Islamic scholars are finalizing work on a sharia standard for gold-based products set to become effective before the end of the year and possibly help kick-start a new wave of product development in Islamic finance.
Gold has been treated mostly as a currency in Islamic finance, limiting its use to spot transactions, while consumer demand for gold in the Middle East has actually fallen in recent years.
Guidance from the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions could address some of the reasons behind the lack of gold products in the industry and the muted demand from the region.
The organization plans to issue its sharia standard on gold and its trading controls in coming weeks, Mohd Daud Bakar, founder and executive chairman of Amanie Group, said at an annual conference held by the organization this week in Manama, Bahrain.
"The sharia standard on gold from my perspective is a game changer given the market conditions, given the preconceived idea that we have -- even among the scholars themselves -- that gold is very restricted." ...
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