There are hundreds of courses in Islamic banking, finance and takaful available at all levels, from non-certified trainings (like the Islamic Finance Access Programme developed by Edbiz Consulting) to PhD programmes offered by the likes of Durham University in the UK and International Centre for Education in Islamic Finance (INCEIF) in Malaysia.
These qualifications and training programmes differ in content and quality. While most Western universities offer degree programmes in Islamic banking and finance, the universities in the Muslim world tend to compromise on quality of instruction in this respect.
While this kind of disparity is expected, and may in fact be acceptable, the real problem lies in the inconsistent definition of many basic terms. Concepts like the time value of money, economic explications of wa’ad (promise) and gharar (contractual uncertainty) are taught in incoherent and inconsistent ways by the teaching faculties around the world. This is certainly not helpful.
One reason for the observed incoherence and inconsistency is the infiltration of some authors who have no established background in Islamic economics, banking and finance, and have in fact managed to publish books in the field.
A few years back, when one Western author was asked to clarify an incorrect statement on riba (the prohibited interest) she had made in a textbook for a globally reputed Islamic finance qualification, she failed to demonstrate a clear understanding of this very basic concept in Islamic banking and finance.
The same author has since written a whole book on Islamic banking and finance.
Malaysia has committed millions of ringgit to the education in Islamic banking and finance. INCEIF was set up with an endowment of RM500 million.
Despite a lot of resources spent and hard work of the faculty and management, it has yet to make a real mark in the field of human resource development for the Islamic financial services industry. There are several reasons for this, but one unfortunate reason is that there appears to be no scope for a fully-fledged university specialising in Islamic banking and finance.
Unlike specialised medical colleges and engineering universities, a dedicated university for Islamic banking and finance is at best premature.
The body of literature available to structure meaningful fully-fledged academic and professional programmes in Islamic banking, finance and takaful is simply too sparse.
IIUM Institute of Islamic Banking and Finance (IIiBF) offers a good value proposition.
As part of International Islamic University Malaysia (IIUM), it has access to rich and deep academic resources.
The quality of academic personnel at IIUM can be gauged by the fact that almost 70% of the academic staff at INCEIF came from IIUM. It also has a diverse range of courses and is not strictly focused on one, still growing, area of specialisation.
Given that there certainly is a lot of duplication of activities between IIUM and INCEIF, it will be better utilisation of resources to merge INCEIF with IIiBF and develop it as a bigger centre of excellence for Islamic finance.
There is growing recognition in the market of the role that International Shariah Research Academy for Islamic Finance (ISRA) is playing to promote Islamic banking and finance worldwide. If ISRA, INCEIF and IIiBF are merged into one larger consolidated entity, this will certainly be a more effective institution and is more likely to have a greater impact on the global Islamic financial services industry.
Many industry observers believe that merging INCEIF into IIUM will certainly reduce divergence of pedagogical approaches to Islamic banking and finance.
The setting up of the Finance Accreditation Agency (FAA) is certainly a step in the right direction by Bank Negara Malaysia and Securities Commission Malaysia.
In its first year of operation, FAA focused on accreditation of Islamic finance qualifications and indeed received worldwide recognition. The Global Islamic Finance Awards awarded it the Best Support Institution for Islamic Finance for the year 2013.
While the institutions like FAA can play an effective role in standardising Islamic finance qualifications, there is a real need for consolidating resources to develop talent for the emerging Islamic financial services industry.