A report issued by the Arab Monetary Fund showed that the Arab countries acquired more than 55 percent of the volume of the Islamic financial industry in the world. According to the report, Sharia-compliant banks in Arab countries operate within the banking sector, as they represent local systemic importance in the UAE, Saudi Arabia, Sudan, Qatar, Bahrain, Kuwait, and Jordan.
The Fund's report, entitled "Using Sukuk to Support the Capital Base of Islamic Banks", addressed the challenge facing banks in general, and Islamic banks in particular, in meeting the regulatory requirements issued by the "Basel Committee on Banking Supervision", especially with regard to capital adequacy ratios. The report showed that many of the financial tools and products developed by the traditional financial industry to support bank capital often do not meet the sharia requirements, which precludes the possibility of their use by Islamic banks. Likewise, many Sharia-compliant financial instruments and products do not meet the conditions for being considered part of the basic or supplementary capital, which necessitates Islamic banks to search for innovative tools that meet the legal and technical aspects to support their capital bases.
Source (Al-Sharq Al-Awsat Newspaper, Edited)
