Sharia

Sharia is the nucleus of a system of Islamic values that guarantees justice in all aspects of life, it represents a basic reference for the Islamic financial institutions in terms of observance to their activities and products. Accordingly, Sharia will remain the cornerstone of the Islamic finance industry and the basis for its discipline with the Sharia rulings in light of the discretion of Ummah’s scholars and their application of the provisions derived from the Quran and Sunnah to Islamic Finance reality. The role of Sharia lies in its work to ensure that all activities, products, services and contracts comply with the Sharia standards and provisions through the supervision of the Higher Sharia Authority (HSA) of the UAE Central Bank and the Internal Sharia Supervision Committee(ISSC), with its arms namely: the Internal Sharia Control Division and the Internal Sharia Audit Division.

Overview on Islamic Banking

Sharia is a comprehensive system covers all aspects of human life, as it organizes their work, attains their interests, meets their needs, establishes fairness between them, in a nutshell, it organizes all aspects of life, specially the economic side.

Moreover, Islamic jurisprudence does not ignore any of the major activities in our life, as it is the one that controls and governs all financial and commercial dealings in society. Just as Islamic banks apply the rules and provisions of Sharia and follow the Islamic jurisprudence, so the Islamic banking services aim to apply this jurisprudence in a suitable way to meet customer’s requirements who is desirous to deal with Islamic banks. So, the image and reputation of the bank reflect the extent of compliance with the rules of Islamic Sharia, in addition to the extent of adherence to the resolutions of the internal Sharia Supervision Committee.

Our Mission

Work devotedly, sincerely, and diligently, to purify all activities of the bank and make it fully in compliance with Shari'a, and to carry out the control and Sharia audit in fruitful and constructive way, while not failing to exert efforts to uphold and preserve the reputation and achievements of Sharjah Islamic Bank.

Our Vision

To turn Sharia Divisions to become a source of satisfaction and trust for bank’s associates, clients, shareholders, depositors, and the public, to contribute to make Sharjah Islamic Bank the optimal choice.

Our goals:

• Perform Sharia control and audit in a constructive way which leads to the achievement of sound and quality performance from Sharia perspective for all bank transactions.
• Work devotedly to raise the awareness of bank’s associates about the concept of Islamic banking in general, and to increase the knowledge about banking products and their Sharia assessment in particular.
• guide and encourage bank’s associates to observe the correct application of Sharia standards to put an end to erroneous applications that are not in line with with Sharia standards.

Introduction to Sharia Divisions:

As compliance with Sharia is the corner stone of Islamic banking, and to confirm this commitment, the urgent need for a comprehensive and an integrated system has emerged, with its major components, specific aims and related effective ways and tools to control and organize the accurate implementation of Islamic banking derived from the rulings of Sharia, which is transparent and clear, not only in bank’s activities, but it is related also to administrative aspects as well. In light of this understanding and as stated in bank’s AoA, the two divisions of internal Sharia control and internal Sharia audit have been formed as two independent divisions, each with its own tasks entrusted to it.

The two divisions are technically working under the bank's ISSC, so they bear the responsibility entrusted to them before Allah the Almighty first, and then before the ISSC, shareholders, depositors and clients. While the two divisions are reporting administratively to the bank’s Board of Directors, the thing that confirms their full independency in performing the tasks entrusted to them. Role of these two divisions is to emphasize compliance with Sharia standards in all bank’s transactions and early detection of any error and report the same to the management to rectify it and avoid its recurrence. The legitimate reference is represented in fatwas and resolutions of the ISSC and the HSA of the UAE Central Bank in addition to the Sharia standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

Our role:

• To make sure that that all activities, services and contracts have been approved by the ISSC.
• Review transactions’ files post execution. 
• Review all forms, agreements and contracts before being implemented, and review the mechanism of each transaction pre execution, to make sure that all transactions comply with the standards, resolutions and recommendations issued by the ISSC. 
• Ensure that all divisions, branches and business units observe Sharia standards and resolutions, and are working in accordance with the forms, contracts and documents approved by the ISSC.
• Review all forms and mechanisms issued by bank’s departments in light of the resolutions of the ISSC.
• Prepare and update Sharia audit manual.
• Prepare necessary forms and programs to perform Sharia audit, which determine in a documented way the soundness of all bank transactions.
• Prepare a periodic report to be submitted to the ISSC to reflect the results and remarks  relevant to the activities that took place during the report time, receive the resolutions and guidelines of the ISSC and submit the same to the Management and the concerned departments. 
• Participate in conferences, symposiums or meetings organized or invited by the ISSC or any other entity.
• Contribute with bank’s Management to form an appropriate environment for proper Sharia audit.
• Participate in conducting training sessions for bank associates on Islamic banking and Sharia mechanism for financing.

Internal Sharia Supervision Committee

The Internal Sharia Supervision Committee (ISSC) is an independent entity consists of specialized scholars in Islamic jurisprudence in particular, and legal and economic competencies, where the ISSC Sharia opinions and fatwas are in accordance with the principles of Sharia. The ISSC also guides, controls and supervises the various activities of the bank to ensure that bank’s management is following the provisions and principles of Sharia in all bank’s operations and transactions. The resolutions and fatwas of the ISSC are binding on management of the bank.

The ISSC, through the Internal Sharia Control Division, reviews contracts and documents related to investment and financing transactions executed by the bank. Furthermore, It oversees the development and application of new banking products and services, as well as promoting the sense of compliance with the principles of Sharia. Add to that the ISSC is keen on training and developing bank’s associates and raising their Sharia awareness regarding Islamic financial deals and Islamic banking, in general.

The ISSC, through the Internal Sharia Audit Division, is also concerned with auditing all bank’s products to guarantee that the bank and its associates are observing the Sharia provisions and standards approved by the HSA and the ISSC.

Internal Sharia Supervision Committee

• Prof. Dr. Jassim Ali Salem Al Shamsi, Chairman of ISSC
• Dr. Ibrahim Ali Abdullah Al Mansoori, Member of ISSC and Executive Director
• Dr. Ali Al Junaidi, Member of ISSC
• Dr. Mohammed Obadeh Adi, Member of ISSC 

Major responsibilities and duties of the ISSC are:

• Approve the Sharia issues in the AoA, as well as the policies and procedures that the bank follows.
• Review and approve the contracts and agreements relevant to bank’s financial transactions.
• Issue Fatwas on the products that have been submitted by the bank and on queries and transactions submitted to the ISSC.
• Follow up bank’s operations and verify its activities to ensure that the executed transactions are within the products approved by the ISSC.
• Provide and propose Sharia’a solutions to the financial transactions that are not in compliance with the rules of Sharia’a, as well as finding alternatives for the products that are not in line with the principles of Sharia.
• Expand the scope of knowledge and guidance for associates and prepare training programs relevant to Islamic financial deals to help accomplish compliance with the principles of Sharia.
• Provide a Sharia’s resolution on bank’s financial statements at the end of the year.
• Provide a Sharia resolution on deals that breach the provisions of Sharia, rectify them or stop them, and then notify the concerned department to avoid the recurrence.
• Review reports of the internal Sharia audit division regarding auditing bank’s deals to know to which extent these deals are in line with the principles of Sharia, fatwas and resolutions issued by the ISSC.
• Exclude profits realized through deals not in line with the principles of Sharia, and route them to charity account.
• Ensure that profits distribution and loss bearing are in compliance with the Sharia principles.
• Ensure that Zakat calculation is in compliance with the Sharia principles and AAOIFI standard of Zakat, notify the shareholders about zakat value per share, and ensure that the disbursement of Zakat is in compliance with the Sharia principles.
• Exercise the right to inspect and review bank’s accounts, documents, assets and deposits at any time and request any information that the ISSC believes is essential to obtain.
• Provide the general assembly with an annual report with the ISSC’s opinion on bank’s deals and the operations that were carried out during the year and to which extent the bank’s management’s commitment to the ISSC’s opinions and resolutions.