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Sunday, 18 November 2007

Islamic banking in need of guidelines

Due to the diverse understandings of Shariah among Muslims many of Islamic banks today are finding it increasingly difficult to make decisions. 'Everyday we have scholars disputing over aspects of Shariah and how they should be interpreted that's why there is a dire need for standardization of Shariah opinions,' said Humayon Dar, CEO of BMB Islamic at the Dubai International Financial Centre (DIFC) conference. Dar added that the initiative has to be taken by Islamic banks as governments and financial service authorities have showed 'lack of interest' in taking part in the codification and standardization process. 'Either that or they are not competent enough to do it,' said Dar. As a first step to resolve this issue Dar suggested that DIFC would set up a code of best practices in Shariah advisory, which would be implemented by the regulators. 'Also the regulator must have a centralized Shariah council,' he added. Another aspect that has to be tackled is giving scholars an incentive to make fatwas. 'These days the scholars don't have enough time to make fatwas on Islamic banking so we have to give them incentive to allocate more of their time to the sector,' said Dar. - (AME, 18 Nov 07)

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