The Presidents/Chief Executive Officers
All Islamic Banks and
All Conventional Banks having Islamic Banking Branches

Dear Sir,

Shari’ah Governance Framework for Islamic Banking Institutions (IBIs)

              Please refer to IBD Circular No. 2 of 2008 wherein the Instructions and Guidelines for Shari’ah compliance were issued for Islamic banking institutions.

2. Keeping in view the developments taken place in the Islamic banking industry over the recent years, some of the instructions and guidelines have been revisited and a comprehensive Shari’ah Governance Framework is being issued. The primary objective of the framework is to further strengthen the overall Shari’ah compliance environment in the IBIs.

3. The framework (copy enclosed) explicitly defines the roles and responsibilities of various organs of IBI including the Board of Directors (BOD), Executive management, Shari’ah Board (SB), Shari’ah Compliance Department and Internal and External auditors towards Shari’ah compliance.

4. Accordingly the Sections A, B, C & D of Annexure-1 (Instructions) and Section I & II of Annexure-2 (Guidelines) of IBD Circular No. 2 of 2008 shall stand replaced with the enclosed framework whereas all other instructions contained in the said Circular shall remain the same.

5. The framework shall be applicable to all IBIs including Islamic banking branches of conventional banks w.e.f. 1st October 2014. The IBIs are advised to make all the necessary arrangements to comply with the requirements of the framework within given timelines.

           Please acknowledge receipt.