Minutes of The 40th Council Meeting (Track Change)

40th Meeting of the Council DRAFT MINUTES
Minutes of the 40th Meeting of the Council of

Islamic Financial Services Board (IFSB)
9 June 2022 | 2:00 – 5:00pm (Pakistan time)
Formatted: Normal, Right: 0.65 cm, Space Before: 4.6
pt
Present
Formatted: Indent: Left: 0 cm
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 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
H.E Basel Al HarounDr. Mohammad Al Khamis

11.
Manager of the Off-Site Supervision DepartmentGovernor, Central Bank of Kuwait
12. Dr. Ali Abusalah Elmabrok Amreeghah
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Head of International Economics Division, Research and Statistics Department

Central Bank of Libya
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
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27. Mr. Bello Hassan

Managing Director/CEO, Nigeria Deposit Insurance Corporation
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
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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 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
Resolution 1:
The Council approved the Agenda of the 40th Meeting of the Council.
agenda.
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’
Resolution 3:
The Council took note of the Status Report on Resolutions Adopted at the 39th
Meeting of the Council.
admission.
EC Chairman Report: Progress on Key IFSB Transformation on Policy,
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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 Formatted: Font: 12 pt
Committee (EC), to present the progress of the transformation agenda and status
report on the resolutions adopted at the 7th EC meeting.
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 7th 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.
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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
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.
industry 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.
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
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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 Formatted: Superscript
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.
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 Formatted: Font: 12 pt
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
Resolution 78:
The Council resolved to approve the IFSB Strategic Performance Report 2021 to be
presented in the 20th General Assembly.
Formatted: Indent: Left: 0 cm
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Resolution 9: 1718
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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
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 Formatted: Font: 12 pt
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.
Agenda 2(ii) Memo on Impact and Consistency Assessment Program (ICAP)
24.25. 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
Assessment templates.
25.26. 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 Formatted: Font: Not Bold
governance i.e. need to be tabled to the Council for endorsement upon

recommendation by the TC and ICAP Team Leader Formatted: Font: Not Bold
26.27. 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
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the assessment considering the need for the sector to grow.
27.28. 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 Formatted: Font: Not Bold
. 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.
28.29. CBE informed that they do not implement any standards yet as that are especially
tailored for the Islamic banks.
29.30. The Chairman thanked all the Council members for their input and reminded the SG
to take note of all the comments.
Resolution 8:
The Council resolved to approve the IFSB Strategic Performance Report 2021 to be Formatted: Indent: Left: 0 cm, First line: 0 cm
presented in the 20th General Assembly.
Resolution 9: Formatted: Body Text

The Council resolved for the Secretariat to outsource internal auditor’s function to Formatted: Body Text, Indent: Left: 0 cm
Internal Audit Report recommendations and Secretariat’s Action Plans till end of 2022.
Formatted: Body Text
Resolution
Agenda 3: IFSB810:
Financial Sustainability and Human Capital Transformation Formatted: Indent: Left: 0 cm
The Council requested the Secretariat to include the Impact Assessment
i. Memo on Proposal on Bonus Payout
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.
30.31. 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
Resolution 912:
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. Formatted: Body Text, Justified, Indent: First line: 0 cm,
Right: 0.22 cm
Resolution 13: Page 10 of
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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.
criteria based on individual staff performance.
Agenda 3(ii) Memo on Annual Salary Increment
31.32. 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.
32.33. 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
Resolution 12:
The Council resolved to approve 2.5 months bonus pool for the Secretariat based Formatted: Indent: Left: 0 cm
on the IFSB 2021 performance as recommended by the Executive Committee.
Resolution 130: Formatted: Indent: First line: 0 cm

toThe
share the procedures
Council resolved toon how the
approve decision
annual was
salary made. of 5.4% salary increment
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.
Resolution 14:
The Council resolved to approve the Audited Financial Statements 2021 to be
Agenda 3(iii) Audited
presented to the Financial Statements 2021 and Allocation of Surplus
General Assembly.
33.34. The Chairman invited Mr. Mazmi Mohammad, Partner from Deloitte to present
Resolution 15:
the
TheAudited
CouncilFinancial
resolvedStatements 2021the
to recommend and Allocation of
appointment ofSurplus.
Deloitte as the External
Auditor for 2022 with an annual fee of USD 7,500. Further, the Council
34.35. recommended
Deloitte updatedforthe
theCouncil
Secretariat to four
on the explore
key procurement
areas coveredofduring
a different auditorofforthe
the course
the year 2023.
audit and their related findings. On Sukuk investment, it was informed that the
Resolution 16:
calculated profits, based on effective profit rate were computed
The Council resolved to approve the new IFSB organizational structure and the
Formatted: Normal, Left, Indent: Left: 0.25 cm, Right: 0
slightly
seven inaccurate during
(7) additional the year. related
manpower These findings
to new have been discussed
Implementation with the
Department
cm
effective Q1 2023. Page 11 of
Resolution 17:
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
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.
35.36. 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.
36.37. 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.
37.38. 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 12:
The Council resolved to approve 2.5 months bonus pool for the Secretariat based on Formatted: Indent: Left: 0 cm
the IFSB 2021 performance as recommended by the Executive Committee.

Agenda
The3(iv) Memo
Council on Appointment
resolved of External
to approve annual Auditor 2022
salary increment of 5.4% salary increment for Formatted: Indent: Left: 0 cm
the Secretariat, consisting of 2.4% Structural increment and 3% Merit increment to be
38.39.paid
Theeffective
SG presented the memo
1st January on appointment
2022 based of external
on their individual auditor for the financial
performance.
year 2022. He informed that the Secretariat has tabled the matter at 7th EC meeting
for
Thedecision
Counciland recommendation
resolved to approve to
thethe Council.
Audited Upon deliberation,
Financial the EC
Statements 2021 to resolved
be
presented to the General Assembly.
to recommend the appointment of Messrs. Deloitte Malaysia as the external auditor
for financial year
Resolution 15: 2022 with an annual fee of USD7,500.
The Council resolved to recommend the appointment of Deloitte as the External
39.40. Auditor for 2022 withthe
CBE supported an annual fee of USD
appointment of 7,500. Further,
Deloitte as the
theCouncil
external auditor
recommended for the Secretariat to explore procurement of a different auditor for
for
thefinancial year 2022 with the same audit fee.
year 2023.
40.41. Resolution
BB commented16: that this will be the 6th year Deloitte been appointed as the external
auditor, should
seven (7) the Council
additional approve.
manpower He to
related stated
new that this contradicts
Implementation with the decision
Department effective
Q1 2023. th
made in the 5 Council meeting held on 22 December 2004 in Jeddah, Kingdom of
Resolution 17: Page 12 of
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2022Council 1718
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.
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 since 2017 but been tasked 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 Formatted: Font: 12 pt
that based on the unsatisfactory feedback on the internal audit methodology and Formatted: Font: 12 pt
findings received from the SG especially, the Council should outsourcing Formatted: Font: 12 pt
the internal audit to external professional audit firms moving forward. BNM added that Formatted: Font: 12 pt
the outsourcing might involve certain budget and need to be further deliberated at Formatted: Font: 12 pt
Formatted: Font: 12 pt
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 Formatted: Font: 12 pt
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 Formatted: Font: 12 pt
strengthening its overall governance and controls. The status of the remedial Formatted: Font: 12 pt
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 of the Annual Financial Statement requires correction where it should be
approved at the 20th General Assembly instead of at the 19th General
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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 approve 2.5 months bonus pool for the Secretariat based Formatted: Indent: Left: 0 cm
on the IFSB 2021 performance as recommended by the Executive Committee.

The Council resolved to approve annual salary increment of 5.4% salary increment Formatted: Indent: Left: 0 cm
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.
Formatted: Indent: First line: 0 cm
Resolution 14:
The Council resolved to approve the Audited Financial Statements 2021 to be Formatted: Justified, Indent: Left: 0 cm
Resolution 125: Formatted: Indent: Left: 0 cm

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
Internal Audit Report recommendations and Secretariat’s Action Plans till end of
Agenda 2022.
3(v) Memo on IFSB Manpower requirements and New Organizational
Resolution 16:
Structure Formatted: Font: 12 pt, Bold
seven (7) additional manpower related to new Implementation Department
41.48. The SG Q1
effective presented
2023. the memo on IFSB Manpower Requirements and New
Organizational Structure including the financial impact for hiring the additional
Resolution 17:
manpower.
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.
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42.49. 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.
43.50. 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.
44.51. 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.
45.52. 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.
46.53. 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
Page 15 of
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 Formatted: Font: 12 pt
the yearly target. This will help the Secretariat to

determine and meet the required number of manpower in stages.
47.54. CBE supported scenario 2 i.e: secondment hire or scenario 3 i.e:

combination of direct hire and secondment.
48.55. QCB commented the expansion should be targeted and gradual, and must be tied Formatted: Font: 12 pt
to the IFSB annual work plan and SPP 2022-2024 deliverables

.
49.56. 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 Formatted: Font: 12 pt
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.
49. 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 12:
The Council resolved to approve 2.5 months bonus pool for the Secretariat based on Formatted: Indent: Left: 0 cm
the IFSB 2021 performance as recommended by the Executive Committee.

The Council resolved to approve annual salary increment of 5.4% salary increment for Formatted: Indent: Left: 0 cm
the Secretariat, consisting of 2.4% Structural increment and 3% Merit increment to be
paid effective 1st January 2022 based on their individual performance.
Formatted: Indent: First line: 0 cm
Resolution 14:
The Council resolved to approve the Audited Financial Statements 2021 to be Formatted: Justified, Indent: Left: 0 cm
Resolution 15: Formatted: Indent: Left: 0 cm

The Council resolved to recommend the appointment of Deloitte as the External Formatted: Justified, Indent: Left: 0 cm
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. Formatted: Indent: Left: 0 cm
Page 16 of
Resolution 146:
seven (7) additional manpower related to new Implementation Department effective
Agenda 3(vi) - Update on SG’s 360 Degree Assessment, Performance Bonus 2021
and Salary Increment - (In-camera session)
Resolution 168:
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.
Agenda 4: IFSB Membership

i. Update on membership status, applications for admission/ withdrawals
50.58. 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 Formatted: Font: Not Bold
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 Formatted: Font: Not Bold
BNM’s engagement with BMB

.
.
.
.
51.59. 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
Page 17 of
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.
52.60. 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.
53.61. 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
Resolution 179:
The Council resolved to approve the admission of Algbra Group Limited as an
Oobserver
Mmember.
Resolution 1820:
The Council resolved to recommend the membership fee waiver request by Bursa
Malaysia to pay its membership fee as an IFSB observer memberObserver 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.
cases.
Agenda 5: IFSB Standards for Adoption

i. Memo on Standards for Adoption
ii. Memo on Appointment of New TC Members
54.62. 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
Resolution 1921:
The Council resolved to approve the adoption of Technical Note on Recovery and
Resolution for Institutions Offering Islamic Financial Services (IIFS). Page 18 of
Resolution 22:
The Council resolved to approve the appointment of new TC members as follow:
i) Mr. Mehmet Zahid Samancıoğlu, Executive Director, Banking and Financial
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. Formatted: Font: 8 pt
56.64. Subsequently, the SG presented the memo on the nominations of the new TC
members, for the Council’s consideration and approval.
Resolution 21: Formatted: Indent: Left: -0.75 cm

The Council resolved to approve the adoption of Technical Note on Recovery and
Resolution for Institutions Offering Islamic Financial Services (IIFS).
Resolution 202: Formatted: Indent: Left: 0.25 cm, Hanging: 0.75 cm

The Council resolved to approve the appointment of new TC members as follow:
i) Mr. Mehmet Zahid Samancıoğlu, Executive Director, Banking and Financial Formatted: Indent: Left: 0.25 cm, Hanging: 0.5 cm
Institutions Department, Central Bank of the Republic of Turkey
ii) Mr. Nik Faris Nik Sallahuddin, Deputy Director, Prudential Financial Policy
Agenda 6: Any Other Matters
Department, Bank Negara Malaysia
iii) Dr.
65. The SGMohammad Bader
confirmed that Alkhamis,
there are no Manager, Off-site
other matters andSupervision
thanked theDepartment,
honourable
Central Bank of Kuwait
Chairmann and Council members for their guidance.
Agenda for Updates Only
Resolution 231:
The Council resolved for comments on these agenda items to be submitted in writing
as
proposed by the Secretariat.
Closing Remarks
49.66. The Chairman thanked the Council members for their support and the Secretariat for
preparation of the Council meeting.
50.67. The Council Meeting ended at 5:00pm (Pakistan time) on 9 June 2022.
Page 19 of

Minutes of The 40th Council Meeting (Track Change)

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Minutes of The 40th Council Meeting (Track Change)

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40th Meeting of the Council DRAFT MINUTES

Minutes of the 40th Meeting of the Council of

2. H.E. Dr. Perry Warjiyo

3. Dr. Sami Al-Suwailem

4. Mr. Khalid Hamad

5. H.E. Abu Farah Md. Nasser

6. H.E. Rokiah Badar

7. Ms. Hanadi Khaled Ahmed (virtual)

8. Mr. Mohamed Aboumoussa

9. Mrs. Qismah Salih Ali

10. Mr. Adnan Y. Naji

H.E Basel Al HarounDr. Mohammad Al Khamis

12. Dr. Ali Abusalah Elmabrok Amreeghah

Head of International Economics Division, Research and Statistics Department

13. H.E. Nor Shamsiah Mohd Yunus

14. Mr. Ramsamy Chinniah

15. Mr. Badr Nabil

16. H.E. Aishah Ndanusa Ahmad

17. H.E. Tahir Salim Abdullah Al Amri

18. Mr. Hisham Al-Mannai

19. H.E Dr. Fahad Abdallah Almubarak

20. H.E. Hussein Yahya Jangoul

21. H.E. Khaled Mohamed Balama

22. Mr. Riswinandi

23. Dr. Majid Eshghi

24. Mr. Almas Zholamanov

25. Mrs. Sharifatul Hanizah Said Ali

26. Mr. Sabiu Bello Abubakar

27. Mr. Bello Hassan

28. Mr. Ahmad Alenizi

29. Mr. Mehmet Zahid Samancıoğlu

30. Mr. Hüseyin Ünal

Absent with Apologies

32. H.E. Dr. Abdolnaser Hemmati

33. H.E. Madina Abylkassymova

34. H.E. Cheikh El Kebir Moulay Taher

35. H.E. Mehmet Ali Akben

1. Dr. Bello Lawal Danbatta, Secretary-General

Recitation from the Holy Qur’an

Welcoming Remarks from the Chairperson

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

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

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

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

11. The Chairman invited the H.E. Dr. Perry

Agenda 1: Economic and Financial Stability Issues

Agenda 2: IFSB Policy Transformation

compared to previous years.

prepared by the Internal Auditor. Importantly, the Secretariat needs to

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

25.26. BNM reminded that the value-proposition of ICAP

governance i.e. need to be tabled to the Council for endorsement upon

the assessment considering the need for the sector to grow.

. The SG also took note of BNM’s guidance in relation

Resolution 9: Formatted: Body Text

criteria based on individual staff performance.

Agenda 3(ii) Memo on Annual Salary Increment

32.33. Bangladesh Bank (BB) enquired on the higher structural increment

Resolution 130: Formatted: Indent: First line: 0 cm

Resolution 13: Formatted: Indent: First line: 0 cm

44. The EC Chairman supported BNM’s proposal

Assembly. The SG took note of this.

Resolution 13: Formatted: Indent: First line: 0 cm