CAIRO - Egypt’s Islamist President Mohamed Morsi Sunday referred a controversial draft law on Islamic bonds – sukuk – to Al-Azhar's Senior Scholars Authority, according to Egyptian state television.
The Salafi Nour Party has lobbied to refer the draft law to the Al-Azhar in application of the provisions of the Constitution.
A delegation from the Salafi Nour Party, the second largest party in the Shura Council, visited Grand Imam of Al-Azhar University, Ahmed El-Tayyeb, earlier in March to inform him of the party’s position.
Last week, Al-Azhar criticized the draft law, saying it gives the prime minister the power to form the authority that issues the bonds.
Hassan El Shafei, Al-Azhar's Senior Scholars Authority, called on the Shura Council in a meeting to discuss the amended law, to present the draft to Al-Azhar again to make sure that earlier remarks were taken into account.
In late February, Al-Azhar, Egypt's leading Islamic religious authority, said its clerics must be consulted on the proposed law, which would allow the government to issue Islamic bonds.
Al-Azhar's statement set it at odds with the Muslim Brotherhood, which drove the legislation through the Shura Council (the upper house of Egypt's parliament, currently endowed with legislative powers) on 19 March.
The law would let Egypt issue bonds compliant with Islamic principles regarding debt interest, allowing the state to tap into new areas of finance as the administration of President Morsi grapples with a widening budget deficit.
The proposed sukuk law has been a source of friction between the Brotherhood, whose Freedom and Justice Party (FJP) represents a majority in the Shura Council, and more hardline Islamist groups who say the draft legislation must first be approved by Al-Azhar scholars.
Morsi hails from the Muslim Brotherhood and was the head of the FJP before assuming the presidency.