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  • Unrestricted Investment Accounts: Quantitative Disclosure Requirements

    • PD-1.3.33

      The following quantitative disclosures should be made when the concerned Islamic bank has unrestricted investment accounts:

      (a) Amount of IAH funds;
      (b) The ratio of Profit Equalization Reserves (PER) to the total amount of PSIA by type of IAH;
      (c) The ratio of Investment Risk Reserves (IRR) to the total of PSIA by type of IAH;
      (d) ROAA and ROAE;
      (e) Ratio of profit distributed to PSIA by type of IAH. The bank must disclose the profit sharing formula used for the calculation and distribution of profits;
      (f) The management fee (Mudarib share) as a percentage of the total investment profit, and the extent to which it is subject to partial or total waiver in order to pay a competitive rate of return to IAH;
      (g) Ratio of financing to PSIA by type of IAH;
      (h) Percentage of financing for each type of Shari'a-compliant contract to total financing;
      (i) Percentage of financing for each category of counterparty to total financing — that is, Amount of Shari'a-compliant financing extended to a category of counterparties (outstanding) / Amount of total financing (outstanding) x 100;
      (j) The carrying amount of any assets that the bank has pledged as collateral and the terms and conditions relating to the pledge;
      (k) The amount of any guarantees or pledges given by the bank and the conditions attaching to those guarantees or pledges;
      (l) Share of profits earned by IAH, before transfers to or from reserves (amount and as a percentage of funds invested);
      (m) Share of profits paid out to IAH, after transfers to or from reserves (amount and as a percentage of funds invested);
      (n) Share of profits paid out to the bank as Mudarib;
      (o) Movement on PER and IRR during the year;
      (p) The utilization and computation of PER and/or IRR during the period;
      (q) Average declared rate of return or profit rate on PSIA by maturity (3-month, 6-month, 12-month, 36-month);
      (r) Types of assets in which the funds are invested and the actual allocation among various types of assets;
      (s) Changes in asset allocation in the last six months;
      (t) Off-balance sheet exposures arising from investment decisions, such as commitment and contingencies;
      (u) Limits imposed on the amount that can be invested in any one asset;
      (v) The treatment of assets financed by IAH in the calculation of RWA for capital adequacy purposes;
      (w) Profits earned and profits paid out over the past five years (amount and as a percentage of funds invested); and
      (x) Amount of total administrative expenses charged to unrestricted IAH.
      Amended April 2011
      Amended October 2010
      April 2008