The Presidents/Chief Executives,
All Banks,

Dear Sir / Madam,

FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS

In supersession of IBD Circular No.3 dated October 26, 2004 a revised ‘Fit and Proper Criteria for Shariah Advisors of Islamic Banking Institutions’ and SAP-Form are being introduced with immediate effect. The attached revised guidelines/formats shall henceforth be used by all IBIs desiring to appoint a Shariah Advisor for related evaluation and submission of information to SBP for prior clearance.

2. In terms of the revised criteria, inter alia, Shariah Advisor shall not hold any executive/non-executive position in any other financial institution, except working as Shariah Advisor of Islamic mutual funds of the same IBI. In case Shariah Advisor of an IBI is already working on some executive/non-executive position in any other financial institution, except as Shariah Advisor of Islamic mutual funds of the same IBI, the position should be regularized within a period of 6 months hereof by relinquishing either of the posts.

3. In order to update the database of Shariah Advisors of IBIs in Pakistan, all the existing IBIs are advised to submit information about their Shariah Advisor in the format provided in revised SAP-Form, within 30 days of issuance of this circular.

4. Moreover, Shariah Advisors of all IBIs will sign a declaration as per enclosed format before assuming office. The declaration be kept on record with the IBI. For existing Shariah Advisors, the declaration as per enclosed format must be obtained immediately and placed on record. Please confirm compliance of the foregoing within 30 days from the date of issue of this circular.

5. Please acknowledge receipt.

Encl:
F&P Criteria
SAP-Form
Annexure