IslamicFinance.de

Bankers in Islamic finance are increasingly outsourcing sharia supervision due to a lack of scholars in the industry, but critics say this is making the sector even less transparent and slowing its development.
Critics say growth and product innovation is being further stifled by the limited number of top scholars available to join the sharia boards of Islamic banks, some sitting on up to 80 boards.
Instead of maintaining their own costly sharia boards with prominent scholars, bankers are increasingly using consultancy firms that directly deal with the scholars.
During the boom years, scholars in the Gulf Arab region allowed investment firms to book large amounts of up front fees on the money they raised for property deals, violating the Islamic principle that risk and rewards should be shared.
Critics say sharia consultancy firms will not bring about any real sharia supervision. Currently, sharia boards only act as advisers and are not accountable for decisions as boards of directors would be.