The State Bank of Pakistan has issued the criteria for appointment of 'Shariah Advisers' and made it obligatory for banks to ensure that 'advisers' hold minimum Shahadat ul Aalmia degree, or postgraduate degree in Islamic Jurisprudence/Usooluddin, or equivalent from any recognised university with exposure to banking and finance.
On Tuesday a notification of the Bank said that in supersession of IBD Circular No 3 of October 26, 2004, revised 'Fit and Proper Criteria' for Shariah Advisors of Islamic Banking Institutions and SAP-Form were being introduced with immediate effect. The revised guidelines/formats shall henceforth be used by all IBIs desiring to appoint a 'Shariah Advisor' for related evaluation and submission of information to SBP for prior clearance.
In terms of the revised criteria, inter alia, Shariah Advisor will not hold any executive/non-executive position in any other financial institution, except working as 'Shariah Advisor' of Islamic mutual funds of the same IBI. In case Shariah Advisor of an IBI is already working on some executive/non-executive position in any other financial institution, except as Shariah Advisor of Islamic mutual funds of the same IBI, the position should be regularised within a period of six months by relinquishing either of the posts.
To update the database of Shariah Advisors of IBIs in Pakistan, all existing IBIs have been advised to submit information about their Shariah Advisor in the format provided in revised SAP-Form, within 30 days of issuance of the Circular.
Moreover, Shariah Advisors of all IBIs will have to sign a declaration, as per format, before assuming office. The declaration will be kept on record with the IBI. For existing Shariah Advisors, the declaration, as per format, will have to be obtained immediately and placed on record.
The laid down criteria are in respect of educational qualifications, experience and exposure, track record of service, solvency and financial integrity, integrity in respect of honesty and reputation and conflict of interest.
EDUCATIONAL QUALIFICATION: Shahadat ul Aalimia degree (Dars e Nizami) from any recognised board of madrassah with minimum 70 percent marks and Bachelor's degree with a minimum of Second Class and sufficient understanding of banking and finance.
In case otherwise a postgraduate degree in Islamic Jurisprudence/Usooluddin, LL M. (Shariah) etc with a minimum GPA or equivalent from any recognised university with exposure to banking and finance.
EXPERIENCE AND EXPOSURE: The candidate must have at least four years' experience of giving shariah rulings including the period of Takhasus fil Ifta; or at least five years' post-qualification experience in teaching or research and development in Islamic banking and finance. Reasonable knowledge of Arabic and English language is necessary. Preference will be given to those who have certificate in Takhassus fil Fiqh/Kakhassus fil Ifta.
State Bank of Pakistan, at its sole discretion, can give relaxation in respect of educational qualification and experience in exceptional cases where the person is otherwise qualified for giving shariah rulings on banking and financial matters.
TRACK RECORD: The shariah adviser must have an impeccable track record in social, economic and financial dealings. He should not have been terminated or dismissed in the capacity of employee or director/chairman from any institution, firm or a company.
SOLVENCY AND FINANCIAL INTEGRITY: He should not have been associated with any illegal activity, especially relating to banking business. He has not been in default of payment of dues owed to any financial institution and/or default in payment of any taxes in individual capacity or as proprietary concern.
INTEGRITY, HONESTY AND REPUTATION: He has not been convicted in any criminal offence involving financial impropriety or moral turpitude, has not been subject to any adverse findings or any settlement in civil or criminal proceedings with regard to investment, financial/business misconduct or fraud. He has not contravened any of the requirements and standards of financial, banking or corporate regulatory system.
CONFLICT OF INTEREST: A person can work as shariah adviser for not more than one Islamic banking institution in Pakistan. He shall not hold an executive/non executive position in any other financial institution, except working as shairah adviser of Islamic mutual funds of the same IBI. He should neither have any substantial interest (5 percent or above) in business of a) exchange company, b) member of stock exchange and c) corporate brokerage house, nor should be an employee of the aforementioned entities.
Shariah adviser shall sign a declaration of fidelity and secrecy, before assuming office, as per provisions of Section 33 Sub-Section (2) of banking Companies Ordinance 1962. The declaration shall be kept in safe custody with the IBI.
Comments
Comments are closed.