Human Resource & Capacity Building in An Islamic Finance

Human Resource & Capacity Building
in an Islamic Finance
1.
• A recent Gallup poll indicates Muslim masses
in several Muslim countries would like to have
shari’ah rule in their society and state:
– In Jordan, 54% men and 55% women want
Shari’ah as the only source of legislation.
– In Egypt, 70% men and 62% women favor
shari’ah as the only source of legislation.
- John Esposito, Who Speaks for Islam: What a Billion Muslims Really Think,
New York, Gallup Press, 2007, p48
2.
• A phenomenal rise in Islamic Banking, Islamic
Investment, Takaful and Islamic Businesses in
the past four decades confirms a desire of the
people to go for halal and avoid haram in their
financial matters.
3.
• The collective conscience of the Muslim
Ummah, in the past fifteen centuries, never felt
comfortable with interest-based economy,
even in the so-called dar-ul-harb context.
4.
• The issue today is not viability of Islamic
businesses and finance. Even the hardcore
capitalist world has resorted to Islamic
windows in its conventional banking and
financial institutions.
5.
• The real problem is the workforce, or the
human capital, needed for shari’ah-compliant
management of business and finances of the
people.
• The human resource produced by the
conventional academic and capacity-building
programs cannot satisfy the demands and
challenges of the Islamic financial institutions.
6.
• We need highly-competent, motivated and
involved persons with required knowledge of
conventional banking and finance as well as
knowledge of Islamic shari’ah.
7.
• In a recent survey of over 60 banks in Karachi, 75%
of senior bankers needed qualified staff in Islamic
banking and finance, and 88% wanted their staff to be
trained. 92% considered the organization benefited
from training of their staff, while 90% indicated that
training enhanced their capacity. 66% of respondents
showed willingness to absorb candidates with MBA
in Islamic Finance and Banking in their organization.
- Survey conducted by Riphah Center of Islamic Business, July 2008.
8. What needs to be done?
1. A multi-dimensional and inter-disciplinary
human resource strategy is needed for the
education and training of the existing
conventional financial managers as well as
for the future leaders in this field. Continuing
education institutes with full academic
recognition are needed at national and
international level for proper professional
education and training of Islamic financial
managers and leaders.
2. In order to meet the modern challenges, institutional
framework such as a center for Islamic business and
finance appears indispensable. This center should address
academic as well as applied issues faced in day-to-day
transactions and dealings in Islamic business and finance.
3. The center should address issued such as:

– Why interest is prohibited in Islam
– What are current Islamic financial instruments (mudaraba,
musharaka, murabaha, ijarah, ijara-wa-iktina, qard hasan,
etc)
– What is takaful and how it differs from conventional insurance
– What is the role of shari’ah experts in Islamic financial
institutions
– Do existing resource of fiqh of all five major schools
of thought provide satisfactory response to modern
financial problems
– How to maximize efficiency and quality assurance in
Islamic financial institutions
– In what sense customer service is different in Islamic
financial institutions
– What should be the policy for HR recruitment,
retention, motivation, promotion, career planning and
change management
– How to develop global networking of Islamic financial
institutions
9. Basic Requisites for Islamic Managers
1. Working knowledge of Arabic needed for
understanding of the Qur’an, the sunnah and fiqh
literature.
2. Knowledge of ayat and ahadith that deal explicitly
and implicitly with financial matters
3. Knowledge of Islamic jurispudence, the methodology
of usul-al-fiqh and the objectives of shari’ah as well
as the qawaid-al-fiqhiyyah
4. Knowledge of fiqh al-Maal and al-Milkiyyah
(property and property rights)
5. Knowledge of fiqh al-Buyu’ (Islamic laws relating to
market and exchange)
6. Knowledge of application of shari’ah in financial
transactions with particular emphasis on Islamic contracts of
exchange as a method of financing, such as mudarabah
(agency, trust financing), musharaka (partnership, profit-
sharing), ijarah (leasing), bai’ murabaha bi saman ‘aajil
(markup leased trading with deferred payment), bai’ istisna’
(construction contract), bai’ salam (forward sale), etc.
7. Knowledge of comtemporary innovations in the use of sale
of contracts as tools for financing, such as sukook.
8. Skills needed for customer satisfaction
9. Knowledge of views of contemporary Muslim thinkers on
financial matters
10. Competence to conduct ijtihad in development of new
Islamic products
10. Conclusion
• The success of Islamic banks, financial institutions
and businesses is directly related with highly-
qualified business and finance managers with
communication skills, knowledge of shari’ah and
present-day international business and finance.
• This can be achieved through Islamic research and
training institutes of continuing education fully
accredited with recognized universities.
• It is an uphill but promising and rewarding enterprise,
no less than a gift to humanity.
• The existing workforce in Islamic business and
finance institutions must enhance its capacity through
short-term courses developed by various academic
institutes in a modular form. Similarly, fresh human
resource is to be developed as future leaders in
Islamic finance.
• Islamic financial institutions should consider pooling
their resources and networking for establishment of
state-of-the-art continuing education institutes in
Islamic banking and finance.
Wamatawfiqi illa bi Allah
Wa
Shukran
&
Thank You

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Human Resource & Capacity Building

3. The center should address issued such as:

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