There is a lot of talk to ad­vance eth­i­cal Is­lamic fi­nance, but where do shared val­ues start and end?

New Straits Times - - News -

CO­OP­ER­A­TION and trust-build­ing are the core of so­cio-eco­nomic progress in any so­ci­ety, and shar­ing-based fi­nan­cial con­tracts con­trib­ute to pro­mote these fea­tures.

Whether the gamut of new al­ter­na­tives in the shar­ing econ­omy, in­clud­ing fin­tech, crowd­fund­ing and P2P (peer-to-peer) lend­ing pan out to be sys­tem­i­cally suc­cess­ful in the medium term, and how they main­tain ef­fec­tively their sus­tain­abil­ity and rel­e­vance by cre­at­ing shared val­ues through risk-shar­ing, only time will tell.

In fact, “Cre­at­ing Shared Val­ues Through Risk Shar­ing” was the theme of the 8th Se­cu­ri­ties Com­mis­sion Malaysia (SC)/Ox­ford Cen­tre for Is­lamic Stud­ies (OCIS) Round­table, which was held last week­end at Ditch­ley Park, Ox­ford.

Sul­tan of Perak Sul­tan Nazrin Muiz­zud­din Shah, who is also the royal pa­tron for Malaysia’s Is­lamic Fi­nance Ini­tia­tive, de­liv­ered the key­note ad­dress in the pres­ence of SC chair­man Tan Sri Ran­jit Ajit Singh and del­e­gates from across the world.

In the Is­lamic fi­nance space, by its very na­ture, eth­i­cal val­ues and their prop­a­ga­tion through ex­am­ple, and the rel­e­vant prod­ucts and risk-shar­ing are in­trin­sic.

Af­ter all, one of the com­mon so­bri­quets of Is­lamic fi­nance is profit-and-loss-shar­ing (PLS) bank­ing. Is­lamic fi­nan­cial in­sti­tu­tions, how­ever, stand ac­cused of “de­lib­er­ately and sys­tem­at­i­cally avoid­ing PLS modes of fi­nanc­ing”.

Un­der­pin­ning this is the ageold de­bate of whether Is­lamic fi­nance is more to do with eq­uity fi­nance, which is con­sid­ered to be more eq­ui­table in wealth dis­tri­bu­tion through both risk and profit shar­ing, or debt fi­nance.

The round­table or­gan­is­ers em­pha­sised

TUES­DAY, MARCH 28, 2017

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