$cholars for Dollar$

Posted: June 27, 2013 in Islamic Finance
Tags: , , ,

Many Muslims would be happy to view a signed piece of paper by people who have the title Sheikh, Mufti, and the like, along with the logo of an interest based lender as certification of a financial fatwa. This gives them piece of mind concerning how permissible a particular product is, allowing them to purchase it.

One must look deeper into the practises of these so called gate-keepers, and how these fatwas come about. In a similar vein to credit rating agencies in the aftermath of the financial crises in 2008, who earn fees from the institutions which  use their ratings as a show of credit worthiness, there seems to be an issue with impartiality and a conflict of interest, not to mention validity – for who has the authority to issue a fatwa incumbent upon all Muslims.

Please read this article from Bloomberg Magazine, from 2007, showing the monetary incentives for such specialised scholarly talent. This helps create a lucrative market for the few who have the deemed knowledge and reputation to issue these edicts, not to mention incentivising more people to go into this particular field, all contributing to the industrialisation of ‘Islamic Finance’

$haria $cholars

We need scholars with intellect – for Daw’ah, not for Dollar$

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Comments
  1. Maryam says:

    Thank you for starting this interesting blog. It always good to know more about the gaps in the subject of interest. Unfortunatelly, very few research/blogs discuss this in Islamic finance. I persume that this is mainly because the industry is still in it’s infancy and it’s exposure is limited.

    Going back to the article of Bloomberg Magazine from 2007 you mentioned above, could you please share a web link.

    Thanks
    Maryam

    • ribanomics says:

      Thanks for your comment

      The article can be found by clicking on the word ‘$cholars’ at the bottom of the post

      I would say that the reason for not having enough critism being aired about this subject is more due to the commercial interests of the biggest institutions in the industry. Money talks, and they have plenty of money. However critics have been seen on all mainstream media, but understandably there is more noise being made about the growth of the industry rather than its failings, therefore they have been drowned out.

      I would also recommend Tarek El Diwaney’s website ‘Islamic-Finance’ for much more insightful analysis from an insider expert, found in the Blog Roll.

      The industry is not really in its infancey, it was started approximately in the 1970’s and in very much in a growth phase, perhaps steadily maturing.

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