BB governor pledges 'full protection' for Shariah boards to ensure banking integrity

Shariah board members will be given full protection and
allowed to work independently to restore discipline in the country's Islamic
banking sector, Bangladesh Bank Governor Md Mostaqur Rahman has said.
"You,
the members of the Shariah boards, will work independently; full protection
will be provided to you by the central bank," he said while presiding over
a high-level meeting at the central bank headquarters recently.
The
meeting, titled "Current Status, Challenges, and Future Way Forward of
Islamic Banking," brought together members of the newly formed Bangladesh
Bank Shariah Advisory Board, chairmen of Shariah boards from Islamic banks, and
leading Islamic scholars and academics.
This was the first time a Bangladesh Bank governor sat with
top Shariah experts.
In
his opening remarks, the governor said money laundering had occurred in several
Islamic banks in the past due to weak supervision.
He
said Islamic banking is designed to be asset-backed, and such losses should not
occur if the system is implemented properly.
"The
fact that losses occurred is a matter of deep concern for us," he said,
adding that empowering Shariah boards is key to ensuring effective oversight.
During the meeting, scholars and experts presented several recommendations to
strengthen governance.
They
called for a dedicated Islamic Banking Act and the appointment of a separate
deputy governor and executive director at Bangladesh Bank to oversee the sector.
They
also proposed granting Shariah supervisory committees legal independence from
bank boards and requiring the consent of at least three Shariah board members
for approving large investments.
Participants
recommended ensuring Shariah supervisors can work free from management pressure
and strengthening audit systems.
They
also suggested developing a Shariah governance framework, establishing a
research centre, and improving capacity through training and certification in
Islamic finance.
The
meeting discussed five troubled Islamic banks under the United Islamic Bank
umbrella.
Scholars
urged the central bank to recognise the share value of existing shareholders
and provide liquidity support on easier terms.
The
governor said banks and hospitals should operate as service-oriented
institutions without political interference.
He
also expressed interest in hosting international Islamic finance conferences in
Bangladesh.
















