Senior scholars in Islamic finance are exploring ways to prevent legal disputes that have roiled the industry, with new rules aiming to clarify responsibilities, while others raise the prospect of penalties for their peers, Reuters reported. The discussions are part of the annual sharia conference of the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), one of the industry’s top standard-setting bodies. Sharia scholars are considered the gatekeepers of Islamic finance, vetting products and services to ensure they comply with religious principles such as bans on interest and gambling. However, their profession is under scrutiny after a series of disputes surrounding Islamic bonds, or sukuk. These disputes could dent the growth prospects of the sukuk market, as potential issuers could shy away from their perceived legal complexity in favor of conventional debt.
