Towards Developing a Template for Islamic Financial Sector Assessment Programme (iFSAP)

The FSAP, initiated by the IMF and the World Bank, has been implemented internationally including the IDB and IFSB member countries. The initiative is beneficial to further improve the quality of the financial industry as well as to contribute to the global financial stability. The rapid growth of Islamic finance internationally poses new challenges to the supervisory authority particularly with the growing significance of the newly developed industry. Operationally, the development of the Islamic financial industry should fulfill certain criteria in promoting operational soundness and efficiency. The initiative on iFSAP is deemed very crucial for providing appropriate understanding on how the Islamic financial system can deliver benefits and compatible to the international financial stability initiatives. The implementation of iFSAP in further instances may provide developmental view to the financial authorities in particular countries operating Islamic financial system.