(b) A contractual clause that allows the agreement to be converted from one financing format to another when the instalments are not paid on time.

The Council of the Academy recommends the following:

1 – Islamic banks should continue their dialogue with the central banks of Muslim countries so that the banks can fulfil their role of investing the funds entrusted to them in accordance with the sharīʿa principles that govern banking activity and suit its distinctive nature. Central banks, for their part, must take into consideration what Islamic banks need in order to succeed in playing an effective role in national development within a framework of supervision that respects the special character of Islamic banking. The Organization of the Islamic Conference and the Islamic Development Bank should be invited to reconvene the meetings of the central banks of Muslim countries, thereby giving an opportunity for this recommendation to be implemented.

2 – Islamic banks should devote attention to qualifying their leadership and staff with professional expertise that is fully aware of the nature of Islamic banking, providing suitable training programmes in cooperation with the Islamic Research and Training Institute and other bodies concerned with Islamic banking training.

3 – Proper attention should be given to the salam and istisnaʿ contracts, since they provide a sharīʿa-compliant alternative to conventional production-financing methods.

4 – The use of murabaha to the purchase orderer should be minimised as far as possible and restricted to applications that fall under the bank’s direct supervision and in which breaches of the sharīʿa rules governing it can be safely avoided. Wider recourse should be made to other investment modes—such as mudaraba, partnership (musharaka) and leasing (ijāra)—with close follow-up and periodic evaluation, and benefit should be taken from the various accepted cases in