The President/Chief Executive,
All Banks,

Dear Sir/Madam,

FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS

       Please refer to Para 2 of IBD Circular No. 2 dated March 20, 2007 in terms of which a period of six months was allowed to Shariah Advisors of Islamic Banking Institutions (IBIs) who are working in an executive/non-executive position in another financial institution, except working as Shariah Advisor of mutual fund of the same IBI, to regularize the position by relinquishing either of the posts.

2.       For the purpose of Fit & Proper Criteria for Shariah Advisors, Takaful companies shall be included in the definition of financial institutions.

3.        The existing period by which Shariah Advisors were required to regularize their position as indicated in para 1, has now been extended till June 30, 2008. Therefore, Shariah Advisors working for an IBI and holding any executive/non-executive position in any other financial institution, except as Shariah Advisor of Islamic mutual funds of the same IBI, shall now be required to regularize the position and relinquish either of the posts by June 30, 2008.

4.        All Islamic banking institutions are required to submit a compliance report from Shariah Advisor of their bank to this effect till July 7, 2008.

5.       Please acknowledge receipt.