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Shariah-compliant or Shariah-based? Yes, that old chestnut...

The debate whether there should be a move from Shariah-compliant to Shariah-based products has renewed vigour. Bryan Camoens of International Quality and Productivity Centre asked the question following an interview he conducted with Mohammed Shodiq, academic head for Bank Rakyat Indonesia Bank Rakyat Indonesia or PT. Bank Rakyat Indonesia (Persero) (BRI), (tr. People's Bank of Indonesia), is one of the larger banks in Indonesia. It specialises in small scale and microfinance style borrowing from and lending to its approximately 30 million retail clients through its  Syariah, who said Shariah-compliant products are based on "mirroring conventional products with the elimination of prohibited items", with compliance criteria based on aqad assessment, whereas Shariah-based products are based on "both aqad assessment and objectives of Shariah assessment."

The argument is that banks' Islamic products are simply Shariah compliant-conventional products in Islamic wrappers tweaked to not violate Shariah rulings instead of new products that hold true to the teachings of the Quran and Hadith hadith (hädēth`), a tradition or the collection of the traditions of Muhammad, the Prophet of Islam, including his sayings and deeds, and his tacit approval of what was said or done in his presence. . These are Shariah-based products-those that seek to observe the real spirit of Shariah and observe Shariah principles in substance.

Copyright Islamic Banking  Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics.  & Finance. All rights reserved.

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Publication:Islamic Banking & Finance
Date:Feb 20, 2011
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