MAS issues guidelines on Islamic Banking

This is the press release by Monetary Authority of Singapore Published May 8, 2009

MAS issues guidelines on application of banking regulations to Islamic banking

At the 6th Islamic Financial Services Board (IFSB) Summit on 7 May, MAS announced that it has issued a set of Guidelines on the Application of Banking Regulations to Islamic Banking. The Guidelines consolidate the various regulations and clarifications which MAS has issued, and offers specific information on the regulatory treatment of various Islamic structures. This set of Guidelines will provide greater clarity and certainty for financial institutions offering Islamic banking products in Singapore. MAS has also issued two regulations clarifying that, with immediate effect, Singapore-based banks may enter into Diminishing Musharaka financing and Spot Murabaha transactions. In addition, MAS has ensured equal tax, regulatory and liquidity treatment of the Singapore dollar sukuk with Singapore Government Securities, effective immediately. Taken together, these various changes will allow banks to conduct a wide range of Islamic financing activities, and to have greater flexibility in structuring instruments to meet their risk management needs. Please view the Guidelines here: http://www.mas.gov.sg/resource/legislation_guidelines/banks/guidelines/Guidelines%20-%20Islamic%20Banking%20May09.pdf Re-disseminated by The Asian Banker