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SHARIAH BOARD
Overview
Introduction IIFB
IIFB Members
Shariah Certification

 
Sharia Board
 
Need-Gap Analysis

Islam makes ‘Lawful Earning’ (Halal) mandatory, and in Islam, the spiritual and secular aspects are one. This implies that Islam emphasizes the need to make a living by means that are permissible under the Shariah Laws. The conventional system of Investment and Finance that is prevalent in our society doesnot take into account this very important rule of Lawful Earning and offers a host of products and services that are not Shariah compliant. Particularly in India, there is hardly any product or service that can claim to be fully Shariah compliant that attract the Muslim community which has lagged behind in the field of finance and economics. We believe that Islam guides its adherent in every sphere of our lives, and yet there is no comprehensive system that educates us about the ‘Shariah way of dealing’. This is the need gap that Maulana Mohammad Wali Rahmani addresses by way of this Shariah board (the IIFB) He was immensely moved by the current pathetic situation of the conventional financial system and felt there is a strong need for a governing body that informs, educates and guides the Muslim community about Islamic finance and that is how the idea of creating an Islamic Investment and Finance Board was born.


The Evolution of the Board

Thus, under the astute guidance and leadership of Maulana Mohd Wali Rahmani, a national Islamic Finance Board was formed for the first time in India. The Islamic Investment Finance Board (IIFB) has been established with an object to create an Independent and a Premier Shariah Board for the welfare of the Muslims.


The Board is entrusted with the duty to
  • Give the rulings, advise, guide and certify Islamic Investment and Finance products, in accordance with Islamic Jurisprudence and rules of Shariah known as Fiqh-al-Muamalat (Islamic Rules on Transactions), and
  • To direct, review and supervise the activities related to Islamic Investment and Finance and ensure their strict Shariah Compliance
Roles and Responsibilities of the IIFB

The primary responsibility of the IIFB is to ensure that all the Islamic investments made are Shariah compliant. The aim is to provide an Alternate Financial System that is free from interest, ethically sound and socially responsible that would benefit the nation and the mankind as whole. The Board in its purview of certification will have Islamic Investment, Finance and Banking. The board upon going through the Shariah validity of financial products presented by a financial corporation would certify the financial products after a thorough examination according to the Shariah compliance criteria. The IIFB Board shall have continuous dialogue with economists and bankers to assess the feasibility of new proposals and assist in project development and execution of new financial products in compliance with Shariah Principles. IIFB also will also ensure that the work of an organization is compatible with Shariah rules according to the accredited and agreed legal opinions (Fatwa). The Board is further empowered with the right of contradicting (Fatwa) any violating procedures, if found.


Members of IIFB

There are several forms of supervisory oversight in Islam: God’s oversight over His creations; self-control by a person; a person’s supervision of another person; and the accountability system in general. Within this broad framework of oversight, the Islamic financial Investments have adopted a rigorous system of self regulation in the form of Islamic Investment & Finance Board (IIFB) supervision.


The board is an independent and non-profit institute that is created by the trustees of Rahmani Foundation and shall be managed, governed and controlled by them under the adept leadership of Maulana Mohd. Wali Rahmani. At present IIFB comprises of nine members, some of them being extremely prominent Ulama such as Maulana Khalid Saifullah Rahmani, General Secretary of Islamic Fiqh Academy- India, Maulana Fuzail ur Rahaman Hilal Usmani, Maulana Fazlur Rahim Mujazzedi- Jaipur Mufti Shoibullah Khan- Bangalore, Mufti Ejaz Arshad Qasmi, Mufti Ahmad Nadir Al-Qasmi, Mufti Mohd Yahya Qasmi, Mufti Anwarul Haque Qasmi, Mufti Riaz Ahmad Rahmani, and Market Expert Imtiaz Merchant other experts. If the Chairman of the Board deems fit may further appoint more members.


How IIFB Would Function?

Islamic Investment & Finance Board (IIFB) have appointed Mumbai based Pragmatic Wealth Management Pvt. Ltd (PWM) to do a deep and comprehensive research on Islamic Financial Products presented to them by financial institution for review. PWM will prepare a white paper (Report) and submit to the board, based on which the Board will form an opinion on the matters concerning Islamic Finance. To carry out research, supervision and monitoring Mr. Imtiaz Merchant, Managing Director, PWM has formed a committee and it consists of well qualified and trained muftis & experts with knowledge of Islamic jurisprudence and good command over English language. This Shariah committee will work under the complete supervision and guidance of the IIFB and would rigorously follow the Shariah Principles. The role of this board will be purely supervisory and the final authority will rest with the IIFB on all the matters relating to certification. Currently, the Shariah committee of PWM consists of muftis from various schools of thought like Mufti Mohammed Yahya Qasmi, Mufti Anwarul Haque Qasmi, Mufti Ayzaz Qasmi, and market analyst Mr. Imtiaz Merchant. The Shariah committee will look into the dealing of compliant companies and perform due diligence on financial matters and products and then present the relevant facts to the IIFB in form of a report. Post review, the IIFB would then either certify or may reject certification on the report. The Shariah committee would also develop Islamic financial products and present it before the IIFB for certification.


Once a financial product or a service is certified as Shariah Compliant, it is then open to being presented before the investor community and can be marketed.


Objectives of IIFB
  1. Facilitate and ensure the operation of free and fair markets in the Islamic Financial Sector.
  2. Ensure Shariah Compliance and effectiveness of corporate governance.
  3. Promote the development of standardized products through research and innovation
  4. Comply with international prudential accounting and auditing standards applicable to Islamic Financial Services.
  5. Foster coordination and cooperation among countries that offer Islamic Financial products.
  6. Take initiatives to integrate and strengthen domestic Islamic Financial Institutions and International Financial Systems.
  7. To scrutinize and audit the financial products and issue Shariah Compliance Certificates to the companies.
  8. To initiate establishment of Shariah Standards on financial matters
  9. To organize seminars and conferences in order to educate the people about the importance of Halal investments and its social and economic benefits.
  10. To assist institutions in the development and execution of new Shariah compliant products.

Duties of IIFB

The IIFB comprising of prominent scholars would counsel the Islamic financial institutions. They would provide Shariah rulings on their products and services. The IIFB would also advise on the procedure for rectification of any error and purification of any gains which may be earned by Islamic financial institutions. The IIFB resolution would be binding on Islamic financial institutions in respect of the product proposed and also during operational process. The IIFB board would provide continued supervision and checking of contracts, transactions and procedures that are carried out by the Islamic financial institutions. It would also audit their operations to ensure the actual practice and procedure complies with the requirements stipulated by the board. Amongst its most important duties would be to certify the products put forth by the Islamic financial institutions. It would undertake periodical checks to ensure that the institutions donot violate the laws of Shariah at any given time of their operations. The board would also engage in healthy and constructive dialogues with economists and bankers to assess the feasibility of new proposals. It will also be involved in project development and execution of new financial products and ensure that they adhere to Shariah principles.


The IIFB would submit a complete annual report summarizing all the issues referred to the Board, as well as its opinion on the transactional procedures.

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