This research issue is considered for the update of the 2008 SNA. The work is currently being carried out by the Joint Islamic Finance Task Team in the guidance note IF.1 Islamic Finance in the National Accounts and External Sector Statistics.

Islamic Banking does not operate in the same way as conventional banking as it follows the Shari’ah Islamic law, principles and rules. The Shari’ah Islamic law does not permit receipt and payment of "riba" (interest), "gharar" (excessive uncertainty), "maysir" (gambling), and short sales or financing activities that it considers harmful to society. Instead, the parties must share the risks and rewards of a business transaction and the transaction should have a real economic purpose without undue speculation, and not involve any exploitation of either party.

However, issues on the implementation of the 2008 SNA recommendations for Islamic Banking were raised during several meetings in the Arab Region organized by the Statistics Division of the United Nations Economic and Social Commission for Western Asia (ESCWA).

The Advisory Expert Group (AEG) on National Accounts also discussed an issues paper on the issue of Islamic Banking at its 10th meeting and agreed that further research on the statistical implications of Islamic Banking in the national accounts is required and that practical guidance on the treatment of Islamic Banking transactions needs to be developed. More information on the conclusions is available here.

The Statistics Division of ESCWA and the United Nations Statistics Division subsequently established a Task Force on Islamic Banking under the auspices of the Intersecretariat Working Group on National Accounts (ISWGNA) to further research on the statistical implications of Islamic Banking in the national accounts and develop practical guidance on the treatment of Islamic Banking transactions.

An initial review of the work of the Task Force revealed that the work and resultant recommendations of the Task Force would be broader than just the statistical treatment of Islamic banking as it would also assess other aspects such as the sectorization of Islamic financial corporations, classification of Islamic financial instruments, and calculation and recording of various types of Islamic financial services and related transactions. Thus, the scope of the work of the Task Force was expanded to focus on the statistical treatment of Islamic finance in the national accounts and the Task Force was renamed the Task Force on Islamic Finance.

The Task Force organized a workshop in Beirut, Lebanon, from 24-26 October 2017 to discuss existing recommendations and guidance on how to account for Islamic finance in the national accounts and the issues arising from these recommendations. The workshop reached a number of conclusions and recommendations and raised several issues. These were discussed in an issues paper at the 11th meeting of the AEG. The AEG supported the recommendations to form two working groups to streamline the work streams to (i) to address the issues related to the use of income statements and balance sheets, sectorization, classification and the recording of Islamic finance transactions; and (ii) coordinate the work of regional and international organizations on the collection of data on Islamic finance. The AEG also requested the Task Force to provide an update on the progress of the work of the two working groups at a future meeting of the AEG. More information on the conclusions is available here.

The two working groups have since been formed. WebEx meetings were organized in April 2018 to decide on the work programmes and timeline of activities of the two working groups.

More information on the activities of the Task Force and other relevant materials is available below:

Terms of Reference for the Task Force on Islamic Banking

Terms of Reference for the Working Groups on Islamic Finance

Members of the ISWGNA Task Force on Islamic Finance

Members of the Working Groups on Islamic Finance

Workshop on Islamic Finance in the National Accounts (24-26 October 2017, Beirut, Lebanon)

Task Force WebEx Meeting (8 June 2017)

Issues paper from the 11th meeting of the AEG

Conclusions from the 11th meeting of the AEG

Issues paper from the 10th meeting of the AEG

Conclusions from the 10th meeting of the AEG

AAOIFI Financial Accounting Standard 27 (FAS 27) “Investment Accounts” and PSIFIs

Compilation Guide on Prudential and Structural Islamic Financial Indicators: Supplement

Islamic Finance in Policy and Surveillance

Monetary and Financial Statistics Manual and Compilation Guide: Annex 4.3 - Islamic Financial Institutions and Instruments

Reporting practices of Islamic financial institutions in the BIS locational banking statistics

Revised Compilation Guide on Prudential and Structural Islamic Financial Indicators

SNA Treatment of Islamic Windows of Conventional Banks

Some Notes on Islamic Finance in the National Accounts

Perspectives on Islamic Finance in the National Accounts