BANKING AFFAIRS

Detailed explanation-1: -The Financial Services Act (FSA) and the Islamic Financial Services Act (IFSA) came into force on 30 June 2013, replacing the repealed Payment System Act 2003 (PSA).

Detailed explanation-2: -The main distinction between the FSA and the IFSA lies in the IFSA’s extensive requirements on Shariah governance and ensuring Shariah compliance.

Detailed explanation-3: -Its main objectives are to promote financial stability and compliance to Shariah and further strengthen the regulation of Islamic financial institutions. By this, the IFSA 2013 aims to strengthen consumer protection and further increase the confidence of the public in Takaful.

Detailed explanation-4: -IFSA 2013 repealed existing banking regulations on Islamic banking and finance and it also revised the accounting standards under which Islamic financial institutions prepare their accounts. Some of the main changes are as follows: Product Disclosure Sheet (PDS) Principal Guaranteed and Profit Smoothing Practices.