Selection Criterion for Shari’ah Advisory
Because part of the purpose of having a Shari’ah board is marketing, banks are keen to recruit reputable Shari’ah scholars who, by just associating themselves with the bank will give it legitimacy. These people, however, are hard to come by. It is because of this we see Shari’ah boards membership circulates around a limited number of scholars who seem to appear in every Shari’ah advisory. While knowledge of Shari’ah is essential (and banks usually will entrust such function only to established scholars), knowledge of banking is becoming very desirable. This is because bank clients began to suspect that some Shari’ah boards, though declaring the bank’s adherence to Shari’ah, actually don't possess the capability to comprehend all the intricacies of modern banking. Hence, they fully depend in their judgment on information provided by the management which creates a situation of conflict of interest. Unless the Shari’ah advisor can understand the sophisticated elements of banking, he may not be able to relate transactions to their most appropriate Shari’ah axioms and precedents, nor that he will be able to give guidance to the process of product development in the bank.
Source: An Introduction To Islamic Banking, Shaykh Dr Mohamed Ali Elgari. Republished with permission.
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