Once seen as an obscure arm of banking, the Islamic finance sector has registered phenomenal growth in recent years.
As secretary general of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), the voice of Sharia compliant regulation, Dr Mohamed Nedal Alchaar is poised to be a key influence on this widening market.
Globally the financial crisis has drawn Islamic finance into the mainstream as Western institutions attempt to tap into deposits from the Islamic world by courting Islamic financial firms, which remain relatively unscathed by the subprime mortgage crisis.
And as the sector grows, the rulings of the AAOIFI and its Sharia board will have even more weight. The AAOIFI will directly impact the future of Islamic finance practices worldwide, ensuring that institutions remain within the tenets of Islamic law, and distinct from the world of conventional banking. Dr Alchaar’s role will be a central one.
The organisation has not been without its controversies — in 2007 it made headlines when it declared that about 85 percent of sukuk issued globally were not Sharia compliant because of repurchase agreements. The news rocked the industry and led to a sharp decline in sukuk issuance — a sign of AAOIFI’s influence.
Nevertheless, the profile of Islamic finance will continue to rise as it opens a new gateway of liquidity — and Alchaar holds the key.
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