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  • SG-2.4 SG-2.4 Terms of Appointment and Competence of the SSB

    • SG-2.4.1

      The appointment of the SSB must be made formally in writing, by way of a contract for service for a minimum period of three years.

      August 2017

    • SG-2.4.2

      Benefits and remuneration of the SSB must be set in aggregate by the general assembly.

      August 2017

    • SG-2.4.3

      Where the Bahraini Islamic bank licensee fails to appoint the SSB within 3 months of the annual general meeting or to extend the term of the previous SSB, the CBB has the right to appoint a temporary SSB for which all costs related to the appointment will be borne by the Bahraini Islamic bank licensee in addition to any liabilities related to the delay in the appointment of the SSB.

      August 2017

    • SSB Competence/ Fit and Proper Criteria

      • SG-2.4.4

        The Board of directors of the Bahraini Islamic bank licensee must carry out a background check and consider the following criteria when assessing the fitness and propriety of individuals to serve on the SSB:

        (a) Have a clean background, a good character and conduct by being recognised for honesty, integrity and good reputation in their professional business and/or financial dealings, and not previously been convicted of any moral turpitude, felony or criminal offence (See SG-2.4.5);
        (b) Have competence, diligence, capability and soundness of judgement (See SG-2.4.7);
        (c) Have strong proficiency in Arabic, as they need to be very conversant with the primary sources of the Shari'a.
        (d) Have at least a bachelor degree (or its equivalent) in Islamic Shari'a;
        (e) Have a certified degree in Fiqh al Muamalat (Islamic commercial jurisprudence) with strong understanding of Usul Al Fiqh (rules of Islamic jurisprudence);
        (f) Have adequate understanding of banking, Islamic finance and accounting; and
        (g) Have accumulated overall experience of at least seven years in Shari'a related scholarly pursuits (e.g. teaching, research, fatawa issuance, etc).
        August 2017

      • SG-2.4.5

        For purposes of Paragraph SG-2.4.4, at least one SSB member should have a fair understanding of the legal and regulatory framework applicable to the functions of the Bahraini Islamic bank licensee.

        August 2017

    • Good Character

      • SG-2.4.6

        Good character — that is, honesty, integrity, fairness and reputation — are qualities that are demonstrated over time. In determining a person's good character, and to guide the hiring criteria to be applied before appointing someone to serve on the Shari'a board, the Bahraini Islamic bank licensee should, just as when considering nominations for the Board of directors, the chief executive officer or key senior management, put in place a transparent process that considers all the appropriate factors, including, but not limited to whether the person:

        (a) Has been convicted of a criminal offence, particularly an offence relating to dishonesty, fraud or financial crime;
        (b) Has been the subject of any adverse findings or any settlement in civil proceedings, particularly in connection with banking or other financial business, misconduct, fraud, or any business in which the person is a controlling shareholder or has a controlling interest or exercises significant influence, has been investigated and disciplined or suspended by a regulatory or professional body, a court or tribunal, whether publicly or privately;
        (c) Has been the owner, manager or director of a company, partnership or other organisation that has been refused registration, authorisation, membership or a license to conduct trade, business or profession, or has had that registration, authorisation, membership or license revoked, withdrawn or terminated, resulting in the person being refused the right to carry on a trade, business or profession requiring such a license, registration or other authorisation;
        (d) Has been a director, partner or otherwise involved in the management of a business that has gone into receivership, insolvency or compulsory liquidation while the person was connected with that organisation or within a reasonably short period (e.g. one year) after the person's departure from the institution;
        (e) Has been dismissed, asked to resign, or resigned from employment or from a position of trust, fiduciary appointment or similar position because of questions about honesty and integrity;
        (f) Has ever been disqualified from acting as a director or serving in a managerial capacity because of wrongdoing;
        (g) Has not been fair, truthful and forthcoming in dealings with customers, superiors, auditors and regulatory authorities in the past and/or has been the subject of any justified complaint relating to regulated activities; and
        (h) Demonstrates a readiness and willingness to comply with the requirements and standards of the regulatory system and other legal, regulatory, or professional requirements and standards.
        August 2017

    • Competence and Capability

      • SG-2.4.7

        The Bahraini Islamic bank licensee should ensure that members of the SSB demonstrate the competence and ability to understand the technical requirements of the business, the inherent risks therein, and the management processes required to conduct its operations effectively, with due regard to the interests of all stakeholders. In assessing the competence and capability of a person, all relevant factors should be considered, including, but not limited to whether the person:

        (a) Has demonstrated, through qualifications and experience, the capacity to successfully undertake the responsibilities of the position;
        (b) Is physically and mentally fit to perform his duties;
        (c) Has sound knowledge of the business; and
        (d) Can allocate sufficient time and attention to the licensee taking into account his existing Shari'a board memberships with other organizations.
        August 2017

      • SG-2.4.8

        The level of knowledge expected from a member serving on a Shari'a board may vary according to the level of responsibility and the type of regulated activity to be carried out by the Bahraini Islamic bank licensee. However, a member of the Shari'a board is generally expected to be able to display an understanding of the:

        (a) Shari'a rules and principles that apply to the Bahraini Islamic bank licensee's proposed activities;
        (b) General legal and regulatory framework that may apply to the functions that he performs; and
        (c) Broad impact of introducing financial products to the market and the public taking into account Maqasid al-Shari'a.
        August 2017