IRP 86 – Towards Greater Global Connectivity in Islamic Finance: An Empirical Analysis on Shari’ah Rules and Interpretations Across Jurisdictions

Internationalization of Islamic finance is an effort to transcend national boundaries and bring new business dimensions to the emerging Islamic markets. It is an offer to embrace innovative governance and financial products and services that bridge economies, foster global linkages and bring Islamic finance to the international level. Despite these established fundamental objectives, Islamic finance is still facing difficulties in cross-border financial transactions compared to its conventional counterpart, which is usually associated with uniformity, harmonization and standardization of rules and regulations. One of the most quoted reasons for these difficulties is the divergence of Shari’ah opinions among scholars, particularly between scholars of the Middle East and those of East Asia. The question that arises is whether the Shari’ah divergence in rules and interpretation across jurisdictions presents a real impediment for the achievement of the internationalization of Islamic finance.