Lahore School of Economics

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A New Paradigm of Ratings in Islamic Finance
May 30, 2014

Sobia Maqbool, CFA, Group Head JCR VIS Rating Company Limited

The evolution of Islamic Finance as a parallel to conventional finance has gained significant global recognition in the past few decades. Islamic Finance is recognized as fundamentally different from conventional finance. Its rapid growth in recent years has coincided with the evolution of regulatory framework and guiding principles by international standard setting bodies. These developments bear cognizance of the unique nature of Profit Sharing Investment Accounts (PSIAs) in an Islamic Financial Institution (IFI) and the rights and obligations unto same. Islamic finance has however only sparingly benefitted from ratings that are suited to Islamic finance and Shari’ah compliant transactions. Recognizing the need for an independent rating methodology that does not try to fit IFIs into the traditional approach to ratings, JCR-VIS Credit Rating Company Limited launched the Fiduciary Rating System from the platform of Islamic International Rating Agency.

Sobia Maqbool, CFA is in charge of rating assignments across a diverse range of sectors, including corporates, sub-sovereigns and financial institutions, including commercial banks, insurance companies, investment banks, leasing and modaraba companies (Islamic finance), microfinance institutions, brokerage houses & mutual funds. In addition to this, she is also involved in research activities, development of methodologies & staff training. She has spoken at both local and international forums. She has a Master's degree in Business Administration from the Institute of Business Administration, Karachi and is also a CFA charter holder.