Islamic Finance News Portal – Bringing you the latest updates in global Shariah finance

Watch out for news alert!

Posts Tagged ‘Shariah Scholars

Islamic finance sector needs more sharia scholars

leave a comment »

Points of Essence:
  • The stringent requirements to be Shariah scholars contribute to the shortage of the experts to cater for the Islamic financial industry.  One would have to endure a long period of study and level of qualifications as well as being well versed in the area of finance before attaining recognition as a scholar. The rapid growth of Islamic finance worldwide is thus hampered due to a scarce supply of the scholars. The Arabian Business has the report.
Experts says there is a shortage of scholars qualified in both sharia and finance. (Getty Images)

MOON-LIGHTING: Experts says there is a shortage of scholars qualified in both sharia and finance.

As the world financial industry sheds jobs by the tens of thousands, the $1 trillion Islamic banking sector has a growing load of work for sharia scholars but few candidates coming forward to do it.

Experts steeped in the Muslim scriptures are critical to Islamic finance, which requires a religious stamp of approval before a bond, mortgage contract or other financial product can be marketed as moral according to the standards of the Koran.

But qualifying for this work takes much more time and effort than other jobs in finance require. Candidates must first study Islamic law or sharia for many years, and then master finance.

“Globally, and especially in Europe and America, there is a shortage Read the rest of this entry »

Advertisements

Written by Suapi Shaffaii

December 2, 2008 at 4:41 pm

Sharia scholars oppose more regulation on Islamic finance

leave a comment »

Points of Essence:

  • Shariah scholars have concerns for imposing legal standards for Islamic finance as it may be inconsistent with the Islamic principles of ijtihad (reasoning). Ijtihad is a potent tool to continuously reassess the modern day requirements of any particular Shariah injunctions. Read more about that in the article below.

Posted by: Tom Heneghan

At a time when many critics are calling for tighter regulation of the worldwide financial industry, Muslim scholars are saying that Islamic finance cannot be more tightly controlled for theological reasons. The Islamic finance industry has long been marked by divergent interpretations of Sharia, or Islamic law.

(Photo: Traders at Saudi Investment Bank in Riyadh, 8 Oct 2008)

Now, amid calls for standardisation, the scholars say the Islamic concept of ijtihad – reasoning to reassess  sharia in light of modern developments- bars any tighter regulation or coordination of this $1 trillion industry.

It’s rare that religious scholars get to dictate terms to business, but this might be one because Islamic finance is expressly built upon the principle of sharia compliance.

Here’s a report from Frederik Richter, a correspondent in our Bahrain bureau:

Scholars reject strict Islamic finance standards

MANAMA, Nov 10 (Reuters) – Islamic scholars on Monday cautioned against enforcing legal standards in the Islamic finance industry, even though the lack of standardisation is widely seen as an impediment to growth.

Scholars said at the conference of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) that legally binding norms would challenge the Islamic concept of ijtihad, or reasoning, that continuously re-assesses sharia, or Islamic law, in light of modern developments
This would make the industry more vulnerable to risks, they argued.

“There should not be sharia standards except in the form of reasoning, which gives different windows to solving problems,” said Mohamed Saeed al-Booti, professor at the University of Damascus and member of AAOIFI’s board of trustees.

(Photo: AmIslamic Bank in Kuala Lumpur, 11 Aug 2008)

Scholars said introducing binding legal standards for the industry would limit the diversity in Islamic banking products that they say has helped the industry weather the global financial crisis.

Sharia scholars play an important role in Islamic banking as they advise banks on whether specific loans and investments  comply with sharia, which bans interest and prohibits investments in certain areas such as gambling and alcohol.

The $1 trillion Islamic banking industry has ridden the boom in Gulf Arab oil earnings, but is struggling to reconcile vastly different interpretations of Islamic law.

Regulators and industry practitioners said legally enforced industry standards are badly needed to increase investment certainty and lower transaction costs.

“Western banks and lawyers find it difficult to understand how to enforce a contract that one group of Islamic scholars opposes and the other doesn’t,” said Neil Miller, partner at international law firm Norton Rose.

He added the industry needed to discuss how to address this issue without moving away from its diversity, which he said has been valuable to the sector.

Source: blogs.reuters.com

Written by Suapi Shaffaii

November 14, 2008 at 11:54 am

Gatehouse Bank appoints head of Shari’ah advisory and compliance

leave a comment »

Points of Essence:

  • UK based Gatehouse Bank recently announced the appointment of Mufti Muhammad Nurullah Shikder as its head of the Bank’s Shariah advisory and Shariah compliance. Shikder will oversee the day to day transactions of the Bank to ensure compliance with the Shariah as well as provide training in the related areas. He was previously with Dubai Islamic Bank and currently sits on on the Shariah Board of other financial institutions.

By: Staff Writer

Gatehouse, Dubai Islamic Bank, Shari'ah board, advisor, appointments,

Mufti Muhammad Nurullah Shikder previously spent three and half years with Dubai Islamic Bank in the Shari'ah Coordination Department and worked closely with Dr. Hussain Hamid Hassan, Chairman of the DIB Shari'ah Board.

Gatehouse Bank, a Shari’ah-compliant wholesale investment bank based in the UK, has appointed Mufti Muhammad Nurullah Shikder as head of Shari’ah advisory and Shari’ah compliance.

Gatehouse Bank said its Shari’ah Advisory and Shari’ah Compliance Department will be providing Shari’ah services in the following core areas:

Shari’ah Advisory:

• Assisting with the structuring of Shari’ah compliant products and offerings and issuing the relevant Fatwa;

• Reviewing transaction documentation in accordance with the principles of Shari’ah;

• Providing general Shari’ah consultancy/advice on an on-going basis.

Shari’ah Audit & Compliance:

• Providing Shari’ah audit services;

• Reviewing executed transaction documents to ensure continuous Shari’ah compliance;

• Preparation of Shari’ah auditor’s reports.

Read the rest of this entry »

Written by Suapi Shaffaii

October 29, 2008 at 8:30 pm

Islamic bond market ‘wrecked’ by critical remarks

leave a comment »

Points of Essence:

  • The sudden fall of the Islamic bond market was attributed to a strong Shariah view from a prominent Shariah scholar questioning the compliance of the bonds with the Shariah requirements. Sheikh Muhammad Taqi Usmani has since been blamed for the rapid decline of the bond issuance from $50 billion to just S14 billion last year.
File photo of a speaker at an Islamic Finance conference. (Getty Images)

MAJOR UNCERTAINTY: File photo of a speaker at an Islamic Finance conference.

by Jason Benham

Debates over how sharia-compliant Islamic bonds really are have “wrecked” the sukuk market, causing issues to fall to $14 billion this year from up to $50 billion last year, a leading expert said on Tuesday.

“The statements that were made by our sharia chairman about the sharia compliance of sukuk wrecked the market,” said Mohamad Nedal Alchaar, secretary-general of the Accounting and Auditing Organization for Islamic Financial Institutions.

Sheikh Muhammad Taqi Usmani, chairman of the board of scholars Read the rest of this entry »

Written by Suapi Shaffaii

October 29, 2008 at 3:37 pm

HSBC Amanah convenes its Global Advisory Shariah Board in Makkah

with 2 comments

Points of Essence:

  • HSBC Amanah held the 3rd bi-annual meeting of its Global Shariah Advisory Board recently to discuss Islamic financial industry issues, including the role of Islamic debt and equity modes of finance, legal infrastructure for Islamic financial products and the importance of increased awareness and education of the public with regards to Islamic Finance.

  • The meeting intended to gather scholars and business people regularly to discuss the impending issues encountered by the industry and subsequently provide appropriate solutions. Attended by senior Shariah scholars from different geographies, it will promote harmonization of Shariah standards and practices that apply to Islamic finance.

  • The Shariah governance at HSBC Amanah consists of two structures:
  1. Global Shariah Advisory Board which comprises independent Shariah scholars advising the bank on concepts and structures used for Shariah compliant products and services; and
  2. Central Shariah Committee, which reviews institutional transactions and new products and conducts annual Shariah audits to ensure that all HSBC Amanah operations are Shariah compliant.

As part of its continuous efforts to engage both Islamic scholars and bankers in constructive dialogue about the pressing issues and challenges facing Islamic finance, HSBC Amanah, the global Islamic banking division of the Islamic division of the HSBC group, held the 3rd bi-annual meeting of its Global Shariah Advisory Board, in the Holy City of Makkah, on 4th September.

Click here for more!

Written by Suapi Shaffaii

September 23, 2008 at 6:27 am

Sharia finance needs real deal, not copycats – scholar

leave a comment »

Points of Essence:

  • Mohammad Akram Laldin, a leading Shariah scholar called for more innovative Shariah products to be rolled out instead of churning out imitated conventional products. He was wary that  some principles or objectives of certain contracts might have been diluted in order to accommodate conventional features. The scholar lamented the tendency to copy conventional instruments which was contributed by a lack of experts skilled in both the sharia and finance.

By Liau Y-Sing KUALA LUMPUR, Sept 18 (Reuters) – Sharia banking needs to develop more of its own products and avoid imitating conventional financial instruments in structures that compromise the spirit of Islam, a leading religious scholar said. Sharia instruments have to satisfy Islam’s objective of ethical and equitable investing while retaining a commercial proposition that can draw investors who plough in funds with the aim of reaping returns.

Scholars say Islamic bankers sometimes tailor sharia instruments according to market demands to ensure they can be more easily sold as Islamic assets vie for investors that also have access to a wider range of conventional banking products. “People tend to, to a certain extent, dilute some of the principles or objectives of certain contracts in order to accommodate conventional features,”

Click here for more!

Written by Suapi Shaffaii

September 19, 2008 at 3:01 am