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  • SG-4.1 SG-4.1 Principle

    • SG-4.1.1

      Bahraini Islamic bank licensees must have an internal Shari'a audit function reporting to the SSB and administratively to the CEO. The function must be adequately resourced with proficient staff having the relevant qualification and experience.

      Amended: October 2018
      August 2017

    • Policy and Procedures

      • SG-4.1.2

        The internal Shari'a audit function must be governed by a policy and procedures manual prepared by the management in consultation by SSB. The policy must be approved by the board of directors while the procedures must be approved by senior management.

        Amended: January 2020
        August 2017

      • SG-4.1.3

        For purposes of Paragraph SG-4.1.2, the policy and procedures manual must include, but is not limited to, the statement of purpose, authority and responsibility. The policy and procedures manual must make clear that the internal Shari'a audit staff have no executive authority or responsibility for the activities they audit.

        August 2017

    • Head of Internal Shari'a Audit Function

      • SG-4.1.4

        The head of internal Shari'a audit function must be a full time employee of the Bahraini Islamic bank licensee and must be responsible for examining and evaluating the extent of the Islamic bank licensee's compliance with the following:

        (a) Shari'a principles;
        (b) The SSB's Fatawa, guidelines, pronouncements and instructions/recommendations;
        (c) Shari'a related regulations, resolutions and directives issued by the CBB;
        (d) Shari'a standards issued by AAOIFI; and
        (e) Shari'a related policies and procedures of the Bahraini Islamic bank licensee.
        August 2017

      • SG-4.1.5

        The head of internal Shari'a audit function must express his opinion on the extent of Shari'a compliance of the Bahraini Islamic bank licensee's operations through an actual audit of the business transactions.

        August 2017

      • SG-4.1.6

        The head of internal Shari'a audit function must be appointed by the management subject to the approval of the SSB in consultation with the Audit Committee and the approval of the CBB (refer to Chapter LR-1A).

        August 2017

      • SG-4.1.7

        Bahraini Islamic bank licensees must immediately notify the CBB when the head of internal Shari'a audit function, for whatever reason, ceases to hold the position (i.e. has resigned, been suspended or dismissed). In case of suspension or dismissal,the notification must include the reasons for the action taken (See Chapter LR-1A).

        August 2017