Al Baraka Banking Group (ABG) has signed an agreement with the World Bank (WB) to start a research partnership for the benefit of global Islamic banking industry.
Part of a planned series of research projects, the partnership’s first initiative will be a study scrutinizing the risk-management challenges facing Islamic banks, with a special focus on Musharaka and Mudaraba under the profit-and-loss-sharing system.
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Al Baraka Banking Group president & chief executive Adnan Ahmed Yousif was quoted by The Saudi Gazette as saying: "This collaboration with the World Bank is yet another demonstration of the Group’s commitment to research and knowledge-building in the Islamic financial services industry.
"Al Baraka is recognized as a pioneer in the Islamic banking sector for its longstanding think tank, Al Baraka’s Annual Islamic Banking Symposium (The Nadwa).
"The Nadwa is the only platform of its kind that annually provides the industry with resolutions and fatwas, which form the basis of new products, standards and policies."
The research project will gather data from various countries where Musharaka and Mudaraba are being used in banking transactions.
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By GlobalDataIn addition, the project will also inspect the enabling legal and regulatory environment required to support the adequate risk management of Musharaka and Mudaraba.
The World Bank Islamic finance head Abayomi Alawode said: "We look forward to our collaboration with Islamic financial institutions, such as Al Baraka, drawing on their front-line experience in the use of Islamic financial products.
"Their insights will contribute to producing a study that will encourage innovation and contribute to the sustainable growth of the industry."
The research project is currently under progress and it is expected that its preliminary findings will be available in the first quarter of 2015.
