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BANKING & FINANCE
Islamic Banking
Islamic finance and banking remains
at the heart of the country’s interest
in growing the overall finance sector
alongside
conventional
banking
through various efforts led by both
public and private institutions.
The industry has been identified as one
of the key focus areas under the Brunei
Darussalam Financial Sector Blueprint,
specifically efforts in strengthening
regulatory and legal framework as well
as ensuring standardisation of Islamic
products and services aligned with
international practices. The blueprint
affirms the country’s vision and
commitment to strengthen its position
as an international Islamic financial
hub with a diverse foreign presence
and higher level of participation in the
domestic Islamic financial markets,
particularly in the
sukuk
and
Takaful
market.
Brunei Darussalam will continue
to play its role in accelerating the
internationalisation of Islamic finance
through several initiatives, such as
introducing more Syariah-compliant
financial products and services that
meet diverse global demands.
The
country’s
Islamic
financial
ecosystem comprises Islamic banks,
Takaful
operators, Islamic investment
dealers,
sukuk
and other ancillary
services. TheBrunei DarussalamCentral
Bank (BDCB) and local Islamic financial
institutions join the international
community
through
membership
under the Islamic Financial Services
Board (IFSB).
At present, Brunei has a two-tier Syariah
governance structure comprising the
Syariah Financial Supervisory Board
(SFSB) with BDCB as secretariat and an
internal Syariah Advisory Body (SAB).
The SFSB, established under the
Syariah Financial Supervisory Board
Order, 2006, has a mandate to
ascertain the Islamic law on any
financial law, to issue rulings referred to
it, and to advise on any Syariah issues
relating to Islamic financial businesses,
activities or transactions.
An internal SAB within each Islamic
financial institution may consult with
the SFSB, through BCDB, on Syariah
matters relating to any business which
is based on Syariah principles.
Islamic finance activities are governed
under the Islamic Banking Order (2008)
for Islamic banks and Takaful Order
(2006) for the
Takaful
sector. Islamic
capital market activities are governed
under the Securities Market Order
2013 and its supplementary legislation
Securities Markets Regulations 2015.
In order to prepare a well-established
infrastructure for Islamic finance, the
Syariah Governance Framework was
introduced to ensure that the structure,
processes, products and services
of Islamic financial institutions are in
accordance with Syariah principles.
Audits will be conducted to ensure
the products and services provided
by these financial institutions are in
compliance with Syariah principles.
Financial institutions will also need
to adhere to the product approval
guidelines, which include a set of
procedures when determining the
category of approval required for
new Islamic financial products or any
enhancement or variation made to an
existing product.
The Syariah Governance Framework
hopes to meet the expectations
of BCDB on the Islamic financial
institutions’
Syariah
governance
structure, processes and arrangements
to ensure that all its operations and
business activities are in accordance
with
Hukum Syara’
.
Brunei has also made efforts in shaping
future leaders, experts and innovators
in the area of Islamic finance and
leadership through the establishment
of the Brunei Institute of Leadership
and Islamic Finance (BILIF). Under
the purview of BDCB, BILIF provides
learning solutions, events and services
for human capacity development
in the areas of Islamic finance and
leadership.