Every Islamic Finance institution, be it a bank, an insurance or an investment company, needs a Shari’ah Board. A Shari’ah Board can be regarded as something like a religious advisory board. It is responsible for supervising the Shari’ah -conformity of all the products developed and issued by the Islamic Banking institution. So the Shari’ah board really is a customer friendly institution, as it makes sure that the Muslim client really gets what is promised to him or her by the Islamic Finance provider – this is, no conventional banking products in “Islamic disguise” are offered to customers but products, that strictly adhere to the Shari’ah, the Quran and Islam.

Members of the Shari’ah Board need long years of education for turning them into Shari’ah Scholars, which is a special kind of Islamic jurisconsult. There are only a few scholars in the world that are experts both in the teaching of the Quran as well as in economic and financial topics. So in fact a Shari’ah Scholar must be an expert in two very different worlds: The worlds of Religion and Money. By giving a Financial Services Provider the certificate that its products are Shari’ah conform, Shari’ah Scholars guarantee – with their good name – for the Shari’ah compliance of the respective product.

However, there is a big challenge also for Shari’ah Scholars, at currently there is no worldwide standard that defines, which products are Shari’ah -conform and which ones are not. This leads to the phenomenon, that certain products are admitted in certain regions whereas other products are not. The admittance of a product depends on the region, where the bank is located, the individuals in the Shari’ah Board and their belonging to a certain school of religion within Islam.

However, great efforts are currently taken to define worldwide standards and codes of conduct for Islamic Finance.