40th Meeting of the Council MINUTES

Minutes of the 40th Meeting of the Council of

Islamic Financial Services Board (IFSB)
9 June 2022 | 2:00 – 5:00pm (Pakistan time)

Present
1. H.E. Dr. Murtaza Syed
Acting Governor, State Bank of Pakistan
Chairman of the IFSB Council

2. H.E. Dr. Perry Warjiyo

Governor, Bank Indonesia
Chairman of the IFSB Executive Committee

3. Dr. Sami Al-Suwailem

Acting Director General IsDB Institute and Chief Economist IsDB Group
Islamic Development Bank

4. Mr. Khalid Hamad

Executive Director of Banking Supervision, Central Bank of Bahrain

5. H.E. Abu Farah Md. Nasser

Deputy Governor, Bangladesh Bank

6. H.E. Rokiah Badar

Managing Director, Brunei Darussalam Central Bank

7. Ms. Hanadi Khaled Ahmed (virtual)

In-charge of the Arab and Islamic Institutions and member of the National Shariah
Committee, Governor's Office
Banque Centrale de Djibouti

8. Mr. Mohamed Aboumoussa

First Sub Governor, Central Bank of Egypt

9. Mrs. Qismah Salih Ali

Director General, Banking Supervision, Central Bank of Iraq

10. Mr. Adnan Y. Naji

Consultant of the Banks Supervision Department, Central Bank of Jordan

11. H.E Basel Al Haroun

Governor, Central Bank of Kuwait

12. Dr. Ali Abusalah Elmabrok Amreeghah

Head of International Economics Division, Research and Statistics Department
Central Bank of Libya

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13. H.E. Nor Shamsiah Mohd Yunus

Governor, Bank Negara Malaysia

14. Mr. Ramsamy Chinniah

Director, Supervision Department, Bank of Mauritius

15. Mr. Badr Nabil

Deputy Director, Banking Supervision Directorate
Bank Al - Maghrib

16. H.E. Aishah Ndanusa Ahmad

Deputy Governor, Central Bank of Nigeria

17. H.E. Tahir Salim Abdullah Al Amri

Executive President, Central Bank of Oman

18. Mr. Hisham Al-Mannai

Executive Director, Financial Institutions Supervision Division
Qatar Central Bank

19. H.E Dr. Fahad Abdallah Almubarak

Governor, Saudi Central Bank

20. H.E. Hussein Yahya Jangoul

Governor, Central Bank of Sudan

21. H.E. Khaled Mohamed Balama

Governor, Central Bank of the United Arab Emirates

22. Mr. Riswinandi

Chief Executive of Non-Bank Financial Industry Supervisor and Member of the
Board of Commissioners, Indonesia Financial Services Authority

23. Dr. Majid Eshghi

Chairman, Securities and Exchange Organization, Iran

24. Mr. Almas Zholamanov

Director, International Affairs Division,
Astana International Financial Centre Authority

25. Mrs. Sharifatul Hanizah Said Ali

Executive Director, Islamic Capital Market Development, Securities Commission
Malaysia

26. Mr. Sabiu Bello Abubakar

Deputy Commissioner, Technical, National Insurance Commission, Nigeria

27. Mr. Bello Hassan

Managing Director/CEO, Nigeria Deposit Insurance Corporation
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28. Mr. Ahmad Alenizi

Deputy Assistant for Strategy & International Affairs, Capital Market Authority,
Saudi Arabia

29. Mr. Mehmet Zahid Samancıoğlu

Executive Director, Central Bank of the Republic of Turkey

30. Mr. Hüseyin Ünal

Head, Islamic Finance Department, Private Pension Regulation and Supervision
Authority (IPRSA), Republic of Turkey

31. Mr. F. Christopher Calabia, Chief Executive, Dubai Financial Services Authority

Absent with Apologies

32. H.E. Dr. Abdolnaser Hemmati

Governor, Central Bank of the Islamic Republic of Iran

33. H.E. Madina Abylkassymova

Chairperson, Agency of the Republic of Kazakhstan for Regulation and
Development of the Financial Market

34. H.E. Cheikh El Kebir Moulay Taher

Governor, Central Bank of Mauritania

35. H.E. Mehmet Ali Akben

Chairman, Banking Regulation and Supervision Agency, Republic of Turkey

Secretariat

1. Dr. Bello Lawal Danbatta, Secretary-General

2. Dr. Rifki Ismal, Assistant Secretary-General, Technical & Research
3. Mr. Suhail Issa Al Zadjali Assistant Secretary-General, Implementation &
Resources
4. Mrs. Ida Shafinaz Ab. Malek, Member of the Secretariat, Strategic Planning &
Governance, Implementation & Resources
5. Ms. Nur Khairun Nissa Md Zawawi, Member of the Secretariat, Strategic Planning
& Governance, Implementation & Resources

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Recitation from the Holy Qur’an

1. The 40th Council Meeting started with a recitation from the Holy Qur’an.

Welcoming Remarks from the Chairperson

2. The Chairman, H.E. Dr. Murtaza Syed, Acting Governor of the State Bank of Pakistan
(SBP) welcomed the members to the meeting.

3. The Chairman welcomed H.E. Hussein Yahya Jangoul,

Governor of Central Bank of Sudan and Dr. Majid Eshghi, Chairman of Securities and
Exchange Organization, Iran who attended the Council meeting for the first time.

4. The Chairman informed that the SBP had originally planned to organise the 40th
Council meeting and 20th General Assembly physically in Pakistan on 25 May 2022.
However, since these meetings coincided with the World Economic Forum in Davos,
the meetings had to be deferred. After further consultation with the IFSB Secretariat,
the SBP decided to conduct the meetings online due to limited time available after
rescheduling the meeting. The Chairperson also invited all honourable Council
members to the 41st Council meeting which is planned to be held physically in
Pakistan, in December alongside a number of side events including the Regulators
Roundtable. The SBP and the Secretariat will share further details of the overall
programme after the date of the 41st Council meeting has been finalised.

5. Continuing the legacy of his predecessor, H.E. Dr. Reza Baqir, the Chairman
remarked that with the active involvement and support from the Council members,
we will together ensure the IFSB continues to grow steadily as a robust and
progressive standard-setting body.

6. The Chairman also thanked the Council members who have just attended their IILM
Governing Board meeting in Abu Dhabi, United Arab Emirates (UAE) and appreciated
their commitment and participation in the Council meeting to discuss further about the
IFSB and the development of Islamic finance industry.

7. The Chairman also took the opportunity to thank several heads of institution including
Governor, Saudi Central Bank (SAMA), who attended the Council meeting based on

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his personal request despite having other official commitments.

Approval of the Agenda of the 40th Meeting of the Council

8. The Chairman invited the Council members for feedback on the meeting agenda.

Resolution 1:
The Council approved the Agenda of the 40th Meeting of the Council.

Approval of the Minutes of the 39th Meeting of the Council

9. The Chairman invited the Council members to provide their feedback on the Minutes
of the 39th meeting.

Resolution 2:
The Council approved the Minutes of the 39th Meeting of the Council.

Status Report on Key Resolutions Adopted at the 39th Meeting of the Council

10. The Secretary-General (SG) reported that to date, the Secretariat has taken action
on all resolutions adopted at the 39th Council meeting. The SG also informed that the
status report has been circulated alongside the meeting documents. He highlighted
several key resolutions which include the approval on the Strategic Performance Plan
2022-2024 (SPP 2022-2024). He informed that the document has been circulated to
the members and the public version has been uploaded on the IFSB website. Another
important key resolution was on the appointment of the new TC members, where the
Secretariat has subsequently issued the appointment letters to the newly appointed
members. He added that the Secretariat has also updated the list of IFSB members
and issued a press release pertaining to the new members’ admission.

Resolution 3:
The Council took note of the Status Report on Resolutions Adopted at the 39th
Meeting of the Council.

EC Chairman Report: Progress on Key IFSB Transformation on Policy,

Organizational and Human Capital and Resolutions Adopted at the 7th Meeting of the
Executive Committee (EC)

11. The Chairman invited the H.E. Dr. Perry Warjiyo, Governor of Bank Indonesia who is
also the Chairman of the Executive Committee (EC), to present the progress of the
transformation agenda and status report on the resolutions adopted at the 7th EC
meeting.
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12. The EC Chairman shared the transformation progress during the current term of the
EC (2021-2022) encompassing the policy, organisation and human capital
transformation. Among the agenda items discussed in the 7th EC were i) new IFSB
Consultative Group, ii) IFSB Shariah Board, iii) IFSB Business Continuity Plan,
iv) Internal Control Function, v) New Manpower Requirement, and vi) IFSB Code of
Conduct and Internal HR Committee. He also updated the Council on the resolutions
adopted in the said meeting.

13. The Chairman thanked the EC Chairman for the comprehensive report.
Resolution 4:
The Council took note of the progress of the IFSB transformation.

Resolution 5:
The Council took note of the resolutions adopted at the 7 th Executive Meeting.

Agenda 1: Economic and Financial Stability Issues

i. IFSB Stability Report 2022

14. The SG presented a memo on IFSB Stability Report 2022. He informed that based
on the TC’s guidance to improve the quality of the Report, a Quality Improvement
Committee (QIC) has been formed which consists of 18 members from the Regulatory
and Supervisory Authorities (RSAs).

15. Central Bank of Egypt (CBE) informed that they have provided their feedback and
requested for the following points to be included in the Report; i) handover
assessment index for the Islamic banking stability, ii) an analysis on the importance
of Islamic banking statement, and iii) stress-test of the Islamic banking sector for
different risks. The SG took note of the feedback and will incorporate it in the Report.

16. Bank Negara Malaysia (BNM) requested the Secretariat to improve the overall
planning process for the future Stability Reports preparation. This is to ensure that
the RSAs and the QIC are given sufficient time to respond and provide their feedback
on the draft Report.

17. The Islamic Development Bank (IsDB) suggested for the Secretariat to expand the
section on the comparison between Islamic financial industry versus conventional
industry. This will give an overall view on the performance of Islamic finance industry
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compared to their peers in the conventional industry. The IsDB added that during
crises and turmoils, the financial industry particularly players involved in or portfolios
related to equities tend to outperform their conventional counterparts.
Resolution 6:
The Council resolved to approve the IFSB Stability Report 2022 and recommended
for the Secretariat to make plans in providing sufficient time to Quality Improvement
Committee (QIC) and Regulatory Supervisory Authorities (RSA) to provide their
comments on the draft Stability Report in the future.

Agenda 2: IFSB Policy Transformation

i. Council’s Report to the General Assembly- Strategic Performance Report
2021

18. The SG presented the Strategic Performance Report 2021. The SG shared the overall
performance of the IFSB for year 2021 which has been presented at the 7th EC
meeting. In the said meeting, the EC has resolved IFSB performance for year 2021
as “Meet” instead of “Exceed”.

19. The SG also shared the overall SKRA 1 – 4 performances indicating the comparison
from year 2017 to 2021.

20. On Internal audit issues, the SG shared that the report has been circulated and
presented at the 7th EC meeting. The Secretariat has drafted the actions plans and
discussed it with the Internal Auditors. He added that the EC has guided the
Secretariat to ensure compliance with the action plans. He further added that an
update on the progress of Secretariat’s remedial actions to rectify the lapses identified
during the audit review, will be presented at the next EC meeting. The Secretariat has
also contacted the Internal Auditors to understand the new rating methodology and
to ensure that the IFSB will not be rated “below expectation” in the future.

21. On the financial performance, the SG informed that the IFSB recorded surplus for
year 2021 as the event expenses for the 15th IFSB Summit, 3rd Innovation Forum and
6th EC meeting were hosted and covered by SAMA. He also added that the budget
for 2021 consists of virtual activities in H1,2021 and physical activities in H2,2021.
However due to the pandemic uncertainties, most of the activities have been
conducted online which resulted to the increase in the surplus.

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22. On the financial performance, CBE requested for the Secretariat to amend the total
income, total membership income and total expenses for year 2021. The SG
responded that the figures excluded provision of bonus.

23. The IsDB sought explanation on the rating of “below expectation” by the Internal
Audit. The SG informed that the Secretariat is engaging with the Internal Auditor to
better understand the reasons for the rating downgrade despite the methodology
especially in the absence of significant issues such as fraud. He added that the
Secretariat was informed that the “below expectation” rating was due to new audit
findings as a result of the wider scope of the current audit exercise compared to
previous years.

24. On the rating of the performance of IFSB in 2021, the EC Chairman briefed the
Council on how the EC derived and recommended the rating of “Meet” instead of
“Exceed”. At the 7th EC meeting, the EC had discussed thoroughly whether to accord
IFSB with the rating of “Meet” or “Exceed”. The EC Chairman stated that although the
total overall performance recorded above 100%, 2 out of 4 SKRA were recorded
slightly below 100%, so the EC was of the view that the overall performance should
be “below expectation” for these SKRAs. Following an extensive deliberation, the EC
decided to assign an overall rating of “Meet” with a strong note for the Secretariat to
urgently improve its performance in the future particularly in the SKRAs where the
ratings were below 100%. Secondly on the Internal Audit rating, the EC Chairman
commented that the SG should not undermine or question the audit rating prepared
by the Internal Auditor. Importantly, the Secretariat needs to address the various
governance and operational lapses/weaknesses that were identified in the report. He
added that there was also discussion on actions to be taken by the Secretariat in
response to the audit issues. The EC Chairman reminded the SG to adhere to the
timeline provided by the audit team.
Resolution 7:
The Council resolved to approve the IFSB Strategic Performance Report 2021 to be
presented in the 20th General Assembly.

Agenda 2(ii) Memo on Impact and Consistency Assessment Program (ICAP)

25. The SG presented the Memo on Impact and Consistency Assessment Program
(ICAP) and sought approval from the Council on the ICAP Handbook and 5 ICAP
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Assessment templates.

26. BNM reminded that the value-proposition of ICAP relates to the impact assessment
on standards implemented as a complement to the RCAP and FSAP reviews.
However, the current Handbook does not include any methodology or guiding
principles on how impact will be assesed. As such, BNM felt that it is too early for the
Council to approve the Handbook. Secondly, on the governance regarding the
endorsement of ICAP, BNM shared that RCAP assessment reports are tabled to the
Basel Committee for endorsement, not by the equivalent EC or TC levels. BNM
suggested that consistent with the Council’s authority in approving standards and
methodology for publication to external parties, ICAP assessment reports should
observe a similar governance i.e. need to be tabled to the Council for endorsement
upon recommendation by the TC and ICAP Team Leader.

27. On the target jurisdictions, a member of the Council mentioned that it is also important
for sectors with lower than 15% market share to be able to participate in the
assessment considering the need for the sector to grow.

28. The SG responded that the ICAP Taskforce has been tasked to develop the
consistency assessment templates first and the impact index will be developed
subsequently. He informed that the Secretariat is working with BCBS to develop the
impact index assessment. He added that these tools are intended to be used only to
support the members. The impact assessment is also part of the work plan for the
project which will be developed after the initial ICAP pilot. The SG also took note of
BNM’s guidance in relation to the governance process of the assessment report which
should be tabled to Council for approval. The SG also took note of the comment to
allow sectors with less than 15% market share to participate in the assessment.

29. CBE informed that they do not implement any standards yet as that are especially
tailored for the Islamic banks.

30. The Chairman thanked all the Council members for their input and reminded the SG
Resolution 8:
The Council requested the Secretariat to include the Impact Assessment
methodology and guiding principles on how the impact can be measured and
resolved for the Secretariat to present the revised ICAP tool in the Council after
further deliberation by the Technical Committee.
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to take note of all the comments.

Agenda 3: IFSB Financial Sustainability and Human Capital Transformation

i. Memo on Proposal on Bonus Payout

31. The SG presented the memo on proposal on 2021 bonus payout. The SG informed
that the EC recommended a 2.5 months’ bonus pool for the Secretariat staff and the
individual bonus distribution should be in accordance with the approved distribution
criteria based on individual staff performance.
Resolution 9:
The Council resolved to approve 2.5 months bonus pool for the Secretariat based
on the IFSB 2021 performance as recommended by the Executive Committee.

Agenda 3(ii) Memo on Annual Salary Increment

32. The SG presented the memo on annual salary increment. The SG informed that the
EC recommended a total increment of 5.4% salary increment, consisting of 2.40%
Structural increment and 3.00% Merit increment. This applies to the Secretariat staff
and is to be paid effective from 1st January 2022 based on their individual
performance.

33. Bangladesh Bank (BB) enquired on the higher structural increment component, from
1.5% in 2020 to 2.4% in 2021 how it was set. BB mentioned that it has provided his
recommendations on the salary increment to the Secretariat in which BB proposed
2.0% Structural increment and 3.00% Merit increment. The SG responded that the
recommendation was made by the EC and further comments can be discussed in
today’s meeting. He also clarified that the 2.40% Structural increment was derived
from the projected inflation rate in Malaysia. The Secretariat also shared that the
indexes and agenda item had previously been discussed and deliberated in the EC
meeting. BB thanked the SG for the clarifications and requested the Secretariat to
share the procedures on how the decision was made.
Resolution 10:
The Council resolved to approve annual salary increment of 5.4% salary increment
for the Secretariat, consisting of 2.4% Structural increment and 3% Merit increment
to be paid effective 1st January 2022 based on their individual performance.

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Agenda 3(iii) Audited Financial Statements 2021 and Allocation of Surplus

34. The Chairman invited Mr. Mazmi Mohammad, Partner from Deloitte to present the
Audited Financial Statements 2021 and Allocation of Surplus.

35. Deloitte updated the Council on the four key areas covered during the course of the
audit and their related findings. On Sukuk investment, it was informed that the
calculated profits, based on effective profit rate were computed slightly inaccurate
during the year. These findings have been discussed with the Secretariat and the
necessary adjustments have been made. On the review of recoverability of
membership fees, Deloitte concurred on the practice of the Secretariat’s recognition
of membership fees income and impairment loss policy on membership fees. On
assessment of adequacy of payables and provision and short-term deposit, Deloitte
confirmed that there are no significant matters to be reported.

36. Deloitte also presented a summary of adjustments that included a late adjustment
posted by the Secretariat related to bonus provision upon clearance and resolution of
the EC.

37. Deloitte also informed the Council that it received full cooperation from the Secretariat
during the course of the audit, and that they remained independent throughout the
financial audit exercise in accordance with the relevant code of ethics for
Accountants.

38. Central Bank of Nigeria (CBN) thanked Deloitte for a comprehensive report. CBN
commended the Secretariat on the performance and improved surplus despite the
pandemic.
Resolution 11:
The Council resolved to approve the Audited Financial Statements 2021 to be
presented to the General Assembly.

Agenda 3(iv) Memo on Appointment of External Auditor 2022

39. The SG presented the memo on appointment of external auditor for the financial year
2022. He informed that the Secretariat has tabled the matter at 7th EC meeting for
decision and recommendation to the Council. Upon deliberation, the EC resolved to
recommend the appointment of Messrs. Deloitte Malaysia as the external auditor for
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financial year 2022 with an annual fee of USD7,500.

40. CBE supported the appointment of Deloitte as the external auditor for financial year
2022 with the same audit fee.

41. BB commented that this will be the 6th year Deloitte been appointed as the external
auditor, should the Council approve. He stated that this contradicts with the decision
made in the 5th Council meeting held on 22 December 2004 in Jeddah, Kingdom of
Saudi Arabia, where the Council resolved that the following two alternatives are to be
taken into consideration when appointing the external auditor: (i) the external auditor
of the IFSB should be appointed for 3 to 5 years; and (ii) the audit partner shall be re-
appointed on an annual basis.

42. The SG responded that Deloitte has been appointed to audit the financial statement
for 2018. He added that this year will be Deloitte’s 5th and final year as the external
auditor. The SG also mentioned that the Secretariat proposed two options in the
memo either to appoint Deloitte as the external auditor for the financial year 2022 or
to replace Deloitte with a new audit firm, for Council’s further guidance decision.

43. Based on the recent interaction and feedback from the IFSB Management with
respect to BNM Internal Auditors, BNM stressed on the expectation for the internal
auditors to be treated with utmost professionalism. BNM mentioned that based on the
unsatisfactory feedback on the internal audit methodology and findings received from
the SG especially, the Council should be outsourcing the internal audit to external
professional audit firms moving forward. BNM added that the outsourcing might
involve certain budget and need to be further deliberated at the EC meeting.

44. The EC Chairman supported BNM’s proposal to consider appointing a professional

external audit firm to conduct the audits in the future. Nevertheless, the EC Chairman
suggested for BNM’s Internal Audit to carry out its follow-ups audit on IFSB in 2023
to assess the effectiveness of corrective actions taken by the Secretariat in
strengthening its overall governance and controls. The status of the remedial
measures undertaken by the Secretariat needs to be properly updated to the EC by
end of the year for effective resolution.

45. Qatar Central Bank (QCB) informed the Council that within paragraph 22 on page 24

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of the Annual Financial Statement requires correction where it should be approved at

the 20th General Assembly instead of at the 19th General Assembly. The SG took note
of this.

46. The IsDB noted that governance issues are of concern to the auditors, BNM and other
stakeholders. He suggested for these issues to be carefully addressed and
recommended for the Secretariat to share the progress report to the Council members
within 2-3 months. He added that the Council should not tolerate and compromise on
issues related to governance as it is the cornerstone of any organization.

47. The Chairman thanked the Council members for their feedback. He also supported
the idea of the IsDB and the EC Chairman, where there should be a progress report
on the governance issues shared with the Council within 2-3 months and for the
procurement of the professional audit firm to be done for them to commence audit
after this year, since the Secretariat already has an action plan to be followed.
Resolution 12:
The Council resolved to recommend the appointment of Deloitte as the External
Auditor for 2022 with an annual fee of USD 7,500. Further, the Council
recommended for the Secretariat to explore procurement of a different auditor for
the year 2023.

Resolution 13:
The Council resolved for the Secretariat to outsource internal auditor’s function to
professional audit firm and for the BNM internal auditors to see through the 2021
Internal Audit Report recommendations and Secretariat’s Action Plans till end of
2022.

Agenda 3(v) Memo on IFSB Manpower requirements and New Organizational

Structure

48. The SG presented the memo on IFSB Manpower Requirements and New
Organizational Structure including the financial impact for hiring the additional
manpower.

49. The EC Chairman supported the proposal for additional Assistant Secretary-General
(ASG) to lead the Implementation Department. The ASG will be entrusted with the
responsibility of focusing on strategic initiatives and increasing IFSB visibility in
member countries including the ICAP. Currently, the ASG for Implementation &
Resources is tasked to look into governance, transformation and implementation.

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50. SAMA commended the EC and Secretariat on the transformation agenda. SAMA
suggested for the details such as the number of manpower required and preferred
scenario to be delegated to the EC for further discussion.

51. BNM supported the additional manpower required for the Implementation
Department. BNM sought further clarification whether the additional 4 manpower
(from 41 to 45 headcount) included in the Strategic Performance Plan 2022-2024
(SPP 2022-2024), has been deliberated by EC. BNM mentioned that it is improper to
assume that all contents are taken as read and is approved. BNM commented that
the SPP is a document that includes general strategies and outcomes to be achieved,
but the details would still need to be deliberated. The SG clarified that the additional
4 manpower were discussed at the 6th EC meeting, as part of the SPP, prior to
presenting it in the 39th Council meeting. The SG added it was not fully deliberated in
the Council since it was approved based on the EC recommendation.

52. BNM suggested for the Secretariat to prepare a proper analysis on the additional 4
manpower including financial impact, similar to the current proposal for additional 7
manpower. BNM also suggested for this matter to be deliberated by the EC including
the total financial impact involving a total additional 11 manpower and whether the 4
proposed positions are warranted. BNM commented that the IFSB should leverage
on digitalization instead of increasing the manpower without proper value proposition.

53. The EC Chairman suggested for the Council to consider approving the recruitment of
additional ASG and staff under new Implementation Department. However, on the
additional manpower requirement, the EC Chairman commented that the positions
need to be assessed taking into account IFSB overall planning and expansion of
activities i.e: number of ICAP, activities of the new implementation department. The
staff under the new Implementation Department can be recruited in stages based on
the yearly target. This will help the Secretariat to determine and meet the required
number of manpower in stages.

54. CBE supported scenario 2 that is; secondment hire or scenario 3 that is; combination
of direct hire and secondment.

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55. QCB commented the expansion should be targeted and gradual, and must be tied to
the IFSB annual work plan and SPP 2022-2024 deliverables.

56. Brunei Darussalam Central Bank (BDCB) supported the proposal on the additional 7
manpower and noted that it is based on the Secretariat’s thorough assessment on
the organisational design outcomes which tables the potential gaps in organizational
efficiency that can be addressed with the new restructuring proposal. BDCB
commented that this will greatly enhance the IFSB’s productivity and efficiency in
achieving its performance targets. BDCB also supported scenario 3 where it can help
the IFSB to alleviate the financial impact on recruitment cost.

57. The Chairman took note of all the feedback by the Council members and agreed for
the additional 4 manpower to be deliberated at the next EC, along with the new
organisational structure.
Resolution 14:
The Council resolved to approve the new IFSB organizational structure and the
seven (7) additional manpower related to new Implementation Department effective
Q1 2023.

Resolution 15:
The Council resolved for the four (4) additional manpower included in the Strategic
Performance Plan 2022-2024, to be further deliberated in the next Executive
Committee meeting together with the new organisational structure.

Agenda 3(vi) - Update on SG’s 360 Degree Assessment, Performance Bonus 2021
and Salary Increment - (In-camera session)

Resolution 16:
The Council acknowledges of the 360-degree assessment result of the Secretary-
General that shows a decline from the previous year. Furthermore, Council takes
notes on all concerns raised by the EC Chairman and other Council members
specifically on area that still need to be improved (Team Leadership and Managing
Change and Diversity). Council resolved for the EC Chairman to continue with the
one-on-one coaching program for the Secretary-General. EC Chairman may also
give a time limit (this year) by which the Secretary-General would be expected to
improve his performance ratings up to the satisfaction of the EC and Council. Further,
the Council resolved to approve the EC recommendation of “Meet” rating for SG’s
2021 performance and Salary Increment of up to 5.4% (including 2.4% structural
increment and 3.0% maximum merit increment) for the Secretary-General.
Accordingly, he will be entitled for 2.5 times Bonus of his Salary.

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Agenda 4: IFSB Membership

i. Update on membership status, applications for admission/ withdrawals

58. The SG informed that the memo was to update the Council members on
i) membership status, ii) member admission and iii) a waiver request by Bursa
Malaysia Berhad (BMB). The SG added that the memo has been presented to the
EC who then recommended the admission of Algbra Group Limited, United Kingdom
as Observer Member. The EC also recommended for BMB to pay its membership fee
as an observer for year 2020. This took into account BMB’s recent decision to remain
as an Observer Member instead of withdrawing from being a member (as per its
request in mid of 2020) following BNM’s engagement with BMB.

59. The SG informed the Council that based on the IFSB Articles of Agreement (AoA)
and Bylaws, this agenda should be presented to the GA. However, this agenda needs
to be discussed in the Council meeting prior presenting it to the GA. The SG added
that if the Council approve the waiver request by BMB, the Secretariat will explore
one of the three options; i) approval by GA via circular resolution, ii) the agenda to be
tabled at the immediate GA under Agenda 7: Any other business, or iii) at the next
GA in 2023.

60. On the application by Algbra Group Limited, United Kingdom, the SG informed that
the Secretariat has performed its due diligence as directed by the EC.

61. CBE recommended for BMB to pay its membership fee as an Associate member for
year 2020, as the withdrawal application and the request to downgrade from
Associate to Observer Member were submitted in June 2020 and December 2020
respectively. He also made reference to the Articles 1.13 of the By-Laws that stated
“Membership fees shall be due and payable on 1 January each year.” He also
recommended for the Secretariat to update the By-Laws for such cases.
Resolution 17:
The Council resolved to approve the admission of Algbra Group Limited as an
Observer Member.

Resolution 18:
The Council resolved to recommend the membership fee waiver request by Bursa
Malaysia to pay its membership fee as an IFSB Observer Member for year 2020 and
agreed for this matter to be presented to the General Assembly via circular resolution
or to be tabled in the next General Assembly.

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Agenda 5: IFSB Standards for Adoption

i. Memo on Standards for Adoption
ii. Memo on Appointment of New TC Members

62. The SG presented the memo on TN-4: Technical Note on Recovery & Resolution
(TNRR) for Institutions offering Islamic financial services (IIFS). He informed that the
issues pertaining to the TNRR had been fully deliberated at the previous TC Meeting.
The TC recommended for the TNRR to be adopted as a standard with the
incorporation of certain footnote.

63. SAMA enquired whether there are major outstanding issues on TNRR from the TC
that have not been resolved. He also made reference to the footnote related to the
OIC Fiqh Academy and AAOIFI ruling, and enquired whether the Council considered
this as an endorsement of these rulings by the IFSB. The SG responded that the
outstanding issue from the TC was on this footnote regarding the sale of debt at a
discounted price particularly on Murabahah transactions. He added that the TC has
given conditional approval provided that the footnote is fully deliberated by the
Shari’ah Board and included in the standard. After it was deliberated by the Shari’ah
Board, the TC was updated on the matter prior to this meeting. The SG also informed
that in the past the Council has approved 5 standards that made reference to the OIC
Fiqh academy and AAOIFI ruling.
Resolution 19:
The Council resolved to approve the adoption of Technical Note on Recovery and
Resolution for Institutions Offering Islamic Financial Services (IIFS).

64. Subsequently, the SG presented the memo on the nominations of the new TC
members, for the Council’s consideration and approval.
Resolution 20:
The Council resolved to approve the appointment of new TC members as follow:
i) Mr. Mehmet Zahid Samancıoğlu, Executive Director, Banking and Financial
Institutions Department, Central Bank of the Republic of Turkey
ii) Mr. Nik Faris Nik Sallahuddin, Deputy Director, Prudential Financial Policy
Department, Bank Negara Malaysia
iii) Dr. Mohammad Bader Alkhamis, Manager, Off-site Supervision Department,
Central Bank of Kuwait

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Agenda 6: Any Other Matters

65. The SG confirmed that there are no other matters and thanked the honourable
Chairmann and Council members for their guidance.

Agenda for Updates Only

Resolution 21:
The Council resolved for comments on these agenda items to be submitted in writing
as proposed by the Secretariat.

Closing Remarks

66. The Chairman thanked the Council members for their support and the Secretariat for
preparation of the Council meeting.

67. The Council Meeting ended at 5:00pm (Pakistan time) on 9 June 2022.

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