The Bangko Sentral ng Pilipinas (BSP) has approved the reporting, finance and transaction guidelines for the country’s Islamic banking sector to “provide clarity”.
The new central bank Circular No. 1139, signed by BSP Governor Benjamin E. Diokno on Wednesday, March 23, applies to Islamic banks and Islamic banking units (IBUs) to be put up by conventional or non-Islamic banks.
The guidelines on the treatment of Islamic banking-related specific accounts include Islamic financing receivables and contracts based on Shari’ah principles such as Murabahah, Tawarruq, Salam, Istisna’a, Qard Hassan, Ijara, Ijara Muntahia Bittamleek, Mudarabah, and Musharakah.
It also included guidance on the balance sheet accounts of Islamic deposits, profit sharing investment account, Sukuk payable, Zakat payable, among others.
The circular clarified the segregation of funds, books and records of IBUs from that of its conventional parent bank as well as the accounting treatment.
The BSP also outlined the of the Financial Reporting Package for both Islamic banks and IBUs.
“To faciliate the generation of industry statistics on the Islamic banking system, selected information on accounts and transactions of an (Islamic bank) and IBU will likewise be separately reported in a supplemental report,” said the BSP.
The BSP has set an observation period of June 30, 2022 until Dec. 31, 2023 on the submission of the supplemental report.
The BSP earlier announced its collaboration with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), an Islamic finance standard-setting body, to accelerate the growth of Islamic finance in the Philippines.
The BSP signed a memorandum of understanding (MOU) with AAOIFI for the possible adoption of relevant AAOIFI standards by the local Islamic banking and finance industry.
Republic Act No. 11439 or the Islamic Banking Law was enacted in August 2019.
Credit belongs to : www.mb.com.ph