INCEIF is effectively the training arm of Bank Negara Malaysia, the central bank. Since its establishment in 2006, it has spearheaded the human capital challenge not only of the Islamic finance industry in Malaysia but also globally, for INCEIF graduates come from all over the world and include both Muslims and non-Muslims. Its prime objective is not only to produce top Islamic finance graduates who will command premium salaries, but also academics who will teach the next generation of Islamic bankers. Agill Natt, chief executive officer of INCEIF, discusses the rationale behind the establishment of INCEIF, its structure and progress thus far, and the challenges that lie ahead not only for INCEIF but also for the human capital development in the global industry.
Excerpts:
When did you start and what is the rationale behind the establishment of INCEIF?
We started in mid-2006 when we had our first intake of CIP (Chartered Islamic Finance Professional) Qualification students. Our founding fathers recognized that Islamic finance is growing at a rapid pace. Many financial institutions stressed that they could not afford for some of their staff to go into full time training and courses, and asked INCEIF if it could structure an online distance-learning course on Islamic finance. That is how we started. But since June 2007, we have also been offering full-time courses because we wanted to better utilize the time and expertise of our faculty members. Currently we have 1,200 registered students. The first group of CIP students graduated in February 2009. The bulk of our students do the distance-learning course, but an increasing numbers are now opting for full-time courses. In June 2009 we had an intake of another 70 students for our full-time program. At the moment, some 30 percent of the students are non-Malaysian and we also have a small number of non-Muslim students. Our aim is to increase the number of non-Muslims and non-Malaysian students at INCEIF. In the first group of graduates, we had students from Yemen, Syria, Indonesia and Thailand. Now we have students from Japan, Hong Kong, CIS, Europe, Thailand and the Middle East. In fact, the President's Award for the Best Student in the CIP in the first group of graduates went to a non-Muslim student. In addition, we have also started to offer Masters and PhD programs.
Are your courses accredited and recognized and what is the language of tuition?
All our qualifications are recognized by the Malaysian Qualifications Agency (MQA). We are not an undergraduate institution but a post-graduate one. CIP is recognized as the equivalent to a master's program by the MQA, which allows holders of such a certificate to register for a PhD program, either at INCEIF or at Malaysian universities. Some 50 percent of the Master's program participants are non-Malaysian. The Master's program is either done by course work and dissertation or by fulltime research, in which case students must have the relevant number of years' experience. Our Master's program is a full-time course at our city campus. We are training international finance professionals and thus we felt that we should stick to English because it is the language of international finance and business. However, we have had requests to give the courses in other languages.
Do you have any links with other universities and institutions abroad?
We have links with many foreign institutions, especially in Pakistan, Indonesia, UAE, Bahrain, Syria, Iran, where they are either adopting our program or adapting it to suit their local needs. We provide them with the program - the curriculum and teaching materials. So far we have no such collaboration with a Saudi university. One of the issues in Saudi Arabia is the language. But here are many candidates with a high proficiency in English so we are exploring possible collaboration for the future.
Islamic finance graduates always complain about the difficulty of finding jobs after they qualify. Is there a mismatch between graduates and employment possibilities?
We encourage more Shariah graduates to pursue careers in banking. True, traditionally the way into Islamic banking has been through the conventional banking sector. Ten years ago, there were no universities offering Islamic finance as a discipline. The banks had no choice but to recruit from conventional banks. The downside was that these recruits had no grounding in Shariah matters. They had to unlearn and relearn. Our terms of reference are to create a new breed of bankers. Our intake profile also shows a good number from other disciplines such as law, accountancy etc. In terms of our graduates, they have been snapped up very quickly but the economic downturn has affected recruitment. The good times will come back and these people will get jobs in the market. The best accolade for us is when our graduates get snapped up and are paid a premium. This is how I am going to measure the benchmark.
Do you have any aspirations of becoming the Islamic INSEAD or Harvard Business School?
That is our vision but those two institutions have a long history and resources. If anybody thinks of Islamic financial education, we would like them to think it is INCEIF. The best accolade is industry recognition.
What is your staff structure?
At INCEIF and our sister institution, ISRA (International Shariah Research Academy), which is part of our university, we have 29 faculty members, of whom 85 percent have PhD degrees. INCEIF has been accorded university status under the Private Education Act of Malaysia.
How does INCEIF deal with cross cultural issues including questions dealing with Shariah interpretations of various Schools of Islamic Law?
Malaysia has the biggest product range in the Islamic finance industry in the world. But the body of knowledge in Islamic finance is everywhere. We try not to be too Malaysia-centric. Islamic finance is all about contracts. If you look at the various jurisdictions, not all the regulatory, legal, tax and other infrastructure is in place. We can't help being a bit Malaysian-centric because the market is the most advanced from a systemic point of view. We try to cover the various conventions and to compare the practice in different markets. The root of the Shariah is the Qur'an, Hadith and the Sunnah. We take great pains to go through the historical developments of all four Sunni Schools of Islamic Law. We do not take sides or push one particular school of law. We explain the development and context in which certain contracts are practiced in whichever part of the world and why. The aim is make the students understand why differences occur. After all we are training them to work in the global market.
How do you see the state of education in Islamic finance?
One major problem is there is no uniform standard. There is an urgent need for a global initiative in order to set a standard. Quite a number of organizations are coming up with various courses - some rudimentary, some intermediary, and some at higher standards. It is not for me to comment on the others. We are trying to teach the theory, practice and the Shariah aspects. I would advise prospective candidates to scrutinize the curriculum, the courses, resources, staff etc. before they enroll for a particular course in Islamic finance. Unfortunately, it seems anybody can set up courses and claim that they are offering expert tuition. When it comes to a uniform standard, the industry has to step in and make sure it is at the required level that it requires. What is absent is the standard-setting board for everyone. I don't know how this will be solved. At present, it is best for the standard-setting board in each country to oversee this.
What about the state of university education in Islamic finance?
One reason why we offering Masters and PhD courses is that we also want to produce teachers for the future. I suppose one of the problems for universities is that they have not been able to recruit enough academic staff qualified in Islamic finance. Shariah graduates have to be retrained in Fiqh Al-Muamalat issues. It is a question of Shariah education as well.
Can you expand on the cooperation which you engaged in with Reading University in the UK?
Our cooperation is not based on one size fits all, but depends on the university and country. The core basis is the sharing of intellectual property - curriculum and content. There is no point in each one reinventing the wheel. The important thing is that the curriculum can be adopted or adapted depending on the legal framework of each country or institution. The qualification can be theirs or ours or joint. In the case of Reading University, we are jointly offering a 1-Year Masters (MSc) in Investment Banking and Islamic Finance. Two terms are spent on the campus at Reading University and one term at INCEIF in Kuala Lumpur. In Indonesia and Bahrain, we run our program jointly with local universities.
By Mushtak Parker
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