The Presidents/Chief Executives of Islamic Banks and

Conventional Banks having Islamic Banking Branches

Dear Sir/Madam,

FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS

Please refer to IBD Circulars No.2 and 4 dated March 20, 2007 and August 16, 2007 respectively on the above subject.

2. With a view to facilitate the Islamic Financial Industry, it has been decided to revise Para 7 (a) & (b) of Annexure to IBD Circular No.2 of 2007, regarding “Conflict of Interest” as follows:

a) The Shariah Advisor of an Islamic Banking Institution (IBI) shall not work in any other IBI in any capacity whatsoever. Additionally, in the spirit of good corporate governance, no Shariah Advisor shall approve a transaction from both sides representing two financial institutions.

b) Shariah Advisor of an IBI shall not hold any executive/non-executive position in any other financial institution, except working as member Shariah Board/Committee of other financial institution(s).

3. Other instructions on the subject shall remain unchanged.
4. Please acknowledge receipt.