SG-2.3 SG-2.3 Roles and Responsibilities of the SSB
SG-2.3.1
The SSB must be vested with appropriate power and authority as may be necessary to perform its duties and responsibilities effectively. The fatawa and rulings of the SSB are binding on the
Bahraini Islamic bank licensee .August 2017SG-2.3.2
The SSB must supervise the
Bahraini Islamic bank licensee's operations and activities to ensure compliance with the Islamic Shari'a, and also monitor and review transactions to ensure full compliance with Shari'a rules and principles and SSB pronouncements.August 2017SG-2.3.3
The Board of Directors must ensure through the Shari'a Governance structure mentioned in Paragraph SG-1.1.2, the existence of an appropriate and functioning internal Shari'a control framework for the compliance with Islamic Shari'a rules and principles.
August 2017SG-2.3.4
The SSB must approve the internal Shari'a audit annual plans.
August 2017SG-2.3.5
The SSB must notify the CBB in case of any failure by the Board of directors to effectively deal with any major Shari'a non-compliance of the Bahraini Islamic bank licensee. Notification must be in the form of a letter addressed to the Director of Islamic Financial Institutions Directorate at the CBB.
August 2017SG-2.3.6
All relevant documentation for new products and services, including contracts, agreements, marketing and promotional materials or other legal documentation used in the
Bahraini Islamic bank licensee's business transactions must be approved by the SSB.August 2017SG-2.3.7
The SSB must review and approve the
Bahraini Islamic bank licensee's annual Zakah calculations on behalf of the shareholders.August 2017SG-2.3.8
The SSB must put on record, in written form, any opinion that it gives on Shari'a-related issues.
August 2017SG-2.3.9
At least one SSB member must be present at the AGM to respond to any enquiries from the
Bahraini Islamic bank licensees' shareholders during the discussion of the end of year financial results.August 2017SG-2.3.10
The SSB must review the reports and observations of the Shari'a Coordination and Implementation function and internal Shari'a audit function and provide advice on such reports and observations.
August 2017SG-2.3.11
The SSB must approve the profit/loss allocation to the investment account holders.
August 2017SG-2.3.12
The SSB must specify the means of disposal of earnings that have been realised from sources or by means prohibited by Shari'a rules and principles.
August 2017SG-2.3.13
The SSB must approve the appointment and removal of the Shari'a Officer and the head of internal Shari'a audit function and supervise their work.
August 2017SG-2.3.14
The SSB must evaluate and assess, in consultation with the CEO, the performance of Shari'a Officer and Head of Internal Shari'a Audit on an annual basis.
August 2017Operating Procedures
SG-2.3.15
The SSB must develop its own operating procedures.
August 2017Relationship with the Board of Directors
SG-2.3.16
The SSB must report administratively to the Board of directors. This reporting structure particularly reflects the SSB's independence from the management of the
Bahraini Islamic bank licensee .August 2017SG-2.3.17
The SSB must meet with the Board of directors of the
Bahraini Islamic bank licensee at least once a year to discuss issues of common interest. Such meeting must have a clear and specific agenda including the difficulties faced by both parties and ways to resolve them.August 2017SSB Meetings
SG-2.3.18
The SSB should meet at least on a quarterly basis to review and approve key decisions relating to Shari'a matters.
August 2017SG-2.3.19
Each member of SSB must attend at least three fourth (75%) of the meetings during a calendar year. Attendances through video or conference calls are accepted. Further, in addition to the regular meetings, the SSB chairperson may convene SSB meetings as and when he deems necessary.
August 2017SG-2.3.20
All meetings must be chaired by the SSB chairperson and in his absence, by the vice chairperson.
August 2017SG-2.3.21
The quorum of SSB meetings must be majority of its members. The SSB decisions must be made through majority vote of SSB members.
August 2017SG-2.3.22
The agenda of the SSB meetings along with sufficient details must be sent to the SSB members well in advance, enabling them to come prepared in the meetings. The specific timelines for submission of the agenda must be set by the SSB itself.
August 2017SG-2.3.23
All the SSB approvals taken through circulation must be part of the minutes of the next SSB meeting.
August 2017SG-2.3.24
The minutes of meetings must be prepared and circulated to the SSB members. The SSB must ensure that the minutes of its meetings have necessary details of all the decisions made and / or fatawa issued along with the detailed rationale (Fiqhi or other) and difference of opinion or dissenting note, if any. Further, the minutes must be signed by all the SSB members who attend the meeting to confirm the matters addressed therein, no later than in the next meeting.
August 2017SG-2.3.25
For purposes of Paragraph SG-2.3.23, decisions taken in SSB meetings must be reflected, as appropriate, in policies and procedures and day to day operations of the
Bahraini Islamic bank licensee as applicable.August 2017SSB Report
SG-2.3.26
The SSB must submit its report as part of the annual report (See also Paragraph SG-6.1.1) to the shareholders with a copy to the Board of directors and the CBB as per AAOIFI, on the
Bahraini Islamic bank licensee's Shari'a compliance. The SSB report must also include any non-compliance issues, if present, to the Shari'a rules and principles.August 2017SG-2.3.27
The SSB's report must contain, at the minimum, the following basic elements:
(a) Title;(b) Addressee;(c) Opening or introductory paragraph;(d) Scope paragraph describing the nature of the work performed;(e) Opinion paragraph containing an expression of opinion on the compliance of theBahraini Islamic bank licensee with Islamic Shari's Rules and Principles;(f) Date of report;(g) Signature of the members of the SSB.August 2017SG-2.3.28
The opinion paragraph of the report must at least contain the following:
(a) Whether or not in the SSB's opinion, the contracts, transactions and dealings entered into by theBahraini Islamic bank licensee are in compliance with the rules and principles of Shari'a;(b) Whether or not in the SSB's opinion, the allocation of funds, weightages, profit sharing ratios, profits and charging of losses (if any) relating to investment accounts conform to the basis given by the SSB in accordance with Shari'a rules and principles;(c) Whether or not in the SSB's opinion, any earnings that have been realised from sources or means prohibited by Shari'a rules and principles have been disposed to charitable causes;(d) Whether or not in the SSB's opinion, the calculation of Zakah is in compliance with Islamic Shari'a rules and principles; and(e) If the SSB has ascertained that the management of theBahraini Islamic bank licensee has not complied with Shari'a rules and principles or the fatawa, rulings and guidelines issued by the SSB, then the SSB has to report the non-compliance issues in the opinion paragraph of its report.August 2017SG-2.3.29
The SSB report must be read by a SSB member at the annual general meeting of the
Bahraini Islamic bank licensee .August 2017Handling Confidential Information
SG-2.3.30
SSB members must ensure that information obtained in the course of their duties is kept confidential as per Article (117) of the CBB Law.
August 2017SG-2.3.31
In the performance of their duties, members of the SSB may have access to files, records, draft materials and conversations that are, under the
Bahraini Islamic bank licensee's internal procedures and by market practice, deemed confidential. Where a member of the SSB serves severalBahraini Islamic bank licensees simultaneously, the issue arises as to how they handle confidential or commercially sensitive information obtained in the course of performing their duties. It is a key concern of professional ethics that confidential or sensitive information obtained by a member of the SSB while serving aBahraini Islamic bank licensee should not be used by them in ways that could be detrimental to thatBahraini Islamic bank licensee , particularly in ways that might give a competitive advantage to its competitors.August 2017SG-2.3.32
The duty to observe confidentiality applies to all information with which members of the SSB are entrusted by the licensee, or which is brought to their attention during or at any time after the carrying out of their assignment. Confidentiality obligations do not end when a member of the SSB ceases to serve a
Bahraini Islamic bank licensee or when a matter is completed or closed. Members of the SSB must observe the same restrictions unless they have obtained express authorisation from theBahraini Islamic bank licensee that relieves them from such obligation.August 2017SG-2.3.33
Where a SSB member has a dissenting opinion on a fatwa given by the SSB, he must not criticize such fatwa publicly.
August 2017
