The Board's Role
The Fatwa & Sharia Supervision Board oversees the application of different aspects of Sharia in the Bank. It also ensures that all the transactions are in strict compliance with the Sharia principles. The Board is further empowered with the right of contradicting (fatwa) any violating procedures, if found. The Board of Directors is obligated to obey the fatwas, irrespective of whether a unanimous or a majority consensus secured the decision (clause 78 of the Bank’s Memorandum & Articles of Association).
Board meetings are held periodically or whenever the need arises. The rights of the Board are enshrined in Article Seven of the Bank’s Memorandum & Articles of Association (Clauses 74-84).
Important Duties of the Sharia Board:
- As an expert source on Islamic Principles ( Including Fatwas), the Board through a representative, usually the General Secretary of the Board, supervises the Sharia compliance of all the transactions in the Bank.
- To devote time and effort to devising more Sharia-compliant transactional procedures, templates and banking products that enable the Bank to adapt to market trends while maintaining a high competitive edge in deposit procedures, investments, and banking services. At the same time, the Board gives its opinion on proposed new templates and banking transactions.
- Analysing unprecedented situations that are not covered by fatwa, in the Bank’s transactional procedures or those reported by different departments, branches and even the customers. This is to ensure Sharia compliance before the Bank develops any new products or implements any new procedure.
- Analysing contracts and agreements concerning the Bank’s transactions, as submitted by the Chairman of the Board of Directors or any department/branch within the bank or requested by the Board itself so that Sharia compliance can be evaluated and maintained.
- Ensuring Sharia compliance in the implementation of all banking transactions and correcting any breaches.
- Analysing administrative decisions, issues and matters that require the Board’s approval.
- Supervising Sharia training programmes for the Bank’s staff.
- Preparing an annual report on the Bank’s balance sheet with respect to its Sharia compliance.
The Fatwa & Sharia Supervision Board submits a complete annual report for the Board of Director, summarizing all the issues referred to the Board, as well as its opinion on the Bank’s transactional procedures.