Al-hamdulillah, All praise be to Almighty Allah, the lord of all the worlds and beautiful peace and blessings be upon his Messenger Muhammad (S.) and upon his Household and righteous Companions.
Islamic Banking is operated in Bangladesh as per Instructions/Guidelines contained in the Banking Companies Act, 1991 (amended to 2013) and BRPD Circular No-15 Dated 09.11.2009, on Islamic Banking. Shariah based Banks/Windows/Units are to be evaluated/supervised, as to whether they are following the Shariah Guidelines/ Principles accordingly in addition to General Banking Guidelines/Principles requires the Board of Directors to appoint a Shariah Supervisory Committee shall have a minimum of three and a maximum of seven Members for a term not exceeding two years and each Member may be eligible for reappointment. The remuneration of the Members of the Shariah Supervisory Committee shall from time to time be determined by the Board of Directors.
Shariah Members of the Shariah Supervisory Committee sits in the General Meetings and Emergency Meetings (when necessary) to discuss the matters of the Bank to give Opinions & Directives and given solutions thereof from the view point of Shariah Principles.
The Shariah Supervisory Committee (SSC) is represented by 7 (seven) Members consisting of Muslim Religious Scholars in the country, Prominent Ulama, Faqihs having adequate knowledge is Fiqhul Muamalat (Islamic Commercial Law), Experienced Bankers and Eminent Economists nominated by the BOD of the Bank. It is mentionable that the decision of the Shariah Supervisory Committee is conclusive decision for all of the Banks, the Board of Directors is obligated to obey the Shariah decisions (Fatwas), irrespective of whether a unanimous or a majority consensus secured the decision.
It will be the responsibility of the Board of Directors of the respective Banks to ensure that the activities of the Banks and their products are Shariah Compliant. The Board of the Islamic Banks/Conventional Commercial Banks having Islamic Branches, therefore, be constituted with Directors having requisite knowledge and expertise in Islamic Jurisprudence. The Board may form an Independent Shariah Supervisory Committee with experienced and knowledgeable persons in Islamic Jurisprudence. However, the Board shall be responsible for any lapses/irregularities on the part of the Shariah Supervisory Committee.
(Ref : Guidelines for Islamic Banking BRPD Circular # 15, Dated-9 November, 2009, Article # Section-iii, Bangladesh Bank & Memorandum and Articles of Association of AIB PLC, Clause # 158.1. 158.2 and 158.3)
Adverse consequences that may arise due to non-compliance with any Shariah Principle may be summarized as follows:
(Ref : Guidelines on Internal Control and Compliance in Banks, Bangladesh Bank & Bye-Law, Shariah Supervisory Committee, AIB PLC)
The Shariah Supervisory Secretariate works by Shariah Secretary, Muraqibs (Shariah Inspectors)/Officers/Staffs mainly for Shariah Inspection to all Branches and helping to implement the Fatawas and Guidance of SSC. The Secretary liaises with SSC and BOD and handles other activities according to Bye-Law of SSC. The Muraqibs (Shariah Inspectors) submit the Inspection Reports to Shariah Secretariate, Management and SSC to assure Shariah Compliance. As per decision of the Shariah Supervisory Committee, Shariah Secretariat starts for Shariah Inspection to all the Branches of the Bank.
Al-hamdulillah, The Secretary of SSC and The Muraqibs of SSC being divide into different teams & inspect all Branches of the Bank. They made & sent the Shariah Inspected Report to the respective Branches and collected their views and after that they submit the same to the Shariah Supervisory Committee’s Meeting to segregate and finalize the Doubtful Income. After the completion of Shariah Inspection of all Branches they finalize the Doubtful Income and inform the Total Amount to the Board of Audit Committee to take administrative action against the same Branch’s Manager and Investment In-charge providing Charge Letter. Moreover, before finalizing the Annual Balance Sheet of the Bank Total Doubtful Income becomes segregate from the Total Investment Income of the Bank for avoiding distribution the same to Depositors as Profit. Shariah Supervisory Secretariate does some works are as below :
Shariah Inspection should be conducted based on the Shariah non-compliance Risk Rating to mitigate the above Shariah non-compliance Risk. Shariah inspection to be conducted for achieving the following objectives:
The area of Shariah Inspection presently covers the following activities of the Bank Branches:
To determine the individual Branch’s Shariah non-compliance risk position based on operational performance, 100 marks may be allotted as per the categories mentioned in the Guidelines on Internal Control and Compliance in Banks by Bangladesh Bank. On the basis of the score obtained on the method mentioned earlier, the Branches may be divided into the following Three Categories in every year :
Primarily the Branches which obtained a score of 30 or above, may be treated as High Risk Branches, the Branches which obtained a score from 15-29.99 may be treated as Medium Risk Branches, and the Branches which obtained a score of 0.00-14.99 may be treated as Low Risk Branches. It is mentionable here that, these risk indicator slabs of considering a Branch as High/Medium/Low Shariah non-compliance risk bearing may be changed from time to time if necessary.
Depending on gravity of deviation from Shariah Compliance, the Secretary of SSC will categorize the Branches/Windows into High, Medium and Low risk categories and the frequency of Shariah Inspection shall be as under :
|Frequency of Shariah Inspection
|At least once a year
|As decided by Shariah Board/SSC
The Shariah Inspection should check at least a percentage of the Income of the Bank/Windows as decided by the Shariah Board/SSC. The Shariah lapses are to be categorized in two categories; viz. Major Violations and Minor Violations. All the violators (especially those with major violations) must be sanctioned appropriately, which will help the Bank to become more Shariah Compliant. Repeat offenders are to be dealt with severely to stop recurrences of Shariah violations.
(Ref : Guidelines on Internal Control and Compliance in Banks, BRPD Circular # 03, Date : 8 March’2016, Bangladesh Bank)
Shariah Supervisory Secretariate arrange always countrywide Divisional based Daylong Shariah Training/Workshop Program to increase awareness among the employees of the Bank regarding Shariah Compliance and the Members of Shariah Supervisory Committee, Secretary and Muraqibs of the Secretariat were trainer thereof. Besides, They arrange motivational program to increase Shariah awareness among our Officials during the visit/inspection of our all Branches also. They distribute Shariah Manual on Islamic Banking and Islami Banking : Shariah Nitimala Books among the employees of our Branches those who did not receive earlier. Some Books like, Translation of The Al-Quran, Tafsir, Hadith and Islamic Banking purchase by the Shariah Secretariate to enrich the Library of Shariah Supervisory Secretariate.
بِسْمِ اللهِ الرَّحْمٰنِ الرَّحِيْمِ
Honorable Shareholders of Al-Arafah Islami Bank PLC
.اَلسَّلَامُ عَلَيْكُمْ وَرَحْمَةُ اللهِ وَبَرَكَاتُهٗ
As a Shariah Supervisory Committee we examine all the Banking activities to see whether all Shariah Laws, Guidelines, Directions and Fatwas given by the Shariah Supervisory Committee from time to time have been complied with by the Bank or not. On the other hand it is the responsibility of the Management of the Bank to ensure Shariah Compliance thereof. On completion of the examination Shariah Supervisory Committee places an Independent Report based on Islamic Shariah before the Shareholders as some opinions:
May Allah (swt) forgive all our mistakes that have been done intentionally & unintentionally and accept all our good deeds for His sake and give us Tawfiq to do more and more activities beneficial to mankind, Ameen.
|Mufti Sayeed Ahmad Muzaddedi
|Mufti Muinul Islam
|Mufti Shahed Rahmani
|Mawlana Mohammad Abdul Hai Nadvi
|Mohammad Abul Hossain Al-Azhari
|Alhajj AZM Shamsul Alam
|Alhajj Salim Rahman
Member (By Holding of Position)
|* Md. Abdur Rahim Khan
(Md. Abdur Rahim Khan)
Senior Vice President & Secretary
Shariah Supervisory Committee