A central Shariah board under the Central Bank should be created to replace the current practice of each Islamic financial institution having its own board, to oversee Islamic finance and banking activity in the country, Islamic scholars said.
Until such time a central board is created, measures must be undertaken to ensure that the salaries of Shariah board members do not come from their individual retaining banks, but from a central pool. This would ensure neutrality, transparency and above-board decision-making, experts pointed out.
They called on central banks to intervene to help standardise, streamline and control all Islamic transactions.
"It is unprecedented that a scholar is paid by the party seeking a Fatwa. It is also against Islamic principles that the arbitrator is paid by one of disputed parties," said Dr Abdulazeem Jalal Abozaid, Professor of Islamic Law of Transactions at Damascus Univer-sity, Faculty of Shariah, and Shariah Consultant and trainer for Islamic financial institutions in the UAE.
Dr Abozaid pointed out that there is currently a lack of a centralised control on Islamic banking products. Some products that are cleared as "Islamic" are sometimes controversial.
"The situation begs for central banks to intervene and stipulate a set of rules and regulations for joining Shariah boards to help maintain the public's confidence in Islamic banking and ensure global growth," said Dr Mabid Al Jarhi, President of International Assoc-iation for Islamic Economics and head of training and financial expert at Emirates Islamic Bank.
He said Shariah board members should be holders of PhDs from recognised and accredited universities. Dr Abozaid said that central banks should have a special division for Shariah governance.
The Shariah board should consist of an odd number of members to ensure there is a majority whenever voting takes place, added Dr Al Jarhi.
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