WVB's News Content

» Shari’a Administration within Islamic Banks

Shari’a Administration within Islamic Banks:
Shari’a administration takes place in the Shari’a Control Board and the Shari’a Audit Administration within the bank.

Sharia Control Board:
In each Islamic bank there is a Sharia Board to supervise the banking operations. It consists of; at least, three members with experience in both transactions Jurisprudence of Islamic Shari’a, and banking operations. The Sharia Board is the final authority within the bank in terms of all matters related to the provisions of Islamic Shari’a. The board also revises the bank’s papers, structures, policies, and legal agreements. Additionally; it issues decisions about all financial matters, as well as preparing an annual report to the shareholders concerning the bank’s commitment to Sharia.
In Order to ensure the independence of the board and to prevent pressure from the Board of Directors or others, the Sharia Board follows the General Assembly of Shareholders directly.  They are also appointed by them and not by the Board of Directors. The Shari’a Board is also obligated to apply the standards of the Accounting and Auditing Organizationof Islamic Financial Institutions.
The Shari’a Board does not interfere in the administrative work of the bank; its mission is limited to Fatwa and Sharia control. Its decisions are binding on the Board of Directors.

The Sharia Audit Administration:
It is an independent board subordinate to the Sharia Board. It is responsible for internal control, making sure that the bank commits to Fatwas, as well as providing Sharia guidance in the daily matters of the bank according to the board's decisions, and raising guidelines for new issues to the Board for their consideration.