New requirement for Shariah committee members

They need to be either a certified Shariah advisor or certified Shariah practitioner when they seek reappointment

By HABHAJAN SINGH / Pic By ISMAIL CHE RUS

Shariah committee members will need to arm themselves with certified Shariah programmes when they seek reappointments at various Islamic financial institutions in Malaysia.

The Malaysian central bank will be imposing the requirement in its quest to boost the standing of the Shariah committees, a key component in ensuring Shariah compliance in products and services offered by banks and takaful players.

Bank Negara Malaysia (BNM) governor Tan Sri Muhammad Ibrahim said the central bank will make the certification a “pre-requisite for the appointment and reappointment of Shariah committee members”.

“This applies as well for key Shariah personnel in Islamic financial institutions, including Islamic windows. The aim is to ensure Shariah advisors and personnel are equipped with the necessary knowledge that transcends across various disciplines, including legal, finance and taxation matters. The timeline for compliance will be decided later,” he said in his speech at the recent dinner to celebrate the 20th anniversary of BNM’s Shariah Advisory Council (SAC).

The industry recently saw the launch of the Certified Shariah Advisors and Certified Shariah Practitioner programmes.

“The professional certification programmes will raise the bar for the industry by elevating the professionalism of Shariah advisors and upskilling competencies in the community,” he said when addressing Shariah scholars and other invited guests at the SAC celebration.

The event marking a major milestone for the Islamic finance industry in Malaysia was attended by Sultan of Perak Sultan Nazrin Muizzuddin Shah.

On the SAC, Muhammad said it has established itself as the “foremost institution in developing and expanding the tenets of Shariah for Islamic finance”, and has paved the way to resolve practical and contemporary issues confronting the Islamic finance industry through its more than 500 rulings.

The various rulings and its rationale, which touch on Shariah contracts like ijarah and murabahah, as well as supporting Shariah concepts like hibah and ibra, are captured in the newly released third edition of BNM’s “Shariah Resolutions in Islamic Finance”.

Under the Central Bank of Malaysia Act (CAB) 2009, which replaced the earlier 1958 legislation for the central bank, SAC is accorded the status of the sole authoritative body on Shariah matters pertaining to Islamic banking, takaful and Islamic finance.

Section 51(1) of the Act says BNM may establish an SAC on Islamic finance which “shall be the authority for the ascertainment of Islamic law for the purposes of Islamic financial business”. The position is further bolstered under Islamic Financial Services Act 2013.

On its deliberations, Muhammad has called on Shariah scholars to engage the world more openly.

“Issues of Shariah are complex and sometimes difficult to discern. But they are important, and matter very much to a wide range of stakeholders.

“Hence, in keeping with the changing landscape of the industry, engaging more openly and transparently about views and decisions will enhance understanding and acceptance. Views and opinions are man-made and should be challenged, questioned and debated through civil and intellectual discourse,” he said.