• The Deposit Protection Order 2010: for the protection of ordinary depositors who deposit money in banks, including Islamic banks, against default.
• The Autoriti Monetari Brunei Darussalam 2010: a central bank for Brunei with functions including the supervision and regulation of Islamic banks.
• The Accounting Standards Order 2010: to set and regulate accounting standards in Brunei. It is not yet known whether there is any need to cater for certain aspects of Islamic banking and finance under the standards.
The Deposit Protection Order 2010 came into effect on January 1, 2011.The Ministry of Finance said that the order is set to provide “for the introduction and administration of a deposit protection scheme, the establishment of the Brunei Darussalam Deposit Protection Corporation, its functions and for matters connected therewith”
Basically, to prevent financial risk and to enhance the confidence of the depositors, the government, under the Deposit Protection Order 2010, requires banks to set aside funds as reserves. The deposit protection scheme therefore protects depositors, whether individuals or businesses, against loss of their deposits in the unlikely event of a member institution failing to honour the transaction.
Bruneian Islamic finance industry leaps further with the launching of Musyarakah Corporate Financing by BIBD in 2009. In 2009, BIBD was also mandated lead arranger for the Islamic Development Bank’s USD 850m sukuk issuance as well as a joint lead manager for General Electric Capital Corp’s USD 500m sukuk issuance, which was awarded Best Sukuk Deal by Euromoney.
In 2010, the foundation for the establishment of a strong regulator for Bruneian Islamic finance industry was created. The Autoriti Monetari Brunei Darussalam Order 2010 was passed. The Order, amongst other things, provides for the establishment of Autoriti Monetari Brunei Darussalam (AMBD), its Board and matters connected to the objects, operation, administration, functions, powers and duties of AMBD that includes relations between AMBD and the Government; relations between AMBD and the banks and financial institutions; and consequential and related amendments to other written laws that govern the activities supervised by AMBD.
With a special secretariat for Islamic advisory services, along with a unit for banking and specialised market supervision and another for takaful, insurance and capital market supervision, all part of a wider directorate charged with monitoring and developing regulatory issues in Brunei’s financial sector, the AMBD is expected to maintain an attentive eye on the banking and insurance industry, both its Islamic and conventional segments. This unified monetary authority should be able to reduce redundancy and bureaucracy, while increasing efficiency through synergy.
Since the establishment of the Autoriti Monetari Brunei Darussalam (AMBD) in 2010, prudential standards have been issued by the body to ensure lasting stability in the financial market in Brunei. The result has been fruitful, as manifested in the promotion of new banking products and the development of enhanced technology, as well as a more steady financial environment.
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