The World Bank (WB) and Islamic Development Bank (IDB) Sunday signed a Memorandum of Understanding (MoU) to set out a framework for collaboration between the two parties and lend support to global, regional and country efforts in the development of Islamic Finance, reports UNB.

President of the IDB Group Dr Ahmad Mohamed Ali and WB Managing Director Dr Mahmoud Mohieldin signed the memorandum on behalf of their respective institutions in Tokyo with the common objectives of fostering, encouraging, and studying the expansion of Islamic finance globally, according to a message received here from Tokyo on Sunday.

The MoU adopts the following principals - knowledge sharing to identify and disseminate sound practices in the Islamic financial services industry, cross fertilization of ideas that would foster the development of Islamic finance that is critical for growth, efficiency and financial inclusion, encourage research and promote awareness of appropriate risk management framework for Islamic financial institutions in particular and the Islamic finance industry in general; and capacity building in the Islamic financial services industry with a view to fostering financial stability and promoting increased access to Islamic financial services in markets around the world.

World Bank Managing Director Dr Mahmoud Mohieldin stressed the importance of the memorandum for increased capacity-building and knowledge-sharing between the two organizations.

"The MoU signed today between the IDB and WB will help us deepen our understanding of Islamic finance and build capacities to develop institutions and instruments to support sustainable inclusive growth and help societies to achieve their development goals with emphasis on poverty alleviation and shared prosperity," he said.

"The signing of today's MoU between the World Bank and IDB aims to forge a strategic partnership between our two institutions in the area of Islamic finance to support inclusive growth, including greater access to finance for the poor, and financial stability in our mutual member countries. We expect to do this by expanding our knowledge base as well as our ability to support our member countries' efforts to build resilient institutions and develop instruments to achieve greater financial inclusion and sustainable development," said President of the IDB Dr Ahmad Mohamed Ali Al Madani.