Vacuum : As ‘interest’ grows, quality textbooks needed on Islamic banking

Centres of excellence have been set up, but academic rigour found lacking

LONDON: With the emerging academic and professional interest in Islamic banking and finance in Pakistan, there is a dire need for quality textbooks in the field.

Three new centres of excellence in Islamic finance have recently been set up by Institute of Business Administration (IBA) Karachi, Lahore University of Management Sciences (LUMS) and Institute of Management Sciences (IMS) Peshawar. These new centres of excellence complement academic and professional offerings by numerous other universities in the country. International Institute of Islamic Economics (IIIE) at International Islamic University Islamabad (IIUI) has historically played an important role in academic development of the field of Islamic economics but of late more active players in the field have marginalised it.

Despite a huge interest in Islamic finance qualifications by banking professionals and the new generations of students in Pakistan, there is a lack of quality textbooks in Islamic banking and finance. Consequently, many institutions of higher learning in Pakistan have hesitated to offer academic qualifications and degree programmes in this emerging field.

Other countries, notably Malaysia, have taken steps to fill this gap by sponsoring production of textbooks suitable for their respective jurisdictions.

In Pakistan, most of the books used by universities are written by industry experts and clergy. Pakistani academia has yet to come up with a quality textbook meeting rigorous academic standards. While the incumbent books attempt to fill the vacuum, almost all of them focus on transactional details of Islamic banking and finance, with little academic rigour. As a result, there are quality differences in academic offerings of the Pakistani institutions of higher learning, especially universities, where teachers use their own notes and informal writings to teach the students.

Aimed at raising awareness of and promoting Islamic finance in the country, a private bank recently launched a new book entitled ‘Shariah Minds in Islamic Finance’ by Malaysian scholar Dr Daud Bakar. This book is an impressive account of decision-making by Shariah scholars advising on Islamic banking and financial transactions. However, this is not a textbook and while the students will benefit from it in general terms, there still remains a need for a quality textbook on the subject, specific to Pakistani market.

Higher Education Commission (HEC) of Pakistan, headed by Dr Mukhtar Ahmad, has in the recent past made impressive progress in introducing new measures for quality assurance and standardisation in higher learning in Pakistan. While the State Bank of Pakistan (SBP) is sponsoring promotion of Islamic financial qualifications, HEC should take a lead role in ensuring quality of academic offerings in this field by Pakistani universities.

A number of universities and institutions of higher learning in Pakistan, especially in Karachi, hire external staff to teach courses on Islamic banking and finance. Most of these visiting staff have their basic trainings in Shariah from traditional seminaries. While they have impressive knowledge of transactional details, most of them lack academic rigour. This results in producing graduates with vocational skills but weak in academic analysis.

If the issue of academic quality is not taken up at an early stage, there is a danger of producing low-quality instruction and research in Islamic banking and finance. This has already started showing signs of emerging in the PhD-level research in Islamic banking and finance. Most of the PhD dissertations recently submitted to different departments at Pakistani universities are of low standard. These theses at best describe transactional details, without employing rigorous academic techniques. Ironically, these universities have awarded PhD degrees on many of such dissertations that have been written under supervision of ulema (clergies) with basic training and education at madrasas rather than universities.

One should hope that with the entry of the likes of IBA, LUMS and other universities in Islamic banking and finance, the quality of instruction in Islamic banking and finance would improve in Pakistan. This will happen only if high quality textbooks are produced in this field.

The writer is an economist with PhD from the University of Cambridge

Published in The Express Tribune, May 2^nd, 2016.

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