The halal and haram elements in banking
The basic roles of the Shari’ah Advisories are to advise on Shari’ah matters, issue fatwas and point to the halal and haram elements in banking and finance transactions.
Firstly, to ensure that product development uses the acceptable principles of the Shari’ah and follows acceptable Shari’ah standards, to meet the standards and the internationally developed standards. Currently the international bodies such as AAOIFI and the Islamic Financial Services Board (IFSB) or national bodies like the Shari’ah Advisory Council of central banks and other financial institutions.
Secondly, to ensure that the practitioners, for the purpose of its implementation, understand the decisions of the Shari’ah Boards as they are responsible for applying the decisions of the Shari’ah Boards.
Thirdly, Shari’ah advisories need to be competent to scrutinize the documents related to products and transactions
Fourth; Shari’ah advisories must have full knowledge of the purpose of the products and how it is operationalized.
Fifth; Shari’ah advisories must be able to assess the economic implications of the product they approve for their institution.
Sixth; strengthening the governance of Islamic financial institutions, as well as embedding Islamic values into the financial institutions’ business operations and governance.
Seventh; Central Shari’ah Council at the central banks, their role are not confined to an advisory one, Their role is to work closely with regulators, economists and financial experts for smooth implementation of Shari’ah decisions under their respective jurisdictions. They are also to work towards the harmonization of fatwas and the global development of Islamic finance; they must be competent and accountable for their decisions.
Eighth; Shari’ah advisories must demonstrate determination, alertness, commitment, seriousness and competency,
Ninth; Shariah advisories must not be mere rubber stamps but professionals who endorse a product after full inspection and satisfaction that the product is Shari’ah-compliant