Islamic finance is attracting increasing numbers of executives from diverse backgrounds, according to a London Business School finance professor. Narayan Naik, Professor of Finance, London Business School, who teaches on the School’s Islamic Finance and Wealth Management elective, says that finance students from a wide range of backgrounds are recognising the growing significance of Islamic Finance globally and within the financial sector.
“Since the financial crisis specialist teams within financial institutions, such as those working in Islamic finance, are seen as more significant,” says Professor Naik. Islamic finance has been growing globally at an annual rate of more than 10 per cent, according to research released at a World Islamic Banking Conference ian Bahrain last month. Professor Naik notes that numbers for the advanced-level elective at London Business School reflect this trend, rising steadily over the years.
Only a fifth of last year’s intake identified themselves as Muslim, with students representing 22 countries overall, including Peru, Hungary, Ireland, China and Bulgaria. “Most of our students are mid-career and see the course as a way to make a switch to a more specialist route, or to take their career to the next level,” says Professor Naik.
The Islamic Finance and Wealth Management elective is taught out of London Business School’s Dubai Centre at the Dubai International Financial Centre (DIFC), where it has been based for the last 10 years. The course prepares participants studying on the Executive MBA to confidently recognise and navigate a broad range of conventional wealth management and Islamic finance concepts, tools and structures.
Islamic finance is described by the International Monetary Fund (IMF) as the provision of financial services in accordance with Shari’ah Islamic law, principles and rules. Shari’ah does not permit the receipt and payment of riba or interest, gharar or excessive uncertainity, maysir or gambling and short sales or financing activities that it considers harmful to society. Instead, parties must share the risks and rewards of a business transaction and the transaction should have a real economic purpose without undue speculation and not involve any exploitation of either party.