Tarek El Diwany, adviser for London-based Zest Advisory LLP, said getting Islamic finance to become more mainstream needs a significant change to take place in the industry.
He said: "It requires a paradigm shift. We have a conventional system that is firmly routed in usury.
"It cannot be changed overnight as there are too many people making too much money. The industry really has not tried to break this mould and offer something genuinely different, partly because of regulatory limitations and partly because of existing vested interests."
Mr El Diwany was speaking in response to points raised at the World Islamic Banking Conference in Bahrain.
During the three-day event at the Gulf Hotel in Manama, delegates heard of the challenges facing the proliferation of Islamic finance products.
Shebab Marzban, product development officer for Egypt-based Ideal Ratings, instigated the discussion when he warned that many Western fund managers fail to carry out correct due diligence on Islamic finance products.
He said: "There is a lack of awareness on what is truly a Sharia-complaint product. Many funds have got a stamp on them that they comply with the principles from a Sharia body, but then they do not follow through with the correct screening.
"The problem is that most fund managers will outsource due diligence to index providers and they rely on that information to be correct and up to date. The problem comes when you look on a firm's financial sheets and it may say they invest in food, but will not necessarily say pork."
Source : http://www.ftadviser.com/FinancialAdviser/Investments/News/article/20101202/c875806c-f7d8-11df-8003-00144f2af8e8/Islamic-IFA-calls-for-overhaul-of-UK-banks.jsp - Dec 2, 2010
He said: "It requires a paradigm shift. We have a conventional system that is firmly routed in usury.
"It cannot be changed overnight as there are too many people making too much money. The industry really has not tried to break this mould and offer something genuinely different, partly because of regulatory limitations and partly because of existing vested interests."
Mr El Diwany was speaking in response to points raised at the World Islamic Banking Conference in Bahrain.
During the three-day event at the Gulf Hotel in Manama, delegates heard of the challenges facing the proliferation of Islamic finance products.
Shebab Marzban, product development officer for Egypt-based Ideal Ratings, instigated the discussion when he warned that many Western fund managers fail to carry out correct due diligence on Islamic finance products.
He said: "There is a lack of awareness on what is truly a Sharia-complaint product. Many funds have got a stamp on them that they comply with the principles from a Sharia body, but then they do not follow through with the correct screening.
"The problem is that most fund managers will outsource due diligence to index providers and they rely on that information to be correct and up to date. The problem comes when you look on a firm's financial sheets and it may say they invest in food, but will not necessarily say pork."
Source : http://www.ftadviser.com/FinancialAdviser/Investments/News/article/20101202/c875806c-f7d8-11df-8003-00144f2af8e8/Islamic-IFA-calls-for-overhaul-of-UK-banks.jsp - Dec 2, 2010
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