Agencies approve establishment of Shariah Oversight Board

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GOVERNMENT AGENCIES have approved the establishment of a Shariah Supervisory Board (SSB) in the Bangsamoro Autonomous Region of Muslim Mindanao (BARMM) to strengthen the regulatory environment for Islamic banking.

“The SSB will provide essential Shariah compliance oversight to enable Islamic finance to thrive in the country,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a statement.

The MoU and Joint Circular have been endorsed by PASB, the Ministry of Finance, the National Commission for Muslim Filipinos and the Bangsamoro Government.

“The main function of the SSB is to issue Sharia opinions on Islamic banking transactions and products within the BARMM. At the same time, the BSP, financial institutions and other stakeholders can request the SSB to provide Shariah opinions on issues related to Islamic banking and finance,” the BSP said in a statement.

The SSB can also be consulted by the central bank, financial institutions and other stakeholders for advice related to Islamic banking and finance.

The creation of the SSB is in accordance with Republic Act 11054 or BARMM Organic Law. Its provisions include the promotion of Islamic banking and finance in the region.

Mr Diokno said Republic Act 11439 or Islamic Banking Law gives the government leeway to convert the SSB into a national body “if warranted, such as where there is already a critical number of Islamic banking players in the financial system”.

Al Amanah Islamic Bank is the only Islamic lender operating in the country. It falls under the Development Bank of the Philippines.

Central bank officials said they have yet to receive formal applications from players wishing to venture into Islamic banking in the country. — Luz Wendy T. Noble

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