DUBAI: Minhaj Shariah Financial Advisory, a Dubai-based Shariah consultancy and the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOFI) has launched a set of 11 new Shariah standards that will help regional and global Islamic FIs tackle contemporary issues of banking, finance and investment. The new Islamic norms have been conceived in the wake of the challenges faced by the Islamic FIs in the current times and paves the way for them to sort out a variety of issues in the light of Islamic jurisprudence. Sheikh Dr. Abdul Sattar Abu Ghuddah, Minhaj chairman, said: “The new Shariah standards will have great positive impact on the growth of the Islamic financial industry. Moreover, the launch of these standards is also a salient indication of the constant evolution of Islamic banking and finance with contemporary focus, particularly in the aftermath of the global financial crisis.” He said that the 11 new standards stipulate Shariah-compliant ways to sort out issues arising from uncertainty (gharar) in financial transactions and arbitration, endowments (waqf), labor leasing (ijarah), zakah, contingent obligations, credit facilities, online financial transactions, pledge (rahn), investment accounts and profit distribution, and Islamic reinsurance. “These laws also have brought in greater harmonization to the Sharia'h principles which will help further the growth of the Islamic banking and finance,” Dr. Abdul Sattar said. Khairul Nizam, AAOIFI assistant general secretary, said: “Despite the economic meltdown, the Islamic finance and banking sector has shown considerable resilience and has kept a pace of growth. This is because we have been able to adapt to the economic changes and innovate on Shariah principles to the benefit of the Islamic society and economy across the world. The new standards are launched in this perspective.” He said over 90 percent of the Islamic banks around the world go by the AAOFI standards. “The new standards will contribute to the growth and evolution of Islamic financial industry which now has Shariah-compliant assets estimated at $1.275 trillion. The industry is growing at an average annual rate of 15-20 percent and the positive trend will continue despite economic fluctuations thanks to the in-built prudence in Shariah principles,” Nizam added. Dr. Mohammed Amin Qattan, Shariah advisor, Minhaj, said: “The new standards addresses crucial issues of complexity seen in contemporary Islamic banking and finance, particularly in the financial services sector, including issues like debt restructuring and arbitration cases - which has risen in the wake of the financial uncertainty. What is of significance is that all these issues of a contemporary nature can be addressed by laws of Islamic jurisprudence and that in itself is a great leap forward.”
