Development Bank Group (Sudan).

Iran's membership also includes representation on the IIFM Board.

"We welcome the admission of Iran, which has been a major force in the global Islamic banking industry," said Mr. Qureshi.

Since the Islamic Revolution in 1979, Iran's economy and financial system have been functioning in compliance with Shari'a precepts.

More recently, Iran has introduced 'participation certificates', which are a substitute for interest-bearing bonds.

"The Iranian experience in developing Sharia-compliant financial instruments is very valuable to the global Islamic banking industry, in general, and the IIFM, in particular," said Mr. Abdul Rais Abdul Majid, Chief Executive Officer of the IIFM.

The board meeting also approved an agreement between the IIFM and Malaysia's Labuan International Financial Exchange (LFX), an offshore financial exchange.

The IIFM and LFX are to sign a memorandum of understanding (MoU) to facilitate the listing and trading of Islamic financial instruments.

The IIFM plans to sign similar protocols with other stock markets, including the Bahrain Stock Exchange.

The protocols are in line with a main objective of the IIFM to enhance cooperation between member countries.

The IIFM hopes to endorse several sukuk (Islamic bonds) issues, both sovereign and corporate, in the near future, said Mr. Abdul Majid.

The IIFM is also planning to organize a series of workshops in major Islamic financial markets, to enhance awareness about Islamic financial instruments and the importance of a vibrant Islamic capital market to the global Islamic banking industry.