National and Global Islamic Financial Architecture:
Prolems and Possible Solutions for the OIC Member Countries
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international cooperation to build Islamic liquidity management infrastructure at national and
international levels.
Information Infrastructure
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) was first
established as the Financial Accounting Organization for Islamic Banks and Financial
Institutions in 1991 in Bahrain by Islamic financial institutions to develop accounting, auditing
and governance standards for Islamic financial institutions. Other than the Shariah standards,
AAOIFI has issued 27 financial accounting standards, 7 governance standards, 2 codes of ethics
and one guidance note.
The Islamic International Rating Agency (IIRA) was established in Bahrain in 2005 to carry out
ratings for Islamic financial institutions and Islamic capital market products by incorporating
the unique features of Islamic finance. Other than providing credit ratings, IIRA also carries out
Shariah Quality Rating (SQR) to assess the status of Shariah compliance in different financial
institutions.
Human Capital and Knowledge Development
The Islamic Research and Training Institute (IRTI) was established by Islamic Development
Bank in 1983 to undertake and advance research and training that would enable economic,
financial and banking activities conforming to Shariah and promote economic growth and
development. One of the key functions of IRTI includes helping to develop a dynamic and
innovative Islamic financial services industry by contributing to basic and applied research.
The Global Islamic Finance Development Center of the World Bank based in Istanbul Turkey
was inaugurated in 2013. The Center is a knowledge hub for conducting research and training
and providing technical assistance and advisory services to World Bank Group client countries
interested in developing Islamic financial institutions and markets.
Facilitating Institutions
The Islamic Development Bank established in 1975 was one of the first Islamic financial
institutions with an objective to ‘foster socioeconomic development in member countries and
Muslim communities in non-Member countries in accordance with the principles of the
Shariah’.9 One of the strategic thrusts of the Islamic Development Bank identified in its Vision
1440H document was to ‘Expand the Islamic financial industry’. Over the years, IDB has been
instrumental in not only coming up with innovative instruments (such as Awqaf Properties
Investment Fund and Infrastructure funds), but it also has been instrumental in establishing
the key infrastructure institutions identified above (such as IICRCA, IIFM, IFSB and IILM).
Based in Bahrain, the General Council for Islamic Banks and Financial Institutions (CIBAFI)
was established in 1981 as a global association of Islamic financial institutions. CIBAFI aims to
foster sound industry practices among financial institutions and also promote the development