Saturday, May 20, 2006

'Shift to Shariah-Based Financial Products'

Saudi entrepreneur Saleh Kamil, president of the Dallah AlBaraka Group and one of the pioneers of Islamic banking, has called on the industry to go back to its basics and to shift from Shariah-compliant to Shariah-based financial products.

"What worries me in Islamic banking today," he said, "is that there are not many bankers or academics that understand the spirit and philosophy of fiqh al-muamalat. Our scholars tend to find tools in traditional banking. We think we are excellent. But what we want is to design instruments according to our Shariah and not the other way round."

Getting to the heart of the problem can be easy; daring to publicly admit it cannot. Especially if the problem is at the heart of what you are standing upon. And that precisely is what makes the difference!

"Those who started the Islamic banking movement did not try to train the traditional bankers in the spirit and philosophy of Islamic finance." Very well said, indeed!

At a practical level, cynics will, no doubt, be waiting for him to suggest his alternative strategies in order to determine how significantly different they are from the current market practice.

However, a majority of the scholars would express their reservation on his alleged suggestion that the Zakah fund may be 'harnessed for adding value in education, training and tourism.' I hope his position is studied in detail before a fatwa is issued.