I have heard a lot about the different interpretations of the various principles of Sharia.
The Sharia boards of different Islamic banks in the Gulf differ on how a certain financial or investment transaction should be carried out. Sometimes a transaction approved by a certain Islamic financial institution may not be acceptable to the Sharia Board members of another institution, unless it is amended to accommodate their views and recommendations.
It is said that having a difference of opinion is healthy, but it seems to leave a bad taste in the case of Islamic financial institutions.
While the sympathisers of Islamic finance wish there were no differences among the ranks of scholars at the helm of this silent financial revolution, the critics of this rapidly spreading financial system take every opportunity to demonstrate the vulnerability of the system. This is in contrast to the well-entrenched interest-based conventional financial system, where the standards are treated almost as unwritten laws.
One of the arguments against carrying out an Islamic transaction is the length of time taken by the Islamic financial institutions in getting a transaction cleared from their respective Sharia boards, especially when it relates to complex syndicated financing, split between Islamic and conventional transactions.
Why are there differences of opinion among the Sharia boards of different Islamic financial institutions, and what is being done to address them?
Most readers may be aware that the main and undisputed sources of guidance in Islam are the Holy Quran and Sunnah (sayings and life of the Prophet Mohammad, peace be upon him, considered to be the reflection of the Holy Quran by Muslims).
While most aspects relating to finance have been clearly spelt out in both the above sacred sources — leaving little room to differ — such as inheritance, sale and purchase transactions, partnerships and Zakat, there are guidelines embedded in the verses of the Holy Quran and the teachings of the Prophet Mohammad (PBUH) that need to be further explored by Islamic scholars and jurists.
The wisdom behind this is to stimulate the human mind to discover the hidden treasures of the Quran and Sunnah.
There are many aspects in the Quran relating to finance that were not widely practised and hence not clearly understood by Muslims in the past. One such example is leasing, which is commonly used today, but was almost non-existent in the early days of Islam.
Coming back to the differences between various the Sharia scholars today, let us try to understand the rationale behind them.
There are four schools of thought (called Madhabs) in the predominantly practised Sunni sect of Islam. These are Hanafi, Shafai, Maliki and Hanbli. These are the aliases of the four great imams (leaders) in Islamic Fiqh (Islamic jurisprudence).
What is a Madhhab?
Simply speaking, a Madhhab is a precise methodology developed by one of the above imams that its followers (scholars) adopt to derive Islamic rulings, as and when needed.
It is important to understand that each Madhhab differs only slightly in its methodology. This causes them to have different rulings in some cases, although the differences are usually on minor and secondary issues and all four agree on the basic belief guidelines of Islam, including on the majority of their rulings.
These Madhhabs do not constitute separate sects, denominations or groups within Sunni Islam. It is possible that in some cases the scholars within a particular Madhhab can have different opinions as well.
Sohail Zubairi is vice-president, Sharia structuring, documentation and product development, Dubai Islamic Bank
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