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Article 10: Responsibilities of the Shariah Committee

Effective from Feb 12 2020 - Aug 08 2020
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The committee shall be responsible for all its decisions related to Shariah matters. The board must rely on the committee for issuing Shariah decisions related to engaging in Islamic banking activities. The committee shall perform the following tasks: 
 
1.It shall supervise the compliance of Islamic banking transactions with the Shariah principles and rules. Shariah compliance reports and internal Shariah audit observations should enable the committee to identify issues that require attention and, where appropriate, propose corrective measures.
 
2.It shall issue decisions on Shariah matters so that the bank can comply with the Shariah principles and rules.
 
3.It shall ensure that the Shariah policies and procedures developed by the bank are consistent with the Shariah principles and rules.
 
4.To ensure that Islamic banking products are Shariah compliant, the committee shall approve the following:
 
 a)The terms and conditions contained in the forms, contracts, agreements and other legal documents used in executing the transactions.
 
 b)The product manual, marketing advertisements, illustrative pamphlets and brochures used to describe the product.
 
5.The committee shall assess the compliance and internal Shariah audit work to ensure compliance with the Shariah aspects. Such assessment is part of the tasks related to submitting the reports on assessment of Shariah compliance.
 
6.The related parties of the bank such as its legal consultant, external auditors, or consultant entities may seek advice from the Shariah committee on Shariah matters related to the bank operations, and the committee shall provide the necessary assistance in this regard.
 
7.It shall inform the board, and recommend appropriate corrective actions, if it is proven to the committee that the bank has engaged in Islamic banking activities that are not Shariah compliant.
 
8.The committee shall inform SAMA of cases in which Shariah non-compliant activities are not effectively or adequately addressed or no corrective actions are made by the bank.
 
9.It shall prepare an annual report on the compliance of the banking Islamic activities of the bank with the Shariah principles and rulesand submit it to the board.