The Islamic Financial Services Board (IFSB) is currently in the process of revising its Capital Adequacy Standard (IFSB-2) for institutions offering Islamic financial services (IIFS), which was issued in 2005. The IFSB Secretary-General Mr. Jaseem Ahmed stated that, “Parallel to the developments taking place in the Basel Committee, we started our revision process in January 2011″.
He added that the adoption of components of capital proposed by the Basel III for IIFS need further deliberations by the stakeholders of the Islamic financial services industry. He highlighted specific issues related to the appropriate treatment of subordinated debt, hybrid debt capital, convertible contingent capital and other types of Shari`ah-compliant instruments/Sukuk as a part of capital. These issues are among those identified by the IFSB working group entrusted with the task of revising IFSB-2. The final draft of the revised document is planned for issuance by the IFSB Council in 2013. (Press Release)