Egypt's top religious authority approves Islamic bonds law

Reuters, Friday 12 Apr 2013

Al-Azhar, Egypt's leading Islamic authority, says the Islamic bonds law is compliant with the principles and provisions of Islamic Sharia

Egypt's top religious authority on Thursday put its stamp of approval on a law that allows the government to issue Islamic bonds but said a few changes would have to be made first.

Al-Azhar, the leading Islamic authority, protested when the law was passed in March by the parliament dominated by the Muslim Brotherhood's Freedom and Justice Party, saying its top scholars should have been consulted.

The hardline Salafi Nour Party argued Al-Azhar's Senior Scholars Authority should be consulted on all issues pertaining to sharia, or Islamic law, in line with Egypt's new Islamist-tinged constitution.

"The authority announces that this project, after making all the changes that were decided by the authority, will be compliant with the principles and provisions of Islamic Sharia," it said in a statement, without giving details on the changes.

When passed by President Mohamed Mursi, the legislation will allow Egypt for the first time to issue Islamic bonds, or sukuk, which under Islamic principles forbid the payment of interest.

The role of Al-Azhar under the constitution is still hazy, for example to what extent its views are binding on the government, ambiguity which critics say will cause future political and legal conflict.

Egypt, which has been undergoing over two years of political and economic instability, is trying to secure a $4.8 billion loan from the International Monetary Fund to support its ailing economy.

The Nour Party believes Al-Azhar must also sign off on this deal because it includes a $4.8 billion loan on which Egypt will pay interest.

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