muhammad bin ibrahim : shariah issues and malaysia ’ s islamic financial sector speech by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the “ muzakarah cendekiawan syariah nusantara ke - 9 ”, jakarta, 10 june 2015. * * * i would like to express my gratitude to allah almighty for his grace that the 9th regional shari ’ ah scholar dialogue could be held here in the city of jakarta. this is the second time the dialogue is held in jakarta since 2009. i would like to congratulate the organizers ; universitas islam negeri syarif hidayatullah ( uin ) jakarta and the international shariah research academy for islamic finance or isra for their initiatives in organising this dialogue. this dialogue was initiated in 2006 by bank negara malaysia and subsequently led by isra. our sole intention has always been to promote mutual understanding and close collaboration among islamic scholars in this region on issues relating to fiqh muamalat and islamic finance. through this platform, the vision is to generate new ideas and views among scholars in an atmosphere of tolerance and mutual respect, irrespective of our different cultures, economic and political structures. today, i would like to share my views on the following three areas : i. strengthening the role of shariah scholars ; ii. fostering the dynamism of ijtihad in a contemporary setting ; and iii. cultivating the spirit of mutual respect within the diversity of shariah interpretations. strengthening the role of shariah scholars the islamic financial landscape today has undergone various transformations and progress over the last 10 years. this transformation can be testified in the increase of global banking assets that had reached nearly usd1. 5 trillion, total outstanding sukuk amounting to usd295 billion, islamic fund assets amounting to usd76 billion as well as the takaful contributions of usd21 billion ( source : ifsb : 1h 2014 ). in addition, there has been a marked increase in the participation from non - muslim jurisdictions in islamic finance, particularly in sukuk issuances, reflecting the increasingly positive reception of islamic finance among the global community. the sukuk instrument, in particular, is among the most innovative instruments and favoured by governments and multinational corporations. in response to these developments, the role of and the expectation on shariah scholars will be more challenging in

finding solutions to emerging new shariah issues that require immediate responses from the shariah fraternity. to me, changes in the islamic financial landscape should be viewed as a golden opportunity for the shariah experts to demonstrate the dynamism of the islamic religion as perpetually modern and evolving through time. therefore, it is my hope that the role of the shariah scholars could be further enhanced and not confined solely to only ensuring and monitoring the shariah compliance aspects. in relation to this, i am also of the opinion that researches and thorough deliberations on shariah need to consider other fields of disciplines in order for the ijtihad ( reasoning ) or shariah decisions to be comprehensive, inclusive and practical. this will become increasingly important when it involves strategies and positioning of the “ ummah ” in the economic sector. shariah assessments that include input and findings of multiple disciplines as well as variations of insights will provide more added values to a particular shariah research. this effort can be implemented through active involvement of professionals in the bis central bankers ’ speeches process of researching shariah issues. i am confident that through this approach, we will be able to formulate a collective ijtihad that is comprehensive, in comparison to ijtihad that is peripheral and exclusive. in the malaysian context, we have decided to encourage the combined expertise and experience between shariah members and professionals through the shariah committees of islamic financial institutions. in fact, we also encourage qualified shariah scholars to be appointed as members of board of directors at islamic financial institutions, specifically to form a “ bridge ” or point of connection between the board and the shariah committee members, and to allow them to gain greater exposure to the operational situation in the management of islamic financial institutions. the process of knowledge sharing and discussions on shariah as well as on other realms of islamic knowledge among the board members of a particular financial institution will enrich the justifications of a particular deliberation before a decision is made. another key aspect is the importance of shariah scholars to thoroughly understand the impact of ijtihad on the growth of the islamic finance industry and society at large. every ijtihad should always be geared towards fostering harmony and not widening the differential gaps. if a gap exists even in the matter of perception, it may raise doubt and reduce the effectiveness of a shariah decision. in this context, the majority of the