President of the IDB recommends establishment of a global Shariah board (By IFN)

President of the IDB recommends establishment of a global Shariah board

Daily Cover

GLOBAL: The Islamic Financial Services Board (IFSB)’s 10th Summit last week saw high-level central bankers and regulators convene to discuss issues pertaining to developing a sustainable and robust Islamic banking system through the development of standards and regulatory uniformity. Amongst those who attended the Summit were Dr Zeti Akhtar Aziz, the governor of Bank Negara Malaysia; Sheikh Abdulla Saoud Al Thani, governor of the Qatar Central Bank and chairman of the IFSB 2013, and Dr Ahmad Mohamed Ali Al Madani, the longstanding president of the Islamic Development Bank. Ahmad, who was elected as the bank’s first president since 1975, also served as secretary general of the Muslim World League from 1993 to 1995. In his speech, Ahmad touched on the development of the Islamic economy through the creation of a conducive environment to encourage a sustainable market; the development of Islamic microfinance through the involvement of industry stakeholders; the creation of standards for this sector by the IFSB and the conceptualization of a globally-recognized Shariah committee. Ahmad said: “The IDB and IFSB should study ways for creating globally-acceptable references for the industry. This could include striving for the concept of a globally-accepted Shariah committee or body, which would be able to assist all Islamic financial institutions and bring them in line with a uniform standard.” He stressed that this initiative would be instrumental in creating “much-needed” structure in the industry and enabling it to become robust and sustainable. In Vol 9 Issue 14 of Islamic Finance news which was published in April last year, our cover story explored the possibility of setting up a Shariah Scholars Board; a universal and independent committee of Shariah scholars with no attachment to government bodies or banking and financial institutions. The suggested non-profit organization will hypothetically be tasked with enforcing the prescribed regulations and guidelines of each market to enable the fluidity of transactions, standard documentation and work under full transparency. Although the industry, with its different schools of thoughts and relatively insular methods of approach — depending on different markets and jurisdictions — is far from ready to adopt the practice of having a universal Shariah Scholars Board, there has been progress in the market to some extent, in terms of recognizing the need to “regulate” its scholars through the development of a “code of conduct” for Shariah scholars by the International Shariah Research Academy for Islamic Finance and the Islamic Research and Training Institute. The initiative is said to be currently underway.