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Islamic Banking Now Regulated By IMF

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Islamic Banking Now Regulated By IMF

The International Monetary Fund (IMF) has incorporated Islamic banking saying it is systematically important.

IMF will begin subjecting Islamic financing to assessments and thus address their regulation and supervision.

The IMF said it views the growth of Islamic finance as an opportunity to strengthen financial inclusion efforts, deepen financial markets and develop new funding sources.

Islamic finance is estimated to have over $2 trillion of assets globally and is offered in over 60 countries, according to the IMF.

The Islamic banking system bans interest payments and pure monetary speculation.

IMF which until recently was only focusing on conventional banking; it has begun engaging with regulators in countries where Islamic finance is now deemed to be systemically important.

According to IMF experts, there is need for more consistency in applying Islamic finance rules, having previously warned over the complexity of some sharia-compliant products that could stifle growth and add to financial instability.

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