Setting the pace in Shariah, Islamic finance research
Category: Trust Islamic Forum Written by Mushtak Parker
Whether it is at the Islamic Finance Summit held at the Cercle de l’Union Interalliée in Paris, France, or a lively open fatwa session at the Islamic Retail Banking Conference (IRBC) held in Dubai or the 1st Euro-Arab Real Estate Conference held in Barcelona, Spain, it is certain that a “new kid on the block” will be a key participant.The International Shariah Research Academy for Islamic Finance (ISRA) — the Shariah research entity of Bank Negara Malaysia, the central bank, armed with a trust of 200 million ringgits and led by Shariah scholar and executive director Mohammed Akram Laldin — is fast making its mark in an industry segment not known for its convergence or purpose of unity. ISRA, under its mandate, is dedicated to promoting applied research in the area of Shariah and Islamic finance.
In November, ISRA, which was established in Kuala Lumpur some four years ago as a sister organization to INCEIF (the International Center for Education in Islamic Finance), held its fourth annual International Shariah Scholars’ Conference on Islamic Finance (ISSC), which was officially opened by Sen. Mashitah Ibrahim, deputy minister in the Malaysian Prime Minister’s Department, who is herself a trained Shariah scholar. Shariah scholars from all over the world led by Abd Al-Salam Dawud Al-Abadi, secretary general of the International Islamic Fiqh Academy, which is based in Makkah, participated in the event.
One GCC scholar who wished to remain anonymous stressed that the ISSC has the potential to become the Shariah authority of last resort for the global Islamic finance industry, because it is administered by ISRA, a well-established and well-funded professional organization. At the same time both ISRA and ISSC are located in a country whose government is fully supportive of Islamic finance and where there is transparency and open debate about Shariah matters relating to Fiqh Al-Muamalat (Islamic law relating to financial transactions) — a situation that you do not necessarily have in most Muslim countries for various reasons.
The ISSC is an annual event jointly organized by ISRA and the Islamic Research & Training Institute (IRTI), a member of the Jeddah-based Islamic Development Bank (IDB) Group, in collaboration with the Department of Fiqh and Usul-al-Fiqh at the International Islamic University of Malaysia (IIUM) in Kuala Lumpur.
Indeed, the growing importance of ISRA in research relating to Shariah and Islamic finance is further reflected by the cooperation the academy is forging with institutions and counterparties especially in Asia, Europe and the GCC countries. At the ISSC ‘09, ISRA signed three memorandums of understanding (MoUs) with Affin Islamic Bank, IRTI and Kuwait Finance House Malaysia (Kuwait Finance House Malaysia).
With Affin Islamic Bank, ISRA agreed “to promote cooperation in Islamic finance on the basis of equality and mutual benefit.” One area of cooperation is specific collaboration particularly with regards to research on alternative financing concepts to the Al-Inah and Al-Dayn (sale of debt) concepts. Products based on the two concepts are largely practiced in Malaysia and are not approved by Shariah scholars in GCC countries, Pakistan and Bangladesh.
Perhaps the most significant agreement is to translate into English all the Shariah resolutions from the Fatwa and Shariah Supervisory Board meetings of Kuwait Finance House held from its inception in 1977 up to 2009. The translation on completion will then be reviewed and endorsed by a committee consisting of Shariah scholars as well as business practitioners before being released for distribution to customers, regulators, academics and other relevant institutions. The original Arabic version has already been distributed to the above parties in Kuwait and the Middle East.
“This joint project with KFH-Malaysia provides us with the perfect tool to effectively share developments in Islamic finance over the years and enhance understanding of the Shariah among the Ummah. This massive translation project creates a need for more specialists and inspires us to increase our effort to identify and source for even more talents in Islamic finance,” stressed Laldin, who is also a member of the Bank Negara Malaysia National Shariah Council.
Al-Tabtabae explained that this is the first time Shariah resolutions in Arabic issued by a foreign Islamic bank are being translated into English in Malaysia. “As the leader in Islamic finance and the first foreign Islamic bank in the country, KFH-Malaysia is committed to create ongoing awareness on Shariah-based banking practices. At present, there is a limited source of reference in English available on Islamic financial cases, arising issues and rulings. We are honored to take this initiative with ISRA to reproduce the Shariah resolutions and disseminate the specific Shariah knowledge related to banking and finance to the public,” he added.