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| − | AUDIT & SHARIA COMPLIANCE –
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| − | ISSUES IN ISLAMIC BANKING AND
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| − | FINANCE
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| − | Presentation By:
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| − | Omar Mustafa Ansari
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| − | Partner
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| − | Ford Rhodes Sidat Hyder & Co.
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| − | (Member of Ernst & Young Global Limited)
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| − | الرحمن الرحیم ٰ بسم ہللا
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| − | ب ا ْش َر ْح ِّلي َ
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| − | ص ْد ِّري قَا َل َر ِّ
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| − | َویَ ِّس ْر ِّلي أ َ ْم ِّري
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| − | سانِّي احلُ ْل ُ
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| − | ع ْق َدة ً ِّمن ِّل َ َو ْ
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| − | یَ ْفقَ ُهوا قَ ْو ِّلي
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| − | (سورہ طه)
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Role of Auditors and Accountants in
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| − | Islamic Finance
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| − | Allah SWT says in Quran that “Allah doth command you to
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| − | render back your trusts to those to whom they are due; And
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| − | when ye judge between people that ye judge with justice.”
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| − | According to the code of ethics for accountants and auditors of
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| − | Islamic financial institutions, accounting (duly including auditing
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| − | – external, as well as, internal) is one of the professions that is
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| − | required by Shariah as a Fard Kifaya.
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| − | In other words it is a duty which, if performed by some, would
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| − | exempt others in the society. Otherwise, the whole society is
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| − | sinful.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Purity of Transactions and Building
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| − | Reliance on Islamic Finance
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| − | Islamic banking industry is presently growing at a very high
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| − | pace.
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| − | One of the critical issues the industry is facing is the matter of
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| − | purity in transactions which, in longer run, will ensure reliance of
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| − | Muslim Ummah in this model of Islamic finance and banking.
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| − | If this issue, at this stage, is ignored, it may result in a disaster
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| − | in the name of Islamic Finance.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Strategy to Build Reliance on Islamic
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| − | Finance and Banking
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| − | A three fold strategy may help out the industry to ensure
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| − | Shariah compliance on an ongoing basis.
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| − | 1. Standardization of Shariah Compliance Regulations for
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| − | Islamic Finance;
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| − | 2. Improved governance and Shariah Compliance Assurance
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| − | for Islamic Financial Institutions; and
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| − | 3. Shariah Compliance Rating of Islamic Financial Institutions
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| − | and Products.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | STANDARDIZATION OF SHARIAH
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| − | COMPLIANCE REGULATIONS FOR
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| − | ISLAMIC FINANCE
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| − |
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| − | Standardization of Shariah Compliance
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| − | Regulations for Islamic Finance
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| − | Standardization is necessary to ensure that all the matters of
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| − | Islamic financial institutions are dealt with, within a framework
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| − | which is acceptable for all Muslims.
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| − | Internationally, there have been a lot of efforts for
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| − | standardization of practices being followed by various Islamic
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| − | financial institutions. These efforts include a lot of research
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| − | work.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Standardization of Shariah Compliance
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| − | Regulations for Islamic Finance
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| − | The most admirable job has been performed by:
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| − | the Islamic Fiqh Academy of the Organization of Islamic
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| − | Countries; and
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| − | the Accounting and Auditing Organization of Islamic
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| − | Financial Institutions (AAOIFI).
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| − | In respect of governance and risk management, Islamic
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| − | Financial Services Board has also performed a commendable
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| − | job.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Introduction to AAOIFI
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| − | AAOIFI was established in 1990 in Algiers under an Agreement
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| − | of Association between a number of Islamic financial institutions
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| − | (IFIs). Now it is based in Bahrain.
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| − | Its objectives primarily include development of accounting,
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| − | auditing, governance and Shariah standards for Islamic
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| − | financial institutions.
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| − | Accounting, Auditing and Governance Standards (AAGS) are
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| − | issued by AAOIFI’s Accounting and Auditing Standards Board
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| − | whereas the Shariah Standards Board issues the Shariah
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| − | Standards.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Introduction to AAOIFI
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| − | These Boards have, to date, performed a remarkable job by
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| − | issuing accounting, governance, auditing and Shariah
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| − | standards for Islamic financial institutions.
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| − | These Boards have been established by choosing the experts
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| − | of the fields from throughout the Islamic world. Accordingly,
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| − | their works, are considered to be a consensus (Ijma) of the
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| − | experts from the field.
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| − | These work may be used for standardization of practices of
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| − | Islamic finance and banking throughout the world.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Introduction to IFSB
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| − | Officially inaugurated on November 03, 2002 and started
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| − | operations on March 10, 2003.
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| − | Serves as an international-standard setting body of regulatory
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| − | and supervisory agencies that have vested interest in ensuring
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| − | the soundness and stability of the Islamic financial services
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| − | industry.
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| − | Promotes the development of a prudent and transparent Islamic
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| − | financial services industry through introducing new, or adapting
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| − | existing international standards consistent with Islamic Shariah
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| − | principles.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Pakistan’s Perspective
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| − | Accounting and Financial Reporting
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| − | The Institute of Chartered Accountants of Pakistan has issued
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| − | Islamic Financial Accounting Standards for Ijara and Murabaha
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| − | which are under implementation stages. These standards are
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| − | approved by SBP and notified by SECP.
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| − | Shariah Compliance
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| − | SBP has established a Shariah Board.
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| − | SBP has issued essentials for Islamic banking and financial
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| − | products and a bunch of model agreements. But all these are
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| − | considered to be guidelines, and not regulations. SBP has also
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| − | issued various circulars in this respect.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Pakistan’s Perspective
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| − | Governance – What SBP is Doing
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| − | Shariah compliance framework being established. Draft Islamic
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| − | banking guidelines issued and comments received.
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| − | A Shariah compliance inspection mechanism is being introduced
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| − | and a Shariah compliance inspection manual has been
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| − | developed.
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| − | Risk management standards are being adopted with suitable
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| − | modifications.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Pakistan’s Perspective
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| − | Takaful
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| − | Takaful Rules developed and now being reviewed for
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| − | improvement. Revised Rules will include accounting regulations
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| − | for Takaful.
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| − | SECP has established a Central Shariah Board.
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| − | Mandatory Shariah Compliance Audit for Takaful.
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| − | Modarabas
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| − | All model agreements and products are being reviewed from
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| − | Shariah compliance perspective.
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| − | Religious Board for Modarabas is now in operation after a long
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| − | gap.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | IMPROVED GOVERNANCE AND
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| − | SHARIAH COMPLIANCE
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| − | ASSURANCE FOR ISLAMIC
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| − | FINANCIAL INSTITUTIONS
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| − |
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| − | Shariah Non-Compliance Risk: What &
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| − | Why?
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| − | Shariah non-compliance risk is a significant risk for an Islamic
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| − | financial institution from two perspectives:
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| − | 1. It impacts the reputation of the Islamic financial institution
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| − | and deteriorates reliance of the depositors, investors,
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| − | customers and other stakeholders in the long-term; and
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| − | 2. It impacts the revenue as well, because in case of an
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| − | identified Shariah non-compliance, the income arising
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| − | from such transaction is to be given in charity.
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| − | But, for the society, and considering it a step towards
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| − | complete transition of economy on Islamic principles, Shariah
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| − | compliance is the essence of Islamic banking and finance.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | How to Manage Shariah Non-
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| − | Compliance Risk?
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| − | Shariah Review
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| − | Shariah
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| − | Supervisory Board
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| − | / Shariah Advisor
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| − | Consideration of
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| − | Internal Shariah Shariah
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| − | Review Compliance by the
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| − | External Auditor
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Assurance for
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| − | Islamic Financial Institutions
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| − | Rules, regulations and standards might not work unless and
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| − | until an effective network of check and balance is established to
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| − | ensure compliance of the same in letter and spirit.
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| − | Shariah compliance cannot be ensured merely on the basis of
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| − | approval of products by the Shariah Supervisory Boards and
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| − | the Shariah Advisors.
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| − | Approvals have to be matched with the ground realities.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Shariah Compliance Assurance for
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| − | Islamic Financial Institutions
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| − | 1. Shariah compliance review report of Shariah Supervisory
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| − | Board or the Shariah Advisor (May, or may not be, based on
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| − | Internal Shariah Review).
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| − | 2. Shariah compliance audit by the external auditors of the
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| − | Islamic financial institutions.
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| − | 3. Shariah Compliance Inspection of Islamic commercial banks.
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| − | 4. Independent Shariah compliance assurance (internal or
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| − | external) from professionals.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Shariah Compliance Review By Shariah
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| − | Advisor – Issues
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| − | Competence (From Assurance Perspective)
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| − | Without any disregard to the individuals, and not as a
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| − | generalized rule, it needs to be realized that the jurists
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| − | sitting on the Board or working as Shariah Advisors
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| − | possess little knowledge about the accounting and
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| − | auditing, and more importantly, the operations of the
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| − | financial institutions.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Review By Shariah
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| − | Advisor – Issues
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| − | Consequently, their compliance review generally remains
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| − | limited to the extent of assurance of the legal form of
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| − | transactions i.e. vetting of agreements and documents etc.
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| − | On the contrary, the operational matters which include the
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| − | substance of the transaction might remain unattended
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| − | because it is not the core competence of these respectable
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| − | jurists.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Shariah Compliance Review By Shariah
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| − | Advisor – Issues
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| − | Management’s Attitude
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| − | Generally the management does not wish to bring each and
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| − | every matter in the attention of the Board or the Advisor.
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| − | Accordingly, unless they have enough time to review things
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| − | on their own, and they take reasonable interest in the same,
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| − | it is not possible for them to have a look on most of the
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| − | operational matters.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Review By Shariah
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| − | Advisor – Issues
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| − | Independence
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| − | Although we don’t have any doubt on the personal
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| − | independence and integrity of these respectable jurists, they
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| − | would themselves appreciate that the work performed under
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| − | one’s guidance should always be counter checked by an
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| − | independent person.
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| − | Particularly, keeping in view the human tendency of errors,
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| − | it cannot be advised that the person supervising and
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| − | monitoring the transactions is also entrusted to recheck and
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| − | audit the same.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Review By Shariah
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| − | Advisor – Issues
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| − | Scarcity of Resources (Time and Skilled Staff)
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| − | Generally those on the Shariah Boards and on the seat of
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| − | Shariah Advisors are busy guys. They are generally serving
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| − | a number of Boards and educational institutions and are
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| − | involved in a number of social and religious activities.
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| − | In addition, they do not have sufficient budgets available for
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| − | their departments, nor an adequate number of skilled staff
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| − | hired for the purpose of assisting them in the assurance
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| − | work.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Shariah Compliance Review By Shariah
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| − | Advisor – Issues
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| − | Consequently, you can easily imagine that it is humanly not
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| − | possible for a single person to perform a comprehensive
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| − | Shariah compliance audit of the operations of a full-fledged
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| − | Islamic financial institution which may even have a number
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| − | of branches.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Audit by External
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| − | Auditors – Issues
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| − | According to AAOIFI standards, the auditor should, to a
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| − | limited extent, ensure compliance with Shariah
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| − | requirements.
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| − | Option being used by certain Islamic mutual funds in the
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| − | country is Shariah compliance audit by their external
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| − | auditors.
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| − | According to Takaful Rules, a Shariah compliance audit is
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| − | required. But this is not being performed by external
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| − | auditors, as the Rules do not provide any further detail.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Audit by External
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| − | Auditors – Issues
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| − | Since the external auditor is also entrusted with the task of
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| − | performing the Shariah compliance audit, his expertise in
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| − | Islamic finance is not ensured. You would appreciate that if
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| − | the auditor is not equipped with the necessary skills and
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| − | knowledge, the output of the assignment might not be as
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| − | good as may be expected from an experience auditor; and
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| − | Since the scope of the audit is pre-defined and the matter of
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| − | permissibility of a transaction is generally subject to the
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| − | opinions and perspectives of the Shariah Supervisory Board
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| − | or the Shariah Advisor, the independence of the exercise, to
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| − | some extent, remains in jeopardy.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Inspection by SBP
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| − | - Issues
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| − | This is a very good approach, as it is independent and
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| − | authoritative in nature.
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| − | Issues identified are forwarded to the SBP’s Shariah Board
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| − | so the exercise remains independent.
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| − | Nevertheless, since the results of such inspections are
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| − | considered to be confined to the management of the Bank
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| − | and the State Bank, the benefits of such exercises cannot
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| − | be forwarded to the general public.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Inspection by SBP
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| − | - Issues
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| − | Moreover, such exercise is limited to the Islamic commercial
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| − | banks and the Islamic banking branches of conventional
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| − | commercial banks and consequently other financial
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| − | institutions that are governed by the SECP including Islamic
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| − | mutual funds, Modarabas, Takaful companies, Housing
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| − | finance companies, Investment finance companies and
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| − | leasing companies shall remain out of ambit of such
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| − | exercise.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Independent Shariah Compliance
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| − | Assurance by Professionals
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| − | This approach is now being applied by a few Islamic banks.
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| − | This may be applied in form of:
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| − | 1. Internal Shariah Review; and
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| − | 2. External Shariah Compliance Assurance / Audit.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | SHARIAH COMPLIANCE RATING
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| − | OF ISLAMIC FINANCIAL
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| − | INSTITUTIONS AND PRODUCTS
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| − |
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| − | Shariah Compliance Rating of Islamic
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| − | Financial Institutions and Products
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| − | Anyone having basic understanding of Islamic finance
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| − | would easily understand that generally all the products
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| − | being launched by Islamic financial institutions cannot be
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| − | termed equivalent for Shariah compliance purpose.
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| − | There might be certain provisions in an Ijara contract that
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| − | may render it less desirable as compared to a similar Ijara
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| − | contract. Or in general a Murabaha may be less preferable
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| − | as compared to a Modaraba product.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Rating of Islamic
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| − | Financial Institutions and Products
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| − | In addition to the products being launched by the Islamic
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| − | financial institutions that are subject to the approval of their
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| − | respective Shariah Advisors and Shariah Supervisory
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| − | Boards there are certain Islamic financial products that are
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| − | launched by the conventional financial institutions or by
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| − | various companies and even by the Government.
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| − | These products, for example, include the housing finance
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| − | option offered by the House Building Finance Corporation,
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| − | Sukuks being issued by the Government of Pakistan and
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| − | various government owned entities, Musharaka TFCs
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| − | issued by the Sitara Energy and operating lease options
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| − | offered by various leasing companies.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shariah Compliance Rating of Islamic
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| − | Financial Institutions and Products
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| − | In view of the same it is imperative that a Shariah
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| − | compliance rating mechanism be introduced so that the
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| − | general public may be able to differentiate between various
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| − | products being launched.
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| − | In addition, this will encourage the financial institutions to
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| − | continuously improve the purity factor in their financial
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| − | products.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | GOVERNANCE STANDARDS BY
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| − | AAOIFI
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| − |
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| − | Governance Standards
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| − | Shari’a Supervisory Board: Appointment, Composition and
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| − | Report
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| − | Shari’a Review
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| − | Internal Shari’a Review
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| − | Audit and Governance Committee for Islamic Financial
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| − | Institutions
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shari’a Supervisory Board (SSB)
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| − | It is an independent body of specialized jurists in fiqh
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| − | almua’malat (Islamic commercial jurisprudence).
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| − | Appointment, Composition and Report
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| − | It is appointed by shareholders in AGM upon recommendation
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| − | of Board of Directors (BOD), they may authorize BOD to fix the
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| − | remuneration of SSB. SSB shall be consisted of atleast three
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| − | members, it may seek the service of consultants but excludes
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| − | directors and significant shareholders of IFI.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Shari’a Review
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| − | The objective of the Shari’a review is to ensure that the
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| − | activities carried out by an IFI do not contravene the Shari’a. It
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| − | is the responsibility of SSB to form and express an opinion on
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| − | the extent of an IFI’s compliance with the Shari’a.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Internal Shari’a Review
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| − | The internal Shari’a review is an integral part of the organs of
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| − | governance of the IFI and operates under the policies
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| − | established by the IFI. It shall be carried out by an independent
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| − | division or part of internal audit department, depending on the
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| − | size of an IFI. The primary objective of internal Shari’a review is
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| − | to ensure that the management of an IFI discharge their
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| − | responsibilities in relation to the implementation of the Shari’a
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| − | Rules and Principles as determined by the IFI’s SSB.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Audit and Governance Committee
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| − | (AGC)
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| − | The importance of the AGC for an IFI emanates from its role in:
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| − | achieving the fundamental objectives of an IFI, by
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| − | enhancing greater transparency and disclosure in financial
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| − | reporting; and
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| − | enhancing the public’s confidence of the IFI as genuine in
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| − | its application of Shari’a rules and principles.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | AUDITING STANDARDS BY AAOIFI
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| − | Auditing
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| − | Objective and Principles of Auditing
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| − | The Auditor's Report
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| − | Terms of Audit Engagement
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| − | Testing for Compliance with Shari'a Rules and Principles by an
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| − | External Auditor
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| − | The Auditor's Responsibility to Consider Fraud and Error in an
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| − | Audit to Financial Statements
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Objective
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| − | And Principles
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| − | Objective
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| − | To enable the auditor to express an opinion as to whether the
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| − | financial statements are prepared, in accordance with Shari’a
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| − | Rules and Principles and the accounting standards of the
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| − | Accounting and Auditing Organization for Islamic Financial
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| − | Institutions (AAOIFI).
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Objective
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| − | And Principles
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| − | Principles
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| − | The auditor should comply with Code of Ethics for
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| − | Professional Accountants which include; righteousness,
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| − | integrity, trustworthiness, fairness, honesty, independence,
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| − | objectivity, professional competence, due care, confidentiality,
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| − | professional behavior and technical standards.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Auditor’s Report
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| − | The auditor should review and assess the conclusions drawn
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| − | from the audit evidence obtained as the basis for the expression
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| − | of an opinion on the financial statements, it should contain a
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| − | clear written expression of opinion on the financial statements
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| − | taken as a whole.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Terms of Audit Engagement
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| − | The auditor and the client should agree on the terms of the
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| − | engagement. The agreed terms would need to be recorded in
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| − | an audit engagement letter.
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| − | The engagement letter documents and confirms the auditor’s
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| − | acceptance of the appointment, the objective and the scope of
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| − | the audit, the extent of the auditor’s responsibilities to the client
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| − | and the form of any reports to be provided by the auditor.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Testing for Compliance with Shari’a Rules and
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| − | Principles
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| − | When testing for Shari’a compliance, the auditor shall obtain
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| − | sufficient appropriate audit evidence that provides the auditor
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| − | with reasonable assurance that the Islamic Financial Institution
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| − | (IFI) has complied with Islamic Shari’a Rules and Principles
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| − | (the Fatwas, Rulings and Guidance issued by Shari’a
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| − | Supervisory Board (SSB) constitutes Islamic Shari’a Rules and
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| − | Principles).
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | Fraud and Errors
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| − | The fact that an audit is carried out may act as a deterrent, but
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| − | the auditor is not and can not be held responsible for prevention
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| − | of fraud and error, however, the auditor shall be held
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| − | responsible for negligence and misconduct.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | WHAT ISSUES I HAVE FACED?
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| − | What Issues I Have Faced?
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| − | As External Auditor
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| − | Management is of the view that I have nothing to do in
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| − | respect of Shariah compliance (Even if I feel that it has
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| − | something to do with the Objects of the Bank / Modaraba).
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| − | Even if I have some evidence in hand, coupled with some
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| − | sort of research work, I am told that the Shariah Advisor is
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| − | the final authority. (I am independent, and without any
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| − | disregard, he is a paid employee and a party to the
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| − | transaction as he approved it).
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − | What Issues I Have Faced?
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| − | As Internal Shariah Reviewer / External Shariah Auditor
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| − | Top management and Shariah Advisor, are on my side, but
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| − | the middle level management makes all efforts to fail the
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| − | exercise.
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| − | I am bound to follow the advice of the Shariah Advisor,
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| − | without any opportunity of being heard at any independent
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| − | forum.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | What Issues I Have Faced?
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| − | As Shariah Compliance Inspector
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| − | Management of the bank under inspection makes all efforts
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| − | that either no inspection be carried out or if an inspection is
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| − | inevitable, then it should remain limited to whatever Shariah
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| − | Advisor has approved.
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| − | Shariah Advisor becomes a party along with the
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| − | management, as he has approved the transactions and
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| − | issued a clean Shariah review report.
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| − | SBP’s management is not sure as to what extent it may
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| − | interfere into the matters of the Bank with respect to Shariah
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| − | compliance.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | What Issues I Have Faced?
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| − | SBP’s management changes its decisions with regard to the
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| − | scope of inspection and the responsibility for inspection
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| − | within various departments.
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| − | SBP’s Shariah board includes a member who was the
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| − | Government’s advocate in the case against the declaration
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| − | of bank’s interest as Haram, and another member, who is
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| − | on a number of Shariah boards and Shariah Advisor of a
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| − | Bank whose independence from this perspective is not
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| − | ensured.
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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| − |
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| − | Thank you…..
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| − | Presentation By: Omar Mustafa Ansari – Partner – Ford Rhodes Sidat Hyder & Co.
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