On Nov. 22, PAK CB issued Shariah governance framework for banks.
PAK CB revised Shariah governance framework (SGF) for Islamic banking institutions.
Follows PAK CB Apr. 2021 unveiled plan for the Islamic banking industry, see #102163.
Amendments
Aims to enhance Shariah compliance by defining the roles and responsibilities of key stakeholders, including the board of directors (BoD), executive management.
Also Shariah board (SB), other departments such as product development and audit.
Mandates mechanisms for BoD oversight, management accountability, establishment of an independent Shariah board, including a resident Shariah board member (RSBM).
Requires a Shariah Compliance Department (SCD) to act as a liaison between the SB and management, along with internal and external Shariah audit mechanisms.
Effectiveness
Revised SGF is effective from Jan. 1, 2025; Islamic banking institutions must comply with the revised SGF, submit a compliance status report to PAK CB by Mar. 31, 2025.
