The Shariah Supervisory Board is entrusted with the duty of directing, reviewing and supervising the activities of the Islamic financial institution ...
He notes that one Sharia board (at HSBC Amanah) had regional committees for Malaysia, Saudi Arabia, Indonesia, and Singapore to deal with the "spectrum of beliefs" across the Muslim world.
As of 2013, for example, the regulators in Bahrain, Indonesia, Jordan, Kuwait, Lebanon, Malaysia and Pakistan have developed guidelines for SSBs in their respective jurisdictions.
But "weak government management (a lack of ministerial-level coordination)" and "an uncertain legal environment" have hindered expansion of Islamic banking in Indonesia.
If the board does have a management roll, it will be subject to the FSA approval process, including "fulfilment of legal qualification and competency criteria".
[23][15] Some Islamic Banking observers believe the industry suffers from handpicked, highly paid Sharia experts approving financial products that have resorted to ḥiyal (legal stratagem) to follow Sharia law,[24] "shunning controversial issues", or "rubber stamping" bank management decisions after perfunctory reviews.
Then we are free to distribute the product as Islamic.”[28]According to Foster, this practice of shopping for an Islamic scholar who will issue a fatwa testifying that a banking product obeys Shari'ah law has led to financing mechanisms that appear to outsiders to be mortgages "dressed up in Arabic terminology"—such as Mudarabah, or Ijarah (lease agreements) -- being declared Sharia compliant.
For example, only a small group of jurists approving "unsecured lending" to retail and corporate customers through the tawarruq mode (where the commodity being financed is immediately sold to raise cash) in the early 2000s.
[30] Another issue is the need for Sharia supervisors to be trained in both Islamic commercial law and contemporary financial practices, the scarcity of such people, and the high prices they command as a result.
Two researchers noted the small group of Sharia experts "earn as much as US$88,500 per year per bank" and can "charge up to US$500,000 for advice on large capital market transactions.
It gives them an opening to a new lifestyle that includes air travel, sometimes in private jets, staying in five-star hotels, being under the focus of media attention and providing their opinions to people of high social and economic ranks, who are anxious to listen.
In addition, they are frequently commissioned to undertake paid-for fiqh (jurisprudence) research and to find solutions to problems that the new breed of bankers face.