This is another article worth commenting - see Finding the middle ground. The article was from Islamic Finance Asia (Feb/Mar 2009 issue).
For the information of all, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has been set up to set standards to be followed by Islamic Financial Institutions to streamline and provide standardization of Islamic finance practices and build the confidence of customers and other stakeholders while promoting the sustainable growth of the industry. As I've commented in my earlier post, not many organizations and/or countries wish to adopt the standards issued by AAOIFI.
However, I disagree with some of the panelists in the article - standards should be set up even if the industry is still new. Islam does not restrict what you want to do provided the act is within the parameters of Shariah. Now, the parameters are unclear - they depend on interpretation of each Shariah scholar sitting in the Shariah Board - this should not be the way. As a result, you can see that certain "Islamic product" like Bai Bithaman Ajil (in Malaysia) is not being accepted in the Middle East.
Therefore, standardization is a requirement. Now, it is a matter of adoption of these available standards by the organizations/countries - this is the main problem.
For the information of all, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has been set up to set standards to be followed by Islamic Financial Institutions to streamline and provide standardization of Islamic finance practices and build the confidence of customers and other stakeholders while promoting the sustainable growth of the industry. As I've commented in my earlier post, not many organizations and/or countries wish to adopt the standards issued by AAOIFI.
However, I disagree with some of the panelists in the article - standards should be set up even if the industry is still new. Islam does not restrict what you want to do provided the act is within the parameters of Shariah. Now, the parameters are unclear - they depend on interpretation of each Shariah scholar sitting in the Shariah Board - this should not be the way. As a result, you can see that certain "Islamic product" like Bai Bithaman Ajil (in Malaysia) is not being accepted in the Middle East.
Therefore, standardization is a requirement. Now, it is a matter of adoption of these available standards by the organizations/countries - this is the main problem.
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