
Trading in goods or instruments representing their ownership and leasing of assets can be used for financing, in addition to partnership based modes, and the IBFIs are required to observe essential features of such modes of business and finance. However, IFIs’ portfolios practically comprise the structured products and instruments innovated to replicate the conventional products. Hence, many IFIs are investing in a variety of financial derivatives using the concepts of (netting-off) by invoking the simple principles. With developments in the conventional derivatives market, work is in progress for more structured Islamic derivatives such as structured FX options and commodity derivatives that would be without observing the salam based conditions that, of course, validate forward trading in goods other than monetary units. Financial derivatives almost never involve delivery by the parties as they reverse the transaction and settle the price difference only (Jobst, 2008), and this is against the spirit of the Sharia’s.
A very gloomy impact of the above developments is that even some renowned peers of Islamic economics have started rethinking about redefining ribā not to include any of modern day investment and hedging instruments. For example, M. Akram Khan (2016) says in this regard:
“We have now landed at a sad state of affairs. Islamic financial institutions (IFIs) are competing with each other to claim similarity with conventional financial institutions and in devising ever new tricks. They are now effectively in the business of defeating the very objective which was the justification for their existence. We think it is time they come out of this hypocrisy and do some innovative thinking (ijtihād) about the definition of ribā.”
It’s a point to consider, however, that if ‘bills discounting’ and ‘foreign exchange transactions of all types’ are not included in ribā, then what is ribā as prohibited by the Sharia’s? With all respect to the learned scholar, we would differ and contend that a clearer stance could be suggesting closure of Islamic banks and permitting all conventional finance transactions. But, ground reality is that majority of Muslims are not ready to accept such kind of ‘ijtihādi’ pronouncement all arguments for which have already been sufficiently rebutted. The jurists and Sharia’s scholars who are leading the Islamic finance industry may take up this issue seriously, to bring reforms to the evolving system.
In some markets, where AAOIFI’s Sharia’s standards are considered as guidelines for products’ development, and in case of many institutions across the globe, financial derivatives are not used by the IFIs; and Pakistan is one such market. However, some grey area structured products are used even in such markets and this requires more careful governance by the regulators. To discuss issues relating to governance in such markets, we have selected Pakistan as a case study.
Required Role of the Jurists / Sharia’s Advisors-According to the instructions of SBP, the burden whether a product passes Sharia’s compliance test, rests on the shoulders of IBIs’ Sharia’s Boards. Sharia’s scholars have been assigned the Divine responsibility of ensuring a Sharia’s compliant, trustworthy and robust system that could be helpful in enhancing financial and social inclusion and provide necessary support for sustainable growth and development of the economies and the societies. They need to perform this duty as a trust and without any conflict of interests while ensuring that each and every transaction conforms to the principles of Sharia’s, and that justice is done with all stakeholders particularly the general account holders.
Measures for Regulatory Improvements-The prime factors behind the problems as indicated above are non-availability of any single basis for products’ approval and decision making, and SBP’s inability to properly govern the skills and role of RSBMs and Sharia’s Boards. Below, we recommend some steps to be taken instantly:
- a) Basis for Sharia’s Decision Making and Products Approval: There has to be one basis for products approval and decision making. AAOIFI’s Sharia’s Standards may be made mandatory; Further, SBP may enforce an SOP and a “Code of Conduct – Ethics and Principles for approval of Structured Products”;
- b) Products Approval Process: Products suggested by IBIs Sharia’s Departments may be analyzed thoroughly by the Sharia’s Research Unit of the IBD (SBP) to ensure that nothing is against AAOIFI’s Standards; and then submitted to the SBP’s Sharia’s Boards for approval keeping in view implications of products for stakeholders and objectives of Islamic banking; IBIs may then be advised not to use any structured product unless approved expressly by the SBP’s Sharī‘ahBoard .
- c) Till the whole system is Islamized (as discussed in JIBM’s Editorial of December 2015 Issue), primary and secondary market for sovereign should be opened for IBIs only, excluding conventional banks. This step will also help in curbing the clean and collateralized lending by IBIs to conventional banks in contravention of the AAOIFI’s Sharia’s Standard No. 30 on tawarruq.
- d) Sharia’s Advisory System in Banks: Having a Sharia’s Board in all IBIs may not be mandatory as it has caused unnecessary costs to the IBIs without any visible benefit. One Sharia’s Advisor could be sufficient serving full time to facilitate the banks in day-to-day business as per standardized products approved through process as in (b) above. Banks may, however, be allowed, as prior to 2015, to constitute their own Sharia’s Boards at their discretion. The members of such Sharia’s Boards might be paid the honorarium, if any, for the meetings attended or work accomplished, and not any regular pay.
Some others steps need to be taken in short/ medium / long run practically, the ability of the Sharia’s boards /advisors to fulfill their mandate is constrained by the time given for the banks affairs, their understanding about finance and access to monitoring systems, complexity of the products and transactions, and effectiveness of their independence. State Bank may maintain a panel of ‘SBP Certified Islamic Finance Scholars’ for Islamic banks and finance institutions. Its training arm, NIBAF, may design and arrange an advance level rigorous training course on Islamic fiqh, economics, accounting, banking and finance for Sharī‘ah scholars having sufficient knowledge of Islamic law of contracts, banking, finance and accounting, followed by a comprehensive written Exam.
Aparatos de balanceo: clave para el desempeño fluido y efectivo de las dispositivos.
En el entorno de la tecnología actual, donde la productividad y la seguridad del aparato son de suma trascendencia, los sistemas de equilibrado tienen un función fundamental. Estos aparatos específicos están desarrollados para calibrar y asegurar componentes rotativas, ya sea en dispositivos industrial, transportes de transporte o incluso en electrodomésticos caseros.
Para los especialistas en mantenimiento de equipos y los ingenieros, trabajar con sistemas de ajuste es crucial para garantizar el funcionamiento suave y fiable de cualquier aparato rotativo. Gracias a estas alternativas innovadoras modernas, es posible limitar sustancialmente las vibraciones, el ruido y la presión sobre los sujeciones, mejorando la tiempo de servicio de elementos importantes.
También trascendental es el tarea que tienen los aparatos de equilibrado en la atención al usuario. El ayuda especializado y el soporte constante empleando estos aparatos permiten dar prestaciones de óptima calidad, incrementando la contento de los clientes.
Para los propietarios de negocios, la contribución en unidades de calibración y dispositivos puede ser importante para optimizar la efectividad y desempeño de sus sistemas. Esto es sobre todo relevante para los emprendedores que dirigen pequeñas y medianas negocios, donde cada detalle vale.
Asimismo, los dispositivos de balanceo tienen una extensa utilización en el campo de la prevención y el control de excelencia. Posibilitan detectar probables fallos, impidiendo arreglos costosas y averías a los equipos. Además, los indicadores generados de estos equipos pueden utilizarse para perfeccionar procedimientos y incrementar la visibilidad en buscadores de búsqueda.
Las áreas de implementación de los sistemas de balanceo incluyen múltiples áreas, desde la producción de ciclos hasta el monitoreo del medio ambiente. No afecta si se habla de enormes manufacturas productivas o pequeños espacios caseros, los aparatos de ajuste son esenciales para proteger un funcionamiento productivo y sin riesgo de detenciones.
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