The International Sharīʻah Research Academy for Islamic Finance (ISRA) has organised the 10th Muzakarah Cendekiawan Shari’ah Nusantara (the Regional Shari’ah Scholar Dialogue) in early June in Kuala Lumpur, Malaysia.
Themed Towards Strengthening Islamic Finance: Issues and Solutions, the muzakarah aimed to provide a platform for sharīʻah scholars from Southeast Asia to deliberate on key aspects of Islamic financing and refinancing. Over 210 delegates from six countries, including sharīʻah scholars, academicians, market players and regulators, attended.
Professor Mohamad Akram Laldin, the Executive Director of ISRA, stressed in his opening address that sharīʻah is the backbone of the industry, and said it is important to follow the broader principles of sharīʻah to devise instruments for refinancing for consumers.
The muzakarah arrived at the resolution that three methodologies - maturity extension, haircut* and renewal of ijarah contract by increasing the amount of rental - can be used for rescheduling and restructuring. Other methodologies require further study, however.
*According to the International Capital Market Association, a haircut is the difference between the market value of an asset and the purchase price paid at the start of a repurchase agreement (repo).