Tom Young
IFLR Asia reporter
"I realized how ethical Islamic finance was when an email I sent to a scholar received a positive reply with his bank details on," commented one lawyer during IFLR's April Capital Markets Forum. And he's not the only one worrying. Islamic finance may be attracting every major bank and institutional investor, but the industry is facing challenges.
Disagreements exist between Gulf states authorities and Malaysian regulators; institutions continue to flood into the market; and a shortage of both respected scholars and capable counsel are testing the resilience of an industry in danger of outgrowing itself.
The deals are often segmented among regional markets, and although a few countries have defined parameters for what counts as Islamic finance, most financial institutions continue to rely on their boards of shariah scholars to determine whether individual transactions comply with Islamic law.
For now, this makes it difficult to structure...