But the former CEO of Kuwait International Bank argues that standardization of global Islamic banking suite of products and services will lead to more uniform Shariah compliance over time.
ABF: Do you see Shariah compliance becoming more or less uniform across the Islamic banking market?
Badlisyah Abdul Ghani, Executive Director and Chief Executive Officer, CIMB Islamic
Anyone who undertakes Islamic finance must do so in a manner that does not contradict with the religion of Islam as found in al Quran and Hadith (i.e. the Shariah). There is no other way. Undertaking Islamic finance in compliance with Shariah means applying Shariah in the respective jurisdictions by taking into account unique operational parameters found in that jurisdiction.
Every jurisdiction will have different law of the land, legislation, financial regulation, market conventions, customs, cultures and outlook in life depending on society, and all of these influences how Shariah is applied in any financial transaction. There will not be any uniformity of application of Shariah.
This will continue until the end of time unless there is an effort on the part of every jurisdiction to have the same law of the land, legislation, market conventions, customs, idiosyncrasies of society, etc.
Although there will never be uniformity in the application of Shariah, there is and will always be uniformity of Shariah because everyone follows the same Shariah, which is the Quran and Hadith. The question of whether Shariah compliance is more or less uniform is irrelevant as it is 100% uniform.
Adil Ahmad, Former CEO of Kuwait International Bank
At the moment Islamic banking assets (totaling approximately USD 1 trillion) account for approximately 1% of the world’s total banking assets. Practitioners, regulators and supporters of Islamic banking want this percentage to increase over time, and for Islamic banking to have a position in the financial world at least commensurate with the percentage of Muslims in the world. For this to happen, the various current clusters of Islamic banking (i.e. South East Asia, South Asia, the Middle East and Europe/America) will have to move towards standardization and harmonisation of global Islamic banking suite of products and services, so that they are interchangeable across the various geographies. This is what, I believe, will lead to more uniform Shariah compliance over time.
Do you know more about this story? Contact us anonymously through this link.