Whether it is at the Islamic Finance Summit held at the Cercle de l’Union Interalliée in Paris, France, or a lively open fatwa session at the Islamic Retail Banking Conference (IRBC) 2009 held in Dubai or the 1st Euro-Arab Real Estate Conference held in Barcelona, Spain, all held over the last two or three months, it is certain that a “new kid on the block” will be a key participant.
The International Shariah Research Academy for Islamic Finance (ISRA) — the Shariah research entity of Bank Negara Malaysia, the central bank, armed with a trust of 200 million ringgits and led by Shariah scholar and executive director Mohammed Akram Laldin — is fast making its mark in an industry segment not known for its convergence or purpose of unity. ISRA, under its mandate, is dedicated to promoting applied research in the area of Shariah and Islamic finance.
In November, ISRA, which was established in Kuala Lumpur some four years ago as a sister organization to INCEIF (the International Centre for Education in Islamic Finance), held its fourth annual International Shariah Scholars’ Conference on Islamic Finance (ISSC), which was officially opened by Sen. Mashitah Ibrahim, deputy minister in the Malaysian Prime Minister’s Department, who is herself a trained Shariah scholar. Shariah scholars from all over the world led by Abd Al-Salam Dawud Al-Abadi, secretary general of the International Islamic Fiqh Academy, which is based in Makkah, participated in the event which is conducted entirely in Arabic.
One GCC scholar who wished to remain anonymous stressed that the ISSC has the potential to become the Shariah authority of last resort for the global Islamic finance industry, because it is administered by ISRA, a well-established and well-funded professional organization. At the same time both ISRA and ISSC are located in a country whose government is fully supportive of Islamic finance and where there is transparency and open debate about Shariah matters relating to Fiqh Al-Muamalat (Islamic law relating to financial transactions) — a situation that you do not necessarily have in most Muslim countries for various reasons.
The ISSC is an annual event jointly organized by ISRA and the Islamic Research & Training Institute (IRTI), a member of the Jeddah-based Islamic Development Bank (IDB) Group, in collaboration with the Department of Fiqh and Usul-al-Fiqh at the International Islamic University of Malaysia (IIUM) in Kuala Lumpur.
Indeed, the growing importance of ISRA in research relating to Shariah and Islamic finance is further reflected by the cooperation the academy is forging with institutions and counterparties especially in Asia, Europe and the GCC countries. At the ISSC ‘09, ISRA signed three memorandums of understanding (MoUs) with Affin Islamic Bank, IRTI and Kuwait Finance House Malaysia (Kuwait Finance House Malaysia).
With Affin Islamic Bank, ISRA agreed “to promote cooperation in Islamic finance on the basis of equality and mutual benefit.” One area of cooperation is specific collaboration particularly with regards to research on alternative financing concepts to the Al-Inah and Al-Dayn (sale of debt) concepts. Products based on the two concepts are largely practiced in Malaysia and are not approved by Shariah scholars in GCC countries, Pakistan and Bangladesh.
With IRTI, signed by Laldin and Sami Al-Suwailem, deputy director of IRTI, the two entities agreed to “promote mutual and joint cooperation in Islamic finance on the basis of equality and mutual benefit.” More specifically, both parties have agreed to collaborate on a joint research program relating to topics in Fiqh Al-Muamalat.
Perhaps the most significant agreement is between ISRA and KFH-Malaysia and was signed by Laldin and Professor Mohammad Abdul Razaq Al-Tabtabae, chairman of the Shariah Committee at KFH-Malaysia. Under the agreement, ISRA would translate into English all the Shariah resolutions from the Fatwa and Shariah Supervisory Board meetings of Kuwait Finance House held from its inception in 1977 up to 2009. The translation on completion will then be reviewed and endorsed by a committee consisting of Shariah scholars as well as business practitioners before being released for distribution to customers, regulators, academics and other relevant institutions. The original Arabic version has already been distributed to the above parties in Kuwait and the Middle East.
“This joint project with KFH-Malaysia provides us with the perfect tool to effectively share developments in Islamic finance over the years and enhance understanding of the Shariah among the Ummah. This massive translation project creates a need for more specialists and inspires us to increase our effort to identify and source for even more talents in Islamic finance,” stressed Laldin, who is also a member of the Bank Negara Malaysia National Shariah Council.
Al-Tabtabae explained that this is the first time Shariah resolutions in Arabic issued by a foreign Islamic bank are being translated into English in Malaysia. “As the leader in Islamic finance and the first foreign Islamic bank in the country, KFH-Malaysia is committed to create ongoing awareness on Shariah-based banking practices. At present, there is a limited source of reference in English available on Islamic financial cases, arising issues and rulings. We are honored to take this initiative with ISRA to reproduce the Shariah resolutions and disseminate the specific Shariah knowledge related to banking and finance to the public,” he added. The translation project is fully funded by KFH-Malaysia and is expected to be completed within one to two years.
ISRA’s outreach manifests itself in different ways. In October 2009, during a road show by the Malaysia International Islamic Finance (MIFC) initiative in Bahrain and Qatar in which ISRA participated, Nazrin Shah, financial ambassador of the MIFC, and crown prince of Perak announced that ISRA would be giving two research scholarships each to Qatari and Bahraini researchers to study at ISRA in Kuala Lumpur from 2010. Indeed ISRA together with INCEIF are important cogs in the MIFC initiative’s agenda for fostering education and Shariah research in Islamic finance based on international best practice.
