7/30/2019 The Heart Beat of Islamic Banks

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7/30/2019 The Heart Beat of Islamic Banks

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25©20th July 2011

FEATURE

• Maintain a system of compliancehaving special emphasis on Shariahin the light of existing jurisdictionallaws, rules, regulations, policies and

procedures related to Islamic banks.

• Uphold the highest transparency andmaintain justice.

• Provide all necessary documentsto Shariah compliance officials inperformance of their functions toensure Shariah compliance.

• Hold Shariah audits periodically andensure all the products and servicesare adhering to Islamic laws.

• Provide adequate advice in corporategovernance and decision making.

• The SSB is responsible for educatingthe interested parties about theIslamic rules and regulation in allactivities.

As Shariah supervision is an integralpart of the industry, it requires the ratingof each entity in order to identify theShariah compliance rating for them

which will atract investors and increasegeneral public confidence.

In order to meet the requirements ofShariah rating, the International IslamicRatings Agency (IIRA) was established in

 July 2005 in Bahrain.

The main objective of the IIRA is tofacilitate the development of regional

and national financial markets and toimprove their functioning as well asimprove the quality of rating agencies.The IIRA is like other credit rating

agencies but only the diff erence is itlooks at the Shariah.

The IIRA off ers Shariah quality ratingsfor the assessment of the level ofcompliance with principles of Shariahand provides rating for all types ofissuers and issues.

Shariah is the heartbeat for an IFI andtherefore Shariah supervision is not a mat-ter to be taken lightly. The investors andgeneral public confidence, in any sector,are always important considerations.

So every organization must make surethat their institution’s heartbeat isfunctioning properly to stay alive in thespirit of Shariah, which is the core goalfor any IFI.

 Muath Mubarak is the director of studies andcorporate strategy at First Global KnowledgeCenter, Sri Lanka and he can be contacted atmuath2015@gmail.com or muath@ firstglobal-

 group.com.

 Shariah supervision

may be thought 

of as the single

most important 

distinction between

a conventional 

and a truly Islamic 

 f inancial 

venture

Continued

For more information, please contact geraldine.chan@redmoneygroup.com or call +603 2162 7800.

START DATE: 1st July END DATE: 1st August

800+ FUNDS, 1 GLOBAL POLL 

The IFN Islamic Investor Poll focuses on the rapidly developing Islamic funds industry.With over 800 Shariah compliant funds and a combined value in excess of US$50 billion,

the Islamic funds industry is becoming a key focus for the investor community.11 key categories will be contested starting the 1st July.

www.IslamicFinanceNews.com

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