MANAMA: The Central Bank of Bahrain is working on more stringent Shari’a supervisory rules and regulations to meet the demands of the rapidly growing Islamic banking industry, a senior official at the CBB revealed on Wednesday.
Islamic banking industry has been sustaining the development patterns for the past many years and new rules are needed to take this industry to the new level,” Khalid Hamad Executive Director at the CBB on the sidelines of the opening ceremony of the ABIB’s new branch at Galleria Mall told The24X7News Bahrain (www.twentyfoursevennews.com).
“To support the growth of the Islamic banking the CBB has issued a Consultation Paper on Shari’a Governance as we feel that the Islamic banking industry in Bahrain needs enhancement,” he said.
“Now the Industry is maturing and needs a proper regulatory or legislative setup in the very crucial area of Shariá Governance. Through this paper we are introducing minimum requirements for the Shari’a Governance means minimum requirements for the Islamic Financial Institutions (IFIs) internal boards in terms of the functions, mandatory requirements, role and qualifications of board members and well as qualifications of scholars,” he said, adding that the CBB is also restructuring Shari’a supervision functions in the IFIs through this consultation paper.
For example, he said, at present there are no rules about the specific function of the Shari’a boards, now the regulator is specifically seeking to focus on both internal and external functions of the Shari’a boards.
“Internal shari’a audit and consultancy role within the bank are required through the new system, for example, in addition to the internal audit if the bank is launching a new product the consultancy function will help in the development of innovative products and services.
“The third function of the Shari’a board is the external auditors input which is aimed to assist and complement the efforts of the bank to bolster the role of their respective Shari’a boards.”
