Part 4 of 5: Fiqh or Fiction — Addressing Common Questions 
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Part 4 of 5: Fiqh or Fiction — Addressing Common Questions

Click here to see Part 1 of 5: Fiqh or Fiction — The Need for Standardized Training

Click here to see Part 2 of 5: Fiqh or Fiction — What Does Standardized and Accredited Training Mean in Islamic Finance?

Click here to see Part 3 of 5: Fiqh or Fiction — Standardized AAOIFI Based Training Promotes Shariah Harmonization

Addressing Common Questions

Shifting training certification away from conventional academic and professional bodies to Islamic finance scholars requires a paradigm shift in our collective thinking. Common questions and comments, and how to address them, include the following:

Why follow a single standard when scholars cannot agree among themselves, and each bank has its own Shariah board? Does AAOIFI have an answer for everything?

Standards should be specific enough to be of technical benefit to the practitioner, and general enough to be of practical benefit to the broader audience in a variety of situations. Most Islamic finance scholars already acknowledge that AAOIFI is the leading standard-setting body in the industry.

Differences in opinion between qualified scholars is a part of Islamic finance, indeed a part of Islam. But the operative word here is “qualified,” and difference of opinion between laypersons is part of the problem.

Shariah harmonization in training has the immediate effect of getting all the stakeholders in the industry moving in one direction. The laborious work of ijtihad then returns to those qualified to adjudicate on the matter, far from the din of confusion now plaguing the lay audience. It is impossible for AAOIFI to anticipate every possible question on every possible matter. Operationalizing rulings is the work of the banks’ Shariah advisors. However, for purposes of training, which is more general in nature, AAOIFI provides sufficient depth.

Aren't academic and professional bodies necessary to ensure high standards?

Pedagogical standards and Islamic finance standards are related but separate issues. Ideally, the industry’s aim should be to deliver high pedagogical standards along with scholar-approved certification. Academic bodies serve an important role here. But this role must be treated as secondary to the more important matter of standardizing Shariah compliance. Mediocre learning that leads to a 100% scholar-standardized examination is far better for the industry than the best guidebook, trainer, or online course that is anything less than 100% Shariah standardized. Of course, it would be best if training institutes delivered both 100% standardization with the best pedagogical standards possible.

Banks use scholars because bankers execute the products themselves in the marketplace. But students do not need scholar-approved certification because they are just trying to get a job and require only general knowledge of Islamic finance, not detailed knowledge of standards. Correct?

Islamic banking students are future Islamic banking professionals. The same care that is taken by scholars working inside banks to ensure that products are Shariah-compliant must also be taken to ensure that training is Shariah-compliant. Newcomers to Islamic finance, even those who are still students, need standardized knowledge more than ever precisely because of their limited exposure to practical application.

Who determines which individuals are considered Islamic scholars? Why do we need scholars when anyone who memorizes AAOIFI rulings can give certifications?

It is not merely a matter of memorizing AAOIFI’s rulings and parroting them to a captive audience. An individual must possess the ability to join between contemporary rulings and the classical texts in order to help bankers better navigate the uncharted waters not yet faced; new and detailed matters which necessarily give rise to new ijtihad.

The standards for scholarship vary by institution, but generally a student of Islamic Sacred Law reaches the rank of scholar through a system of prolonged study in the classical Islamic sciences, throughout receiving ijazas, or formal authorization to transmit a particular subject, from qualified individuals and institutions.

This is followed by a period of apprenticeship under scholars who are already qualified to issue fatwas, where at the culmination of as few as six years and as many as sixteen years of Shariah and general study one hopes to attain sufficient competence to reach the level of a scholar.

To give an idea of the specialness of such individuals and the loftiness of their rank, at the beginning of Islam and at the end of the Prophet’s life (Allah bless him and give him peace), when there were estimated to be as many as one hundred thousand companions, only as few as seven individuals were at the level of scholarship to be able to perform ijtihad and issue fatwa independently. Today, the jurisprudence of these several individuals personally taught by the Prophet (Allah bless him and give him peace) have been distilled into the four traditional madhhabs, or schools of jurisprudence, by verifiable contiguous chains of transmission resulting in the schools well known to students of Sacred Law: the Hanafi, Shafi’i, Maliki, and Hanbali schools.

There is not a classical scholar after the early Muslims except that he followed one of these schools: Bukhari, Muslim, Nawawi, Suyuti, and Subki, to name but a few, each of whom had memorized over 100,000 hadiths, sometimes as many as several hundred thousand, with their individual chains of transmission and each chains relative authenticity committed to memory. In order to put this feat into perspective, consider that a nine volume Sahih Bukhari contains just over 7,000 hadith.

All this is relevant to understanding the importance of upholding scholarship in the present age where opinions are bandied about with little regard for jurisprudential authority. The Prophet himself (Allah bless him and give him peace), the gentlest of mankind, responded to the ignorance of loose opinion in the strongest terms in a hadith that should give any thinking individual reason for pause:

We went on a journey, and a stone struck one of us and opened a gash in his head. When he later had a wet-dream in his sleep, he then asked his companions, “Do you find any dispensation for me to perform dry ablution (tayammum)?” [Meaning instead of a full purificatory bath (ghusl).] They told him, “We don’t find any dispensation for you if you can use water.” So he performed the purificatory bath and his wound opened and he died. When we came to the Prophet (Allah bless him and give him peace), he was told of this and he said: “They have killed him, may Allah kill them. Why did they not ask?—for they didn’t know. The only cure for someone who does not know what to say is to ask.” (Abu Dawud)

How can we rely on a single fatwa? That is just one scholar’s opinion.

Reliance on a single fatwa is not being suggested - quite the opposite. The industry should rely on the opinions of many scholars - through their acceptance of already agreed upon standards. The purpose of the single fatwa is to assure users of a particular training program that these agreed upon standards are actually being followed. Think of the commercial pilot: he makes the final decisions, but his decisions are based upon an already agreed upon standard recognized by the mainstream aviation industry. Islamic finance training standards, on the other hand, abide by no such standard and are still very much up in the air.

What about Islamic scholars who disagree with AAOIFI scholars?

The Prophet (Allah bless him and give him peace) said “The hand of Allah is over the jama’ah” (Tirmidhi) where the word jama’ah refers to the overwhelming majority of the Muslim collectivity, and in the context of ijtihad, the overwhelming majority of those qualified to independently derive rulings.

But where, one wonders, does difference of opinion come in when the opinion of an overwhelming majority prevails? The answer is that within the overwhelming majority, there is legal deference given to those permitted to make ijtihad, so that while one’s own position is considered correct and the opposing position is considered incorrect, one accepts the possibility that one’s own position might be incorrect and the opposing position might be correct. Within this framework of tolerance scholars accept valid difference of opinion.

For instance, scholars accept that Islamic finance practiced correctly is, in and of itself, legally valid; however, there is difference of opinion as to which products are valid and which ones are not. It is the task of AAOIFI, the world’s largest collectivity of Islamic finance scholars, to organize these rulings and their application and determine validity here. If a divergent opinion is extreme to the extent that it does not accord with any mainstream collectivity (e.g. saying that commercial interest is permissible), whether this collectivity is in the majority or not, it is simply ignored.

The above is a necessary digression in order to understand the following: for scholars who disagree with an aspect of Islamic finance, the constructive response is to formally approach with one’s disagreement the largest collectivity of those scholars who possess industry-specific knowledge and practical, day-to-day execution experience in Islamic finance. For this reason, each Shariah standard in AAOIFI is followed by an explanatory appendix describing the evidentiary bases for arriving at the rulings.

Scholar-approved certification is only necessary for those who actually engage in product development and need to study Islamic finance in-depth for that purpose.

From the customer-facing relationship manager who answers client questions all the way up to the boardroom executive who rarely sees the inside of a single product structuring exercise, everyone who works inside an Islamic bank should understand Islamic finance principles. At the bank, training is not about fiqh and fatwas, it is about product knowledge, and every individual working inside an Islamic bank needs some level of product knowledge, if nothing else, to understand how Islamic finance is different from - and better than - conventional finance.

AAOIFI is just a standard-setting body. How can they certify so many training programs?

AAOIFI does not certify training programs besides their own face-to-face programs as of this writing. It is the work of the scholars familiar with AAOIFI who are hired by training institutes to check that material conforms to their standards.

What about the Malaysian standard in Islamic finance? How is it different from AAOIFI?

The Malaysian standard in Islamic finance is accepted in few countries - Thailand and Indonesia are two that come to mind - of the more than 90% of the industry that is heading towards common AAOIFI convergence. In an exclusive interview with Ethica a few years ago, we had the privilege to speak with Malaysia’s former Prime Minister, Dr. Mahathir Mohammad, who expressed his country’s willingness to use products based on the buyback and debt trading structures in order to galvanize their then fledgling industry. However, because Bay al Inah and Bay al Dain are not acceptable to AAOIFI, it may be one of the reasons that there has not been much liquidity flowing from AAOIFI-based markets to Malaysian-based markets.

Click here to see Part 1 of 5: Fiqh or Fiction — The Need for Standardized Training

Click here to see Part 2 of 5: Fiqh or Fiction — What Does Standardized and Accredited Training Mean in Islamic Finance?

Click here to see Part 3 of 5: Fiqh or Fiction — Standardized AAOIFI Based Training Promotes Shariah Harmonization

Part 5 of 5: Fiqh or Fiction — Next Steps

Approved by Ethica’s Shariah Board. For the original article with footnotes, visit

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