| CIMA launches Certificate in Islamic Finance |
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| Written by John Willsdon, CIMA | |
| Thursday, 06 December 2007 | |
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The Chartered Institute of Management Accountants (CIMA) is the first chartered accountancy body to launch a global qualification in Islamic Finance.
It has made the move in order to meet the growing demand from the worldwide business community to develop the knowledge and skills required to service this increasingly important market. Despite the rapid growth experienced in this emerging area, most companies and individuals have minimal exposure to and understanding of its unique and profound nature. To date, most of the qualifications available on this subject are short 1 – 3 day courses. Roughly a quarter of the world’s population is Muslim and the majority of the world’s oil revenues are generated by countries with a Muslim majority. Today, this niche within the worldwide financial sector is estimated to have a global worth of between £150bn and £250bn and a current and sustainable annual growth rate of 15 per cent to 20 per cent. Islamic finance is a truly global product with financial centres such as London, New York, Singapore, Kuala Lumpur and Hong Kong all vying to be the Islamic finance capital of the World. Compliant with Shari'ah law Governments have also demonstrated their commitment to offering Islamic finance a level playing field against conventional financial products and services, by amending laws to remove, for instance, double stamp duty which would otherwise result from the Islamic form of house mortgages. Islamic finance has developed from a requirement by Muslims to find a way of conducting financial activities in a manner which is compliant with Shari’ah law. Two key components of conventional finance are the giving and receiving of interest as payment for money borrowed and deposited and the existence of uncertainty. The conventional banking industry depends on the former and the conventional insurance industry depends on the latter. Both of these components are prohibited under Islamic belief. For those Muslims wishing to invest their savings in company shares, there is the additional issue that not all trading activities are acceptable under Shari’ah law. For example investments in companies that trade in pork or pork products, alcohol, arms or armaments, entertainment or gambling are all unacceptable from the point of view of Islamic belief. Social and ethical issues There was little impetus to drive the need for change until the Middle East oil boom. Islamic financial institutions did exist, but were small in size and geographically limited in nature. The discovery of oil and the ever increasing revenues generated by this resource in Muslim dominated countries across the world. Particularly in the Middle East, however, along with a call by Islamic religious leader for stricter adherence to religious beliefs, it has resulted in the creation of sufficient wealth in the hands of Muslims and determination to ensure that this area of finance flourishes. In addition, an increasing number of non-Muslims are also attracted to the social and ethical issues that underpin Islamic finance. Working closely with the International Institute of Islamic Finance Inc (IIIF) and respected global advisors CIMA has developed a qualification that will help meet the need to increase the talent pool of Islamic finance staff. It will also aid finance directors across the world in the recruitment, retention and development of key staff. The Certificate has been designed to cover all of the major topics relevant to this sector of finance. All materials included in the Certificate have been subject to the scrutiny of a global advisory panel comprising Shari’ah scholars, academics and practitioners in the areas covered within each module. Dedicated website CIMA said it believed that the Certificate in Islamic Finance will give staff the key skills in areas including Shari’ah compliance and in the complexities of the contracts that underpin this compliance. They will also develop confidence in using the terminology, and applying the knowledge, which sets Islamic finance apart from other aspects of conventional finance. The Islamic Finance package includes four study guides providing all the material required for undertaking the qualification, access to a dedicated website with extra information and support, electronic assessment for examination around the world and two sittings of each examination assessment. The four study modules cover Islamic commercial law, Islamic banking and Takaful, Islamic capital markets and instruments, and Accounting for Islamic financial institutions. Related articles Related links |
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