Abdul Rasheed Ghaffour: Roundtable Meeting of Centralised
Shariah Advisory Authorities in Islamic Finance
Welcoming remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of
Malaysia (Bank Negara Malaysia), at the Roundtable Meeting of Centralised Shariah Advisory
Authorities in Islamic Finance, Kuala Lumpur, 2 October 2018.
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It is an honour for me to be here today at the inaugural Roundtable Meeting of Centralised
Shariah Advisory Authorities in Islamic Finance. On behalf of Bank Negara Malaysia, I would like
to welcome the esteemed Shariah scholars and delegates who are gathered here this morning
to share their experiences and exchange perspectives. We are at a time where our economies
and financial systems are more connected. We are seeing greater cross-border trade and
services, and mobility in capital. Technological advancements are shaping the way businesses
operate and influencing dynamism in customer behaviours. This gathering today therefore is an
important first step - towards strengthening relations and connectivity among the scholars and
regulators who share common goals - that Shariah principles are embraced not only in form but
more importantly in substance, - and that Islamic finance consistently delivers positive impact to
the broader economy and society.
The global Islamic finance industry has seen remarkable progress over the last decade. Global
Islamic banking assets have doubled over the last 10 years and Islamic financial services are
now available in more than 48 countries. In fact, in a number of jurisdictions such as Bahrain,
Brunei Darussalam, Maldives, Nigeria and Malaysia, Islamic finance is increasingly becoming an
important component of the broader financial system. In essence, Islamic finance is impacting
the lives of many - individuals and business alike. All these progress would not have been
possible without the dedication of Shariah scholars such as yourselves in harnessing collective
wisdom to resolve many practical and contemporary issues facing the Islamic finance industry.
From enabling deposit taking to facilitating funding, investments and protection solutions -
Shariah has been the underpinning thrust of Islamic financial intermediation in meeting the
evolving expectations of businesses and consumers.
My remarks today will focus on three imperatives for Shariah scholars to be the beacon for
financial, social and economic developments.
Engagement with wider stakeholders
First, the world we live in is not static. It is important to understand that issues confronting the
global economy and our modern society are intricately linked to the issues facing the financial
sector. This therefore demands for Shariah rulings to constantly be contextualised towards
addressing contemporary issues facing the ummah. From ending poverty and hunger to
promoting responsible production and consumption; providing affordable housing; better
healthcare and education - Shariah deliberations on Islamic finance matters should reflect on the
evolving needs of the economy and society.
Shariah scholars are constantly challenged to have a thorough and sound understanding of other
fields of expertise such as economics, law, psychology and technology to formulate well-rounded
and pragmatic ijtihad. With Shariah scholars at the forefront of multi-disciplinary knowledge, the
Shariah fraternity can play a more prominent role in the global call for action for the financial
sector to better respond to the contemporary challenges facing our world today. Closer
engagement with wider stakeholders, be it the financial industry, regulatory authorities, central
banks and the public sector, has never been more pressing than before. It is the way forward. It
is the way to ensure that the Islamic finance industry continues to be able to deliver on the
intended objectives of Shariah.
Transparency of Shariah rule-making
My second point relates to the importance of transparency of Shariah reasoning and credibility of
Shariah rulings. This will encourage a deeper understanding of Shariah requirements and
outcomes beyond a compliance mindset. Pronouncing a clear and comprehensive hukum is
certainly not easy; Shariah deliberations would need to be anchored to a comprehensive and
robust decision making approach that captures holistic considerations including legal, risk,
accounting, operations and also stakeholder implications.
It is equally important that Shariah rulings are well-understood by everyone. This calls for an
effective communication strategy to advocate the intended outcomes of each rulings and the
underlying reasons for each decisions. Platform such as this gathering - offers all of us the
opportunity to learn and exchange views from each other's experiences. Best practices in
Shariah methodology and governance can be shared and deliberated to elevate the quality of
rulings and stature of Shariah advisory authorities globally.
Connectivity among centralised Shariah advisory authorities
The final point is on increasing connectivity among centralised Shariah advisory authorities to
promote mutual respect and knowledge-sharing. Islam has flourished with a strong foundation of
knowledge, wisdom and tolerance among its scholars. Differences in ideas and open discourses
to assess the veracity of knowledge - have always been practiced in many Islamic societies.
While achieving consensus is ideal - full appreciation of differences in circumstances and
considerations is equally important and necessary.
I have observed over the years that the implementation of Islamic finance varies from one
jurisdiction to another. Rightly so, this reflects the different stages of development and diversity in
local customs, market conventions and cultural norms. I believe through frequent and
constructive dialogue, Shariah boards and advisory authorities will become more appreciative of
the many differences in business and economic environment - that lead to different Shariah
interpretations. Concerted efforts to cultivate greater understanding of the variations in fiqh
interpretations and approaches to Islamic finance development are positive steps towards
harmonisation that can deliver certainty of Shariah implementation in the global Islamic financial
system.
This roundtable meeting organised today is just a starting point of a long journey. It is my hope
that this meeting offers a productive networking opportunity for all of us to identify common
issues; explore mutually beneficial opportunities; and implement positive changes in our financial
systems. It is not too far-fetched - to envisage the generation of breakthrough thinking for future
research collaboration that is solution-driven; practical; and innovative in future meetings of this
forum.
Ibnu Taymiyyah once said: "Surely among the main thrusts in a religion is the union of hearts, the
unison of views and easing of disputes conducted in good way." I implore all of us to begin
today's dialogue with an open mind and candid sharing of experiences that can benefit us all. It is
through collaboration and cooperation that the intended values and impact of Islamic finance can
be realised for the betterment of the ummah. On that note, I wish you a productive and engaging
discussion.