FOOD FOR THOUGHTS....

I was reading this article - Practical legal issues in Islamic banking, written by a learned law practitioner with regards to the Islamic banking environment in Malaysia.

In summary, the author listed down issues faced by Islamic banking in Malaysia :

1) Insufficient legal protection

2) Jurisdiction – whether Shariah Vs Civil Court

3) Difficulties in turning concepts into practice

4) Assets to be used as underlying assets – must be owned by customer, free from encumbrances

5) Security to be offered must be Shariah compliant

6) Transaction cost

7) Additional documents and clauses

8) Lack of expertise

The article was written and published in April 2008 and now is mid March 2009 – about a year later and let us compare how far has the situation changes :

a) Items 1, 2, 3, 4, 5, 6, 7, 8

These issues still persist – a good example is the controversial ruling on BBA by the High Court late last year.

It is very sad to note that despite a lot of “hue and cry” from the banking industry, practically nothing has changed ever since.

Will we need to wait for the next millennium to change? Think about it.....

MAIN CONCLUSION - ALLAH KNOWS BEST

Well, I was reading a few articles on finance and found how ironic that these people (mainly westerners) who championed free trade and free market (and pure capitalist) are moving towards Islamic banking as an alternative, not because of what it represents but because it serves as a temporary solution until their “mess” have been cleared.

I guess they would revert to conventional banking again once the economy has return to normal. I guess some people will never change.

I was quite taken by a remark made by a learned professor last week - regarding Shariah. Everyone who is anyone is talking and giving opinions about Shariah – but do they really know what they are talking about? A good example is when an NGO talked about the need to revamp the faraid system as it is not fair to the women. Personally, I am a woman and I know for a fact that we mortals cannot change what has been specified in the Holy Quran. Everything that has been put forward to us has its own reason and whatever the reason may be, sometimes things are just beyond our human capability to comprehend and understand – only Allah knows best (wallahualam).

6TH IFSB SUMMIT IN SINGAPORE

Eight central bank governors have confirmed their participation in the 6th Islamic Financial Services Board Summit (IFSB) from May 5-8 in Singapore.

The governors are from Bahrain, Jordan, Korea, Malaysia, Qatar, Saudi Arabia, Singapore and the United Arab Emirates (UAE).

Themed, "The Future of Islamic Financial Services", the core aim of the summit is to highlight the role of the various stakeholders towards developing a robust future for the Islamic financial services industry (IFSI).