A leading Islamic finance expert has called for the creation of a Sharia-compliant dispute resolution mechanism at the global level with participation from all countries active in Islamic finance.

According to Malaysia-based Islamic finance scholar Dr Akram Laldin, key challenges for the industry include copying of conventional products without due consideration to Sharia and restructuring products or transactions without ensuring compliance, said a report in the Gulf Daily News (GDN), our sister publication.

Dr Laldin was speaking at a Sharia scholar session organised by The Waqf Fund, a Bahrain-based special fund to support Islamic finance training, education and research.

The topic under discussion was 'The Challenges of Achieving Sharia Compliance in Islamic Finance'.

As Sharia is the backbone of Islamic finance, non-compliance poses a huge risk to the industry, he said.

He said that while all the stakeholders have to play their respective roles, Sharia scholars have the biggest responsibility to ensure compliance in all aspects of the financial institution.

Calling on Sharia scholars to be proactive in developing themselves through continuous training, Dr Laldin said they needed to be well-versed not just in Sharia but also other areas such as economics, finance, banking, accounting, law, etc.

This is in order to be able to give a religious verdict after full knowledge and understanding of the matter, he added.

Praising the first generation of scholars for their role in starting and shaping the industry, he said they should work on preparing the second and third generation of scholars in order to ensure that the industry continues to progress.

Waqf Fund chairman Khalid Hamad said Bahrain has always demonstrated openness and co-operation in Islamic finance with other jurisdictions and such co-operative spirit is critical for the industry to keep its growth momentum.

Hamad emphasised the importance of learning from leading Sharia scholars and urged the participants to attend sessions regularly.

Internal Sharia reviewers and auditors from Bahrain-based Islamic financial institutions attended the session, which was held at the Central Bank of Bahrain's head office.

Dr Laldin serves on several Sharia boards including Bank Negara Malaysia's Sharia advisory council, Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions and a number of Islamic financial institutions in Malaysia and around the world. - TradeArabia News Service