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Posted On: 22 April 2009 08:04 am
Updated On: 12 November 2020 02:09 pm

Summit fails to resolve Shariah-compliance debate

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Islamic banking leaders concluded their two-day conclave here yesterday but fell short of resolving the vexed issue of how to make sure there are no differences in jurists’ opinions on Shariah-compliance of a product. The controversy which was stoked by a Pakistani Islamic scholar last year, who said most ‘sukuks’ were non-Shariah-compliant and jolted the global Islamic bond market, was also hotly debated at the forum. It was clear that delegates, most of them top-ranking financial and banking experts, were quite unhappy about the row. Although several scholars like Hussein Hamed Hasan and Mohamed Imran Usmani were invited to the forum, some delegates privately rued there was a yawning communication gap between the jurists and the financial and banking experts. Several delegates were heard lamenting that jurists hardly gave them time to sit together and discuss issues related to a product. “They have no time,” a delegate said. The growing mistrust between the two sides came to the fore when, during one of the concluding sessions yesterday, a delegate suggested that pronouncements about Shariah-compliance of Islamic products be assigned to a single body comprising learned scholars and it be placed under the Organization of Islamic Conference (OIC) states. Another delegate said the jurists should not be put on a high pedestal and instead be treated as an expert from any other field. Yet another delegate suggested that Islamic financial jurists be placed under the government and paid ‘high’ salaries like the court judges. Later, during a panel discussion on the global ‘sukuk’ market, experts said they saw the market recovering from the adverse impact of the controversial pronouncement and that of the ongoing global recession. Faiz Nassim, from Q-Invest, said ‘sukuk’ prices fell because, post-recession, large buyers like the hedge funds sold them in distress. He said financial institutions based in the Middle East were the largest ‘sukuks’ buyers and with liquidity coming back to the market, they were likely to get back to the (Islamic bond) market.