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Tuesday, 8 May 2012

Good governance of Islamic funds urged at AAOIFI convention

Manama, May 7 (BNA) -- The two-day AAOIFI Annual Shari’a Conference which began today focuses on governance of the Islamic finance sector, one of the six pillars that those who set standards in the financial sector out to work on if Islamic finance should continue growth and achieve its full potential, said Rasheed M Al Maraj, Governor of the Central Bank of Bahrain.

Delivering the welcome address, the CBB governor said that the AAOIFI set up seven standards relating to governance and two relating to ethics.

 The deficiencies found in financial institutions’ governance has been repeatedly highlighted in the past five years -- following the commencement of the Global Financial Crisis in 2007, he added.

Of the three standards on governance, issued by AAOIFI, the first focuses on the Audit & Governance Committee.  The standard urges the audit committee to review the use of restricted investment accounts’ funds.

The standard emphasises the need to ensure that funds are invested in accordance with terms agreed with the customer.

  “Too often over the past five years we have seen how customers’ interests have been relegated to change focus to bonuses and share price. Neglecting customers is at the risk of losing them,” said the central bank chief.

Caring for the interests of customers is carried on in the AAOIFI Governance Principles paper issued in 2005.  In particular Principle 3 of this paper warns against inequitable treatment of fund providers, said Al Maraj.

The 2009 AAOIFI Corporate Social Responsibility paper also focuses on dealing responsibly with clients and ‘par excellence’ customer service.  If you couple the governance standards with the ethics paper for employees of financial institutions, you find a formidable set of requirements, principles and standards relating to putting the interests of customers first, he added.

The CBB, he said, is pushing ahead with the review of its corporate governance and business conduct rules, as also improving levels of disclosures, to raise the bar for corporate governance.

The CBB chief said that a review of the CBB corporate governance requirements has completed its first stage of internal review.

“Coupled with governance is Shari'a.  From the perspective of the CBB as a regulator, we have noted that all too often, the approach of banks, particularly conventional banks has been to start with a conventional transaction or product and then try to give it a finishing coat of Shari'a compliant paint. Financial institutions must not regard Shari'a compliance as the finishing touch to product development.  Instead, product development needs to start from Shari'a principles: i.e. Islamic financial institutions must become Shari'a driven,” urged Al Maraj.

The growth of Islamic finance hinges on addressing the interest of customers, governance and Shari'a compliance satisfactorily, he surmised.

(Bahrain News Agency / 07 May 2012)

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Imam Malik: The Founder of the Maliki School of Thought

Malik bin Anas, known as Imam Malik, is a prominent name in Islamic history. He was not only a great scholar of Hadith, but also a jurist after whom was founded one of the four Islamic schools of Islamic jurisprudence: the Maliki school.
He was 13 years younger to Imam Abu Hanifa and 103 years elder to Imam Bukhari. He compiled the first compendium of Hadith named Al-Muwatta. He was the most leading personality of his time in Madinah and was called Imam Darul Hijrah due to his remaining in Madinah the majority of his life.
He was born in Madinah to Anas ibn Malik and Aaliyah bint Shurayk Al-Azdiyya in 93 AH. His family was originally from the Al-Asbahi tribe of Yemen, but his great grandfather Abu 'Amir came to Madinah in 2 AH, embraced Islam and settled down there.
Born into a well-to-do family, Malik did not need to work for a living. He was highly attracted to the study of Islam, and ended up devoting his entire life to the study of Hadith and Fiqh.
Living in Madinah gave him access to some of the most learned minds of early Islam. He memorized the Holy Qur'an in his youth. He studied under various famous scholars like Hisham ibn Urwah, Ibn Shihab Al-Zuhri, Imam Abu Hanifa and Imam Jafar Al-Sadiq — one of the descendants of the Prophet (peace be upon him).
Malik lived with the immediate descendants and the followers of the Companions of the Prophet (pbuh). Imaam Zahabi said: "There remains no scholar in Madinah after the Tabi'een comparable to Imam Malik's knowledge, jurisprudence, eminence, and memorization." Thus, Imam Malik became the Imam of Madinah, and one of the most renowned scholars of Islam.
He learned Hadith from Abdur Rahman ibn Harmuz, Nafi ibn Zakwan and Yahya ibn Saeed.
Imam Malik said: "I did not start to give lecture in Fiqh and Hadith until I was declared eligible to do so by 70 teachers of Hadith and Fiqh."
Imam Malik believed that fatwa is a sensitive, precise and important action that can have far-reaching results, and was extremely careful about giving it to the extent that if he was not sure about a matter, he would not speak about it.
While narrating Hadith, he used to wear elegant and expensive clothing, usually wearing white and frequently changing them.
Imam Malik had great love and respect for Madinah. He remained in Hijaz throughout his life and never traveled outside. He went for Haj only once while fearing that he might die outside Madinah and be deprived of its blessings. Even when he attained old age and became very weak, he never rode on any mount in Madinah. He felt that it was against respect to ride on the very land where the Prophet (pbuh) is buried.
Imam Malik compiled Al-Muwatta in forty years. It is the first legal work to incorporate and join Hadith and Fiqh together and was received with wide praise. Imam Bukhari said that the soundest of all chains called the 'Golden Chain of Narrators' of Hadith transmission was "Malik, from Nafi, from Ibn Umar."
Imam Malik's teachings were not essentially different from those of Imam Abu Hanifa. His main sources were primarily the Holy Qur'an, and then the Hadith of the Prophet (pbuh) of which he preferred those which had been collected and narrated by the scholars of Hadith of Madinah. Next, he would refer to Ijma' (consensus), and then Ta'amul i.e. customs of the people of Madinah such as practices of the Sahabah that represent the true spirit of Islam. Lastly, he relied on 'Qiyas' (analogy) and 'Istislah' (public interest).
It is reported that Imam Malik wrote 100,000 Hadiths by his hand. Imam Malik said: "I showed my book to 70 scholars of Madinah and every single one of them approved it, so I named it 'Muwatta' (The Approved One)."
It is the first Hadith work arranged into juristic sections and organized accordingly.
According to some of the great scholars of the past, Imam Malik was widely regarded as the scholar of Madinah. The Prophet (pbuh) had said: "Soon people will beat the flanks of camels seeking knowledge, and they shall not find a single person more knowledgeable than the erudite scholar of Madinah
. (Jami Al-Tirmidhi).
Imam Malik was held high in the eyes of other great scholars, such as, Imam Abu Hanifah, who said, "My eyes have never fallen on anyone faster in understanding, correct in answering, and examining as Imam Malik."
Imam Ahmed bin Hanbal said, "I have compared Imam Malik to Awza'i, Hammaad, Aal-Hakim, Thawri, Laith, in knowledge, but he is the leader in Hadith and Fiqh."
The number of Imam Malik's students was in the thousands. Qazi Iyadh has mentioned that over 1300 narrated Hadith for the great Imam.
Some of the most famous teachers whom he studied with were: Mohammed bin Shihaab Al-Zuhree; Ja'far ibn Mohammed Al-Sadiq; Nafi' ibn Sarjis Al-Daylami; Mohammed ibn Munkadir and Ayyoub Al-Sakhtiyani.
Imam Malik protected the Shariah and courageously upheld it. When the governor of Madinah demanded and forced people to take oath of allegiance to Khalifah Al-Mansour Abbasi, Imam Malik issued a fatwa that such an oath was not binding because it was given under coercion. He based this opinion on the Hadith: "The divorce of the coerced does not take effect." He gave unbiased decisions and never bowed to political authorities. He supported Muhammad Zakia Alawi by issuing a Fatwa against the Abbasid Caliph Mansoor, for which he was arrested and was publicly flogged seventy times by Ja'far, the brother of Caliph Mansoor. When Mansoor heard about this, he asked Imam Malik to visit Iraq and to forgive him for the incident. Later, Imam Malik forgave him because of the Caliph's relationship with the Prophet (pbuh).
Once Caliph Haroon Rasheed invited him to his court to read his Muwatta but he declined to go and politely advised that "my regards to the Caliph, knowledge should be visited and not that it should visit the people". Later the Caliph, with his sons, came to his mosque and attended the discourse like others.
The Imam died at the age of 86. He was buried in the famous cemetery of Madinah, Jannatul-Baqee, near his tutor Nafi' Maula Ibn Umar (R.A.). He had left behind three sons, Yayha, Muhammad and Hammad.
May Almighty Allah reward him for his great services to the Ummah Islamiah.
(Arab News.Com / 07 May 2012)

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