Riyadh, Asharq Al-Awsat-One day whilst I was visiting a friend of mine who works in the Islamic banking sector I noticed that on his desk there was an Islamic banking award given by one of the renowned bodies in this field. Upon congratulating him on receiving this award I was shocked by his response, he thanked me for my congratulations but advised me not to pay any attention to such awards, as they are awarded according to the number of tables booked for the award ceremony [by the financial institution] and so are completely worthless.
There can be no doubt that my friend did me a favor by informing me of this, and he only confirmed the suspicion that I felt with regards to many of these awards, due to their large number, as well as the lack of transparency in the selection criteria, indeed some awarding bodies rely upon [clearly] unreliable methods in their selection [of the award winners]. For instance, [in some cases] questionnaires are e-mailed to a list of recipients taken from the awarding body’s database, these questionnaires are then filled in [and sent back] and the winner of the award is decided by a votes system based on answers given in the questionnaire. Yet many of those that vote might be completely ignorant of the subject of the questionnaire [i.e. the finance sector].
The global financial crisis has shed light upon this, in the same way that it has shed light upon aspects of credit rating, and the relationship between credit rating agencies and financial institutions. This relationship [between credit rating agencies and financial institutions] was described by a US analysis on the CNN Arabic website as being adulterous, and the G20 countries including the issue of regulating credit agencies operations in their agenda [during the recent summit]. There can be no doubt that this conflict of interests was one of the reasons behind the global financial crisis, and that it can be more clearly seen in the granting of awards, especially once we are aware that the awarding bodies are not subject to any regulation by independent professional regulatory bodies and so operate under a separate set of standards and regulation.
This is why every so often we discover that a particular awarding body has granted a particular financial institution the award for Company of the Year, whilst a different awarding body has granted an award of the same name to a different institution, and so [it is clear] that what influences these award giving bodies are its own immediate interests. It became clear that many of the Islamic and non-Islamic financial institutions to have received these awards are those that are most affected by the financial crisis. And so reason and logic say that the [awarding of] these prizes cannot be trusted and should not be celebrated, or considered to be proof or evidence of the competence of a financial institution.
Yet in reality things are quite different, and these awards have become something of a lure for clients and financial institutions. This is what motivated Islamic financial institutions to grant such awards whenever possible, and highlight those that win them, and so we find that some institutions have won more than 20 awards over the course of the year from a variety of sources. There are awards for the best financing, awards for the best infrastructure, even awards for the best individual funding and so on. These awards will continue to mushroom so long as there are those willing to pay for them, and today there are so many awards that they cannot be counted. And so this situation reminds me of the Arab poet who said “So many Antelope gathered around Khirash that he did not know which ones to hunt.”
Therefore I believe that the regulatory bodies around the world, including those in the Islamic world, should determine the legal responsibility of the awarding bodies in the event of the inaccurate and non-credible selection of award winners. I also believe that these regulatory bodies should not allow financial institutions to promote themselves using these awards unless they are completely certain of the criteria upon which the award was granted [i.e. the dependability of the award].
So long as we are talking about Islamic financial institutions, I also suggest that the General Council for Islamic Banks and Financial Institutions adopt regulation for this industry, and set-up professional standards and foundations for it by establishing an affiliate organization to grant the awards. This is because such awards are equivalent to certification by Islamic Shariaa Law, and such certification ought to be given in good faith, for “That is most suitable” that they give the evidence in its true nature and shape.” [Quran: Al-Maeda. Verse 108].