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Aishath Muneeza, Ismail Wisham, Rusni Hassan,
International Islamic University Malaysia
arbitrators in disputes involving Shariah issues in Islamic
banking, finance and takaful cases.
There are challenges facing the Islamic scholars convening in
these Councils. Firstly, they have the dilemma of going
through the lengthy Islamic Banking instruments and they
need to have knowledge and experience to do this, which
most of the scholars are found wanting of. Secondly, they
need to synergize between the Shari’ah requirements with
the legal and taxation framework. Thirdly, they also need to
learn how to use innovation in Shari’ah compliance and
viable products. And the most controversial problem is with
regard to balancing between the monetary gains and
fulfilling of the Shari’ah objectives and use of clear and
transparent procedure in decision making.
It is true that no Islamic financial transaction can be closed
without the sign-off of the Shariah Advisory Board as to
whether the transaction or structure satisfies the tenets of
Fiqh Al-Muamalat (Islamic law relating to financial
transactions). In many markets, the reputation of the socalled
top tier of international Shariah advisories do not
mean much as retail customers in particular prefer to have
the input of their local imam or Shariah scholar. This is a
potentially a major problem for the development of the sector
because not every local imam or Shariah scholar is
conversant with the rubrics of Fiqh Al-Muamalat, which is a
highly complex yet under-developed area of Islamic
jurisprudence.
The Islamic finance sector not only has a human capital
development challenge but, perhaps equally importantly,
also a Shariah advisory development challenge. While the
universities and specialized academies are now starting to
offer academic and training courses in this respect, they are
still few and far between and their curricula are at best
mixed and not quality controlled. This leads to the
complicating matter relating to lack of globally accepted
qualification as a Shariah scholar, just as there are no
globally accepted standards for Shariah rules, which are to
some extent open to interpretation. Since Shari’ah Advisors
are the backbone of the industry, it is put forward here that
the composition of these Councils need to be reformed and
standardized globally. This is because, today the scholars of
Islamic law have monopolized the Islamic Banking system
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