BNM announces issuance of Syariah parameter reference 1

KUALA LUMPUR, Aug 28 (Bernama) -- Bank Negara Malaysia announced today the issuance of the Syariah Parameter Reference 1 or Murabahah Parameter (SPR1) to all Islamic financial institutions under its purview.
SPR1 is the first in a series of Syariah parameters to be issued as guidance and reference to all Islamic financial institutions, the central bank said in a statement.
Other Syariah parameters currently being developed are Ijarah, Mudarabah, Musharakah, Istisna' and Wadiah, it said.
The SPR1 has been endorsed by Bank Negara's Syariah Advisory Council and marks a key advancement in the bank's efforts to promote greater harmonisation in the development of the Islamic finance industry.
The Syariah parameters initiative aims to define the essential features of Islamic financial products and services based on the underlying Syariah contracts that are endorsed by the Syariah boards and adopted by Islamic financial institutions, Bank Negara said.
The issuance of Syariah parameters as standard documents will facilitate comprehensive understanding of the principles and the basis for adopting Syariah contracts, it said.
The parameters also aim to clarify the concepts, principles and conditions of Syariah contracts, and to provide focus on the features of the Syariah contracts that form the basis of Islamic financial products and services.
Other objectives include to provide the basis for decisions on matters relating to conditions, mechanisms and the implementation of Syariah contracts, to facilitate Islamic finance professionals and practitioners in the design and development of Islamic financial products and services, and to facilitate the formulation of policies and guidelines on contracts adopted by Islamic financial services industry.
Bank Negara said the SPR1 will serve as an important reference document, particularly for Islamic financial institutions, Syariah advisors, academia, researchers, students and members of the public who have interest in Islamic finance.
The SPR1 outlines the main Syariah requirements in the contracts and provides examples, methods and models for practical application of the contract, it said.
In addition, the SPR1 will contribute to further harmonisation in the interpretation and application of Syariah views and opinions, especially among Syariah committee members, the bank said.
In this regard, the Syariah parameter document provides an important reference for Syariah committee members to arrive at Syariah decisions pertaining to Islamic financial transactions, products and services, it said.
To ensure the robustness of the Syariah Parameter Reference 1, Bank Negara has conducted extensive research and compiled various fatwas as well as views of several local and international Syariah boards.
The concept paper was presented to its Syariah Advisory Council and subsequently circulated to the industry, academia, international bodies and other relevant stakeholders for feedback and comments, it said. -- BERNAMAAny source