CBK Forms the Higher Committee of Shari’ah Supervision
In view of Law No. (3) of the year 2020 concerning the formation of a higher Shari’ah supervision authority, the Central Bank of Kuwait (CBK) Board of Directors approved the establishment, on 1-9-2020, of the Higher Committee of Shari’ah Supervision at the CBK and the guidelines organizing its business, within provisions of relevant laws.
This initiative stems from the CBK’s commitment to maintain financial stability and to underpin the governance of Shari’ah supervision and compliance in Islamic financial and banking institutions according to international best practices. This is in line with rapid developments seen in the Islamic finance industry in the State of Kuwait.
In a statement, the CBK highlighted that the decision to establish the Committee was taken after an assessment of global experiences where central banks have Shari’ah supervision authorities in place. The Committee shall play a role in presenting opinions and counsel to the Central Bank of Kuwait on: Shari’ah compliance of financial transactions between the Central Bank and Islamic banks and finance institutions, on the instructions the CBK issues to these institutions. The Committee will also propose general guidelines for products and services they offer. It shall also propose controls to regulate the business of Shari’ah supervision bodies, conduct internal and external Shari’ah audits, and govern the activities related to Fatwa and Shari’ah supervision at Islamic banks and finance institutions.
The Committee will also preapprove candidates for membership on Sharia’ah Boards at Islamic banks and finance institutions, issue final decisions where Sharia’ah supervision authorities deliberations are inconclusive, and present Shari’ah-based opinions on matters referred to it by the courts or arbitration centers relating to issues of Islamic banking and finance business.
The statement added that a decision has been issued by the Governor and Chairman of the Board of Directors of the Central Bank of Kuwait, on 5-10-2020, on the establishment of the Higher Committee of Shari’ah Supervision and the appointment of the following four experienced Fiqh and Islamic banking specialists as members:
- Dr. Essa Z. E. Shaqra - Chairman
- Dr. Khaled M. Y. Boodi - Member
- Mostafa Sayed H. A. Alzelzelah - Member
- Dr. Motlaq J. M. Aljaser - Member
In conclusion, the Central Bank of Kuwait stressed its commitment to making diligent efforts toward developing the banking sector in Kuwait and promoting governance across the sector, aiming to bolster the State’s financial stability.