AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Abdel-Maoula Chaar

Rethinking the strategic reach of Sharia boards

Abdel-Maoula Chaar

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Overview of the presentation

Sharia Supervisory boards as guardian of Sharia compliancy

Reputation and Sharia boards efficiency

The strategic reach of Sharia boards

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Case Study: Lebanese Banks

BANK TYPE YEAR

Al Baraka – Lebanon Fully Fledged 1979

Lebanese Islamic Bank Subsidiary 2005

BLOM Development Subsidiary 2005

Arab Finance House Fully Fledged 2006

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Sharia Boards primary task

Ensuring the Sharia compliency of the operations

Suggesting Sharia compliant solutions to the bank

Reducing the liability of newness by giving legitimacy to the banks

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Assessing the scolars’ proficiency

Measuring the technical efficiency of the financial operations

Evaluating the soundness of the fatawas

Using the reputation as proxy

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Evaluating reputation

Incapacity to assess the proficiency of scholars

Perceived reputation linked to pointers

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Evaluating reputation

Scholar

Clients

Bank1REPUTATION

ATTRACKS

JOIN

recruitsBank2

JOIN

recruits

+

+

+

+

++

+

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

Islamic banking in Lebanon

Population: 4 million

Religious factions: 17

Number of muslims: 60% app.

Main Muslim sects: Sunni / Shi’a

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

SSB

Isla

mic

Ba

nk

Legitimacy in localSunni market

Sunni Scholar

Legitimacy in localShi’a market

Shi’a Scholar

International

Scholar

Legitimacy in international andinterbank markets

Islamic banking in Lebanon

AM Chaar – Oman 1st Islamic Finance & Banking Conference - Oman – January 2012

THANK YOU FOR YOUR ATTENTION