Venture Into New Frontiers Of Islamic Banking And Finance, Says Sultan Nazrin

KUALA LUMPUR, April 26 (Bernama) -- Sultan Nazrin Shah of Perak said Tuesday the way forward for Malaysia, after having established a solid reputation for Islamic banking and finance, is to venture into new frontiers and establish more meaningful footprints globally. He said some players had already made inroads into other jurisdictions and they deserved commendation but the road to internationalisation was neither easy nor straightforward. "Those who aspire to embark on the same path will need to be armed with ingenuity, industriousness, foresight and diligence, apart from classical knowledge of Islamic jurisprudence as well as the technical workings of banking and finance," he said in a keynote address at the International Conference on Islamic Banking and Finance Law here. At the event, Sultan Nazrin Shah also launched "I Will Never Beg", the memoirs of former Chief Justice Abdul Hamid Mohamed. He said several factors had to be taken into account before the objective of venturing into new frontiers in the four corners of the earth could be achieved. Malaysia had to exercise flexibility and adaptability given the unfamiliar turf and terrain while efforts must be made to bridge the wide cultural, legal, economic, social and religious gaps, he said. "Since competition can be fierce, there is therefore the incessant need to be versatile and develop our own competitive advantage. "Prudence and expediency would dictate that serious efforts should be made to forge cooperation and even partnerships with peer organisations in the corresponding jurisdictions," he said. Sultan Nazrin Shah said it was imperative to have an up-to-date grasp of contemporary banking practices and an understanding of how to adapt, improve and improvise so as to develop new Shariah-compliant products and services, with a willingness to boldly go across boundaries, to reinvent and to innovate beyond the typical offerings. "I would think that the less trodden paths of Islamic financial transactions such as equity-based contracts, micro-financing, crowdfunding and socially-responsible investment instruments, among others, warrant deeper exploration," he said. On new and innovative products, he said problems might arise when it came to trying to fit them into the Shariah context, and difficult reconciliations sometimes need to be made between classical 'fiqh' (deep understanding) and modern applications. Meanwhile, Sultan Nazrin Shah urged the various stakeholders to ensure the authenticity of the Shariah tradition in Islamic banking and finance industry is not undermined. He noted that the Muslim Consumers Association of Malaysia recently expressed the view that the industry did not practise what it preached. Grievances have also been aired by Islamic scholars, asserting that although some products and services may be deemed valid from a legal standpoint, their practices, however, have become similar to conventional banking. Sultan Nazrin Shah said he believed that such views could serve as a powerful check and balance on the industry's conduct as stakeholders in the industry. "As we support the continued commercial success and growth of this noble industry, we need to also ensure that the authenticity of the Shariah tradition is not diluted or even undermined. "There is thus a role for engagement and discourse amongst Shariah advisors, judges, the legal fraternity and practitioners to ensure that the true and noble essence of Islamic finance is at all times upheld," he said. -- BERNAMA