Roll out genuine Syariah financial products, please
BANDAR SERI BEGAWAN
BEWARE Islamic banking products peddled by some banks in the region that have been questioned by Islamic scholars and businessmen on whether they truly comply with Syariah.
Thus warned Islamic banking and finance expert Dr Abdulazeem Abozaid who discussed, among others, "controversial" banking products that are labelled as Islamic during a seminar on Islamic financing and investment contracts at University Brunei Darussalam yesterday.
Such products are "considered quite controversial ... (in that) they are not different from conventional financing, where they just use certain technicalities to legalise what is prohibited, so we want to offer the alternatives, which are Syariah-compliant products that comply with the Syariah Islamiah to replace the products with controversial products," said Associate Professor Dr Abdulazeem Abozaid, who was the course facilitator at the seminary.
Dr Abdulazeem has conducted workshops and training courses in many Islamic banks, financial institutions and universities in countries like Syria, Malaysia, Singapore and the United Arab Emirates. He recently joined Emirates Islamic Bank as a consultant and Syariah trainer. He is also on the Syariah Board of RHB Islamic Malaysia and the Syariah consultant for Five Pillars Associates in Singapore.
The objective for conducting the workshop is to teach people about the essentials of the products and also for them to replace the controversial financial instruments.
"The market now demands the real Syariah products because the people and the public are now more aware than before. Before, they used to take it but now, they start questioning them on whether they are actual, genuine Syariah products or not because of the criticism they have received from different parts of the world from Syariah scholars."
He said that this will force bankers to change.
"If they want to compete in the market then they have to offer real Syariah products, especially if you want to attract businesses from other parts of the world like the Middle East."
He added that bankers from the Middle East are reluctant to deal with most of the Malaysian banks because the banks are not offering real Syariah-compliant products, and this has led to the phasing out of some of the products and replacing them with the genuine Syariah products.
Some of the types of Islamic financing and investment products and characteristics that Dr Abdulazeem Abozaid delved deeper into during his seminar was Al-Murabaha, Al-Bay Bithamin Ajil (Deferred Payment Sale), Al-Salam Contract, Al-Istisna' Contract, Al-Ijara Contract, Al-Musharakah, Al-Mudarabah and so on.
"These products are already popular, but they might not be popular in this part of the world. They have been in practice in the Gulf for a very long time," he said.
Asked about the time needed to make the change, Dr Abozaid said that "it will take some time".
"It took centuries to convert from conventional banking to Islamic banking, and I think it will take some time for the controversial Islamic products to be replaced with the real Syariah-compliant products," he said.
The seminar was attended by close to 40 participants consisting of financing students, bank officials, Syariah and commercial lawyers, and members from the financial sector of Brunei.
The Brunei Times