National and Global Islamic Financial Architecture:
Prolems and Possible Solutions for the OIC Member Countries
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Table ‎7.5: Information Infrastructure
No. Recommendations Specific Steps Implemented by
5.1 Accounting and
auditing standards
 Adopt AAOIFI standards for Islamic
financial institutions
 Adapt domestic accounting
standards to accommodate features
of Islamic financial transactions
 Regulators
 Domestic Accounting
standards boards
5.2 Disclosure and
Transparency
 Specific disclosure guidelines for
Islamic finance sector
 Require disclosure of Shariah
compliance of operations and
products
 Regulators
 Domestic Accounting
standards boards
5.3 Credit information
systems and rating
agencies
 Establish credit information
systems not only for debt but also
equity based financing
 Rating of Islamic financial
institutions and instruments
 Rating of Shariah compliance
 Public and private
credit information
systems
 Rating agencies
7.1.6. Consumer Protection & Financial Literacy
A robust consumer protection regime is necessary for the development of a sound financial
system. As Islamic financial products confer various rights and obligations to different parties
of the contract, the laws and regulations must entail that specific consumers are protected.
Among others, information disclosure on the contracts used and their structures should be
disclosed to consumers. As many consumers choose Islamic finance due to religious
convictions, one of the key issues in protecting consumers of the Islamic financial sector would
be to not only ensure Shariah compliance but its full disclosure. A related issue on the demand
side is to have financial literacy programs to increase awareness and the level of
understanding of Islamic financial transactions. Islamic financial products are new for
consumer in most jurisdictions and there is a need to educate the consumers about the
features of these products. Other than introducing the Islamic finance concepts in school and
college curricula, different stakeholders such as regulators, financial institutions, Islamic
finance trade associations can use various methods to disseminate knowledge on Islamic
financial products and operations.
A Shariah compliant deposit insurance scheme should be in place to protect appropriate
depositors of Islamic banks. There is, however, a need to have clarity on the eligibility and
nature of profit-loss sharing investment account holders to have deposit insurance.