Muhammad Iqbal, general manager and CFO for Saudi Arabia's Alinma Bank, has proposed a supreme Shari'ah board for the financial industry in order to spur the local Sukuk market.
Iqbal, speaking to The Islamic Globe at a conference in Riyadh, Saudi Arabia last week suggested that a body like the Saudi Arabian Monetary Agency (SAMA) would be perfectly placed to establish a board as sole authority for all Saudi banks. This could be based on the precedent set by Bank Negara which set up Malaysia's National Shari'ah Advisory Council in 2009.
Jarmo Kotilaine, chief economist of Saudi Arabia's National Commercial Bank, was also attending the conference and added that the Saudi Sukuk market was: "Purely commercial and highly uneven... [and] dominated by [the] occasional very large issue."
He added: "The Malaysian precedent highlights the role of government institutions, which have helped make Malaysia a leading Sukuk market globally."
However, Kotilaine did say it will not be that easy to replicate the Malaysian model, because: "market fragmentation in KSA is a persistent challenge and a source of opacity and inefficiency."
© The Islamic Globe 2011
