Factors of divergence of Syari’ah supervisory opinions and its effects on the harmonization of Islamic banking products and services

Overall, the aims of this study are to examine the factors that create differences of opinions among Shari’ah supervisory bodies and the effects of their opinions on standardization and internationalization of Islamic banking products and services. The study used semi-structured in-depth interview where five respondents from the Middle East and Malaysia Shari’ah advisors participated in the interview sessions. The data were analyzed using manual techniques. The findings reveal that indeed, differences in educational background, various schools of thoughts, environment and culture in which shariah advisors operate, industrial will and legal requirements in different jurisdictions significantly create differences of opinions among shariah advisors on Islamic banking products and services. In addition, the findings also reveal that these differences in opinions among Shari’ah advisory bodies create confusions among public and bankers, and
negatively affect standardization of Islamic banking products and cross-regions Islamic
banking transactions and investment. Moreover, the findings also show that it is difficult
for the industry to have Islamic-based products due to high competition from conventional
counterpart, poor technology, legal constraints and lack of political will, globalization
nature of banking transaction, low level of global awareness on Islamic banking products
and issue of moral hazard. Finally yet importantly, the study found that there are possibility for convergence of opinions, standardization of Islamic banking products and services if Islamic countries establish a unified global international Shari’ah advisory council, set international basic requirements for Islamic Shari’ah advisors, established international Islamic banks research and development centre and increase training and educations of Islamic bankers. Therefore, this study has several implications to the bankers,
policymakers and researchers. The policymakers should be able to resolve their political
differences and set up unified international advisory council and international research and
development center. The bankers should increase training and educations of the workforce as well improving their banking infrastructure to facilitate cross-border transactions.