BC-B.3 BC-B.3 Principle 3: Capabilities
BC-B.3.1
An
Islamic bank licensee must ensure that it has in place the necessary systems and procedures, and that its employees have the necessary knowledge and skills, to comply with this Module and other CBB requirements in Volume 2 Rulebook.Added: July 2015BC-B.3.2
This principle requires that the board of directors,
senior management , staff and representatives (such as agents) of anIslamic bank licensee must be capable of discharging their duties competently. The required capabilities must include having an understanding of the rules and principles of Shari'a that is appropriate to their responsibilities, including Shari'a-compliant characteristics of the financial products and services offered by theIslamic bank licensee .Added: July 2015BC-B.3.3
Capabilities may relate to designing products, to selling and distributing the products, or to the competencies necessary for successfully carrying out the business activities of the
Islamic bank licensee , such as risk management, including asset-liability and liquidity management and the placement and management of funds. Lack of the necessary capabilities may result in flawed products, defective contracts and other paperwork, bad credit decisions, poor and costly underwriting decisions, and products that do not meet legal or regulatory requirements. These shortcomings can in turn result in operating losses or underwriting deficits, and products being mis-sold.Added: July 2015BC-B.3.4
An
Islamic bank licensee must ensure that the persons entrusted to deal on behalf of theIslamic bank licensee are equipped with an appropriate level of knowledge of the Shari'a-compliant characteristics of the financial products and services offered by theIslamic bank licensee . Having staff with the necessary capabilities is key to avoiding excessive levels of operational risk in banking.Added: July 2015BC-B.3.5
Staff training and development are most important in fostering the required capabilities and must include an emphasis on the Code of Business Conduct that the
Islamic bank licensee has developed, which should be consistent with these General Principles. Continuous training and development of awareness of employees at all levels are required in order to arrive at a clear framework of guidance that indicates what is acceptable conduct, as well as the sanctions to be applied to violators of the code.Added: July 2015
