Overview of BDIF

Islamic finance development

Guided by Wawasan Brunei 2035, Islamic finance is a cornerstone of Brunei Darussalam’s financial services sector, underpinned by a strong Islamic philosophy and the nation’s aspiration to become an international Islamic financial hub.

Brunei Darussalam is advancing Islamic finance as a key pillar of its financial services sector, reflecting its commitment to building a dynamic, sustainable, and diversified economy. Brunei Darussalam Central Bank (BDCB) aims to develop a resilient Islamic finance ecosystem that fosters innovation, upholds financial stability, and promotes sustainable long-term growth.

Omar Ali Saifuddien Mosque Bandar Seri Begawan Brunei Darussalam 2

Since the establishment of the first Islamic financial institution in 1991, Brunei Darussalam’s Islamic financial ecosystem has grown significantly over the past 20 years. It now encompasses Islamic banks, takaful operators, Islamic investment dealers, sukuk, and other ancillary services, with Islamic financial assets now accounting for more than 50% of the total market share. Efforts to further deepen the Islamic financial market are outlined in the Brunei Darussalam Financial Sector Blueprint.

The Brunei Darussalam Islamic Finance (BDIF) initiative aims to showcase the Sultanate’s Islamic financial ecosystem, offering a gateway to comprehensive information on regulations, market players, products, and available education and training for professional development.

Islamic Pattern

BDIF logo breakdown

BDIF Logo
BDIF Brunei Icon
Brunei in focus

The word “Brunei” anchors the logo in national identity and signifies its leadership in Islamic finance.

Brunei Jawi Icon
Heritage in script

The Jawi rendering of “Brunei” reflects deep-rooted Islamic traditions and cultural pride.

BDIF IF Icon
Symbol of purpose

The “IF” acronym highlights Islamic Finance and Brunei’s strategic role on the global stage.

Regulatory landscape for islamic finance

Brunei Darussalam operates a dual financial system, comprising both conventional and Islamic finance. In ensuring Syariah compliance in the Islamic finance industry, Brunei Darussalam practices a two-tier Syariah governance framework.  

At the national level, the Syariah Financial Supervisory Board was established pursuant to the Syariah Financial Supervisory Board Order, 2006 (“SFSB Order”). The Board is responsible for ascertaining the laws of Islam (Hukum Syara’) for the purposes of Islamic banking, takaful, Islamic financial business, Islamic development financial business, and any other business which is based on Syariah principles and carried out, supervised or regulated by the Central Bank. 

Whereas, at the industry level, existing legislations require Islamic financial institutions (IFI) to establish a Syariah Advisory Body (SAB). The SAB is responsible for ensuring the IFI’s operations are in accordance to Hukum Syara’. 

BDIF Regulatory Landscape

Islamic finance activities are governed under the Islamic Banking Order, 2006 (“IBO”) for Islamic banks, Takaful Order, 2008 (“TO”) for the takaful sector and Islamic capital market activities are governed under the Securities Market Order, 2013 (“SMO”) and its supplementary legislation the Securities Markets Regulations, 2015 (“SMR”). These legislations are administered by BDCB providing BDCB the authority to supervise and regulate them in a manner that maintains financial stability. Islamic finance institutions are subject to the same prudential standards and reporting requirements as conventional financial institutions. 

 

BDCB has also introduced additional regulatory requirements that the Islamic financial institutions need to comply. These include SFSB Order, Notice and Guidelines to Financial Institutions on Syariah Governance Framework, Guidelines on Internal Syariah Audit Framework, and Guidelines on The Islamic Product Approval Process under Section 14 of SFSB Order.