Sharia advisers can be held accountable in court for lapses in their duty but it would be hard to make a case against them as their role involves views which differ across the industry, a top scholar said recently.
Sharia advisers are gatekeepers of the $1 trillion (Dh3.67 trillion) Islamic finance industry, applying Islamic and banking law to decide which financial practices and products comply with Sharia.
As the industry tries to reach wider markets and more products are developed, there has been debate on the role and accountability of Sharia advisers.
Mohammad Akram Laldin, executive director of the International Sharia Research Academy for Islamic Finance, said Sharia advisers have to answer for failures in their functions but not business decisions.
"Sharia advisers are not above the law. If they make a clear mistake in their decision, they should be accountable," said Akram, who also advises the Malaysian central bank, which oversees the world's largest Islamic bond market.
"When it comes to a matter related to Islamic finance and Islamic law, it is views and opinions. If it is related to different views, different interpretations, then you cannot say you are right because you take this view and you are wrong because you subscribe to a different view."
Different schools of thought interpret the Sharia differently, resulting in certain practices being accepted in some jurisdictions and rejected as un-Islamic in others. For example, the Hanafi school of thought does not allow debt to be sold to third parties, but some schools sanction it under certain conditions, including that the price must be paid on the spot and that the sale must not lead to interest.
Akram said Sharia advisers only rule on how products should be structured and banks ought to carry out audits. "Auditing will ensure that what is implemented is correct based on the decision made by the Sharia board."
Link: http://www.gulfnews.com/business/money/10354083.html
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