Shariah authority to monitor Islamic banking industry
Karachi—Some leading Shariah Scholars from Pakistan are likely to be the part of a higher Shariah authority in UAE, which will monitor the Islamic banking and finance business. According to informed sources, the board of directors of the Central Bank of the UAE has reviewed a draft of proposed charter of the new authority, which will be established over the coming months. The higher Shariah authority will comprise Shariah scholars, legal and financial experts. So far, each Islamic Bank in Pakistan has its own Shariah Advisory Board, which is responsible to oversee all Islamic Banking products and financial solutions in the light of Shariah compliance.
At present each Islamic banking and finance institution has its own Shariah Board, which closely supervises the Islamic products being offered. If they find anything that does not conform to the Islamic principles they can reject it. The new authority would help greatly in the development of Islamic financial products as some scholar take very rigid views on Islamic products while there are other religious scholars who have more liberal views, which help in the product development. All Islamic financial Institutions would have to get approved their products, which would benefit the whole industry in a big way, said Islamic Banking circles.
The authority will lay down rules, criteria and general principles for Shariah compliant financial products and also undertake oversight and supervision of internal Shariah control committees at licensed banks and other financial institutions, which carry on all or part of their activities in line with Islamic Shariah. The board also reviewed a presentation on implementation of the human resources strategy, procedures and regulations and the Central Bank’s organizational structure. The board instructed expedition of execution of the proposed initiatives as per established plan.