The recent addition to the Islamic Finance is the Central Bank of Saudi Arabia, and this step could go a long way in putting up to standard the practices of the industry and facilitate smoother dealings across border in the Kingdom.
AAOIFI stated last Sunday that it had successfully welcomed to the group the Saudi Arabian Monetary Agency, making it a member of the institute. AAOIFI is an acronym for the Accounting and Auditing Organization for Islamic Financial Institutions which is based in Bahrain.
Islamic services account for half of the assets in the banking system for the Kingdom. However, the regulator doesn’t necessarily differentiate objectively conventional banks and Islamic banks. It applies the same strains and measures to them all.
Interstate trade a strong possibility
Known on religious creeds such as a ban on outright speculation and gambling are followed by the Islamic finance group.
The move was validated by SAMA in a statement issued separately without making clear if it had plans of making the laws and standards of AAOIFI enforceable or otherwise.
The leaders in Saudi have remained focused on local affairs but enforcing AAOIFI standards could ease their break into other Muslim countries.