Compliance with Islamic Shariah rules is the cornerstone of Islamic financial institutions from other traditional financial institutions. This is the main aspect that many clients of Islamic financial institutions seek. Therefore, Islamic financial institutions should have mechanisms that enable them to subject their financial and non-financial transactions And the lack of commitment of financial institutions will lead to many negative results, including the following:
- Loss of confidence of customers because confidence is the main officer of all transactions, both financial or service.
- Loss of a large part of the market share represented by depositors and applicants for financing.
- The situation of the management of Islamic financial institutions in the embarrassment of violations due to lack of interest in the application of Shariah controls.
- Harming the interests of all parties associated with Islamic financial institutions and thus affecting all communities of society as a whole.
- Undermining the reputation of the Islamic banking industry and destroying its successes.
Islamic banks seek to analyze and evaluate all internal factors and external factors with the main objective of identifying the strengths, weaknesses, opportunities and threats surrounding them and working to reduce the risks surrounding the Islamic banking industry. The researcher can reduce the risks resulting from non-compliance with Shariah ) Through the development of a comprehensive framework that contributes to reducing these risks taking into account the internal and external environment factors. The dimensions of the framework are as follows:
First: - Sharia supervision systems
The role of Islamic banking institutions and institutions in the incorporation of standards and guidelines for the process of Shari'a supervision. Several studies also dealt with the development of an integrated approach to Shari'ah supervision in Islamic banks. The researcher believes that in order for the Shari'ah supervision process to take place,
The previous control: ** It is the study and research issues referred to the Shari'ah Supervisory Board before implementation to give an opinion on the legitimacy and indicate the extent of its approval of the provisions and principles of Islamic law, and this is a real implementation of the principle of consultation in Islam, which achieves preventive censorship.
Concurrent control: The internal supervision department of the bank ensures that all operations in the bank are carried out in the light of Shari'a controls and resolutions approved by the Shari'a Supervisory Board, so that it can observe the deviations at the time of occurrence and work to limit them. Concurrent or accompanying.
Subsequent Control:The following are:
Subsequent Internal Control: The Shari'a Supervisory Board monitors the operations reviewed by the Internal Shari'a Supervisory Department after completion and completion to ensure that they are performing their business in the light of the Islamic Shari'ah rules and regulations issued by them and the Islamic financial transactions councils and recommendations. Shari'a Supervisory Board.
Subsequent external control:
It is the activation of the central banks to the role of the central Shari'ah supervision to carry out the legal supervision of the activities of the Islamic institutions and banks affiliated to them and their decisions are in line with the laws issued in the State and have the obligatory status,
Second: The human element
The workers of the Islamic banks commitment controls and provisions of Islamic law and their familiarity with the nature of the work of Islamic banks of the most important causal factors in legitimate risk occurring because they are the executive arm of the work and researcher believes that it can reduce the legal risks arising from the human element through attention to the training of scientific and practical workers of Islamic banks, especially In the field of Shari'a supervision.
For the scientific qualification of employees of Islamic banks and Shari'a supervision
Must be employed Islamic banks qualified scientifically qualified commensurate with this range that includes this qualification is mainly the following: -
1. Basic scientific qualification must be graduates of trade and knowledge of the faculties of materials accounting, auditing, supervision, administration, banks, money, trade, statistics, markets, financial analysis, costs, and the like technical sciences that give accounting, commercial and financial knowledge basics.
2. Degree Specialist in Islamic Banking: must not scientific qualification on the first university degree is only limited, but it requires specialized complementary studies, and have knowledge of the Islamic economy and the various branches, and in-depth knowledge about the nature of Islamic banking activities (funding formulas, methods investment, sources and uses of funds, banking services, administrative and marketing aspects ....), and assets accounting for Zakat and sources of this knowledge: graduate studies in Islamic economics and Islamic banks, or to participate in training courses organized by the authorities and Professional organizations responsible for how the Islamic banking business performance.
He must have knowledge of the jurisprudence of transactions in general and the legal adaptation of banking transactions carried out by Islamic banks in particular, and it is not enough to have studied at the university only, but must study and understand what has been issued in this regard of the mosques and centers of jurisprudence and fatwa bodies Islamic banks of fatwas Decisions and recommendations, in particular the AAOIFI report and the guidelines issued by the Islamic Financial Services Board (IFSB).
For the practical qualification of employees of Islamic banks and Sharia supervision
Islamic thought includes the issue of practical rehabilitation within the duties of the eye (or in-kind duties), which obligates all members of the profession to comply with the requirements of the highest degree of efficiency and commitment, and even considered the issue of the necessity of preserving the interests of the nation and its money from loss and loss on the one hand, One of the sources of Islamic legislation), which explains the need to adopt the established professional practice in the field of scientific rehabilitation, and consider that the duties of the legitimate members of the profession on the other hand, and there is a need for the competent professional authorities to establish conditions and controls to ensure seriousness And the adequacy and effectiveness of practical training, in terms of conditions and specifications to be available in training and the process of gaining practical experience, and the scientific and practical efficiency of the training.
In light of the above, the Islamic banking industry can take the necessary measures to support the scientific and practical rehabilitation to reduce the legitimate risks through the following:
- Continuous cooperation between banks, institutions and institutions interested in Islamic banks to organize conferences and symposia and specialized in Islamic banking transactions.
- Setting the necessary controls and standards for the selection of new employees in Islamic banks.
- Develop plans for continuous training for employees in Islamic banks at all levels
- Selection of practical and scientific experience in senior management positions at the bank.
- Setting the rules concerning promotion systems for employees of Islamic banks, provided that they are in the light of scientific and professional experience and after undergoing the necessary tests.
For the employees of the Shariah Board and the internal Shari'a Supervisory Board:
- Setting standards for evaluating the performance of employees in the Sharia'a and internal Shari'a Supervisory Board, provided that the evaluation is carried out at least annually.
- Subjecting the employees to the internal legal supervision at the bank for specialized and periodic examinations before and after the appointment, while obtaining specialized training courses on a permanent basis.
- The Sharia Supervisory Board should include a member who is familiar with all aspects of Islamic banking.
The members of the Shari'a Supervisory Board and the internal Shari'a Supervisory Board must be convinced that their views and decisions are subject to the influence and pressures of the opposing interests, such as the ethical rules of accountants and auditors of Islamic financial institutions and the ethical rules for their employees. Issued by the Accounting Organization for Islamic Financial Institutions, legal observers should be fully independent in both real and apparent.
Several Islamic financial institutions and institutions dealt with the issue of the independence of the Shari'a Supervisory Board and the internal Shari'a Supervisory Authority and the establishment of many controls to preserve them in order to achieve many objectives including:
- Enhancing the confidence of customers with Islamic financial institutions in their commitment to the application of the provisions and principles of Islamic law.
- Achieving the basic objectives of the Islamic financial institution by enhancing the independence and objectivity of the Shari'a Supervisory Board.
In light of the above, Islamic financial institutions must observe the guidelines and guidelines issued by the Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Council to maintain the independence of its Shari'ah Board and the internal Shari'a supervision, including the following:
- The need for the supervisors to evaluate the periodicity of the periodicity of their independence and to identify any situations that may relate to impeding the independence and presentation to the Shariah Committee.
- The members of the Shari'a Supervisory Board should not have any relationship or affiliation with any administrative decisions in the management of the financial institution, or any of its members have a relationship or relationship with the Islamic financial institution or companies related to it.
- The institution shall have appropriate procedures and procedures to resolve the difference of opinion between the Board of Directors and the Islamic Shari'a Board.
The researcher believes that all developments surrounding the Islamic banking industry should be monitored in order to reduce the risks that may occur as a result of not keeping pace with those developments. The development of the Islamic banking industry should also study the requirements, needs and practices And to provide appropriate and appropriate solutions to the Islamic Sharia in all aspects related to Islamic banks, whether in the form of financing and banking services on a continuous basis, and can help Islamic financial engineering in this area and It is a collection of activities that includes the design, development and implementation of innovative financial instruments and processes as well as the formulation of innovative solutions to financing problems, all within the framework of the Shari'a guidelines. It includes the following elements:
1. Creating new financial instruments.
2. Creating new funding mechanisms.
3. Innovating new financing management solutions, such as liquidity or debt management, or developing financing formulas for specific projects that fit the circumstances surrounding the project.
4. The innovations mentioned above, whether in instruments or financing clients, shall be in accordance with the Shari'ah, with the greatest possible deviation from jurisprudential differences, which is characterized by legitimate credibility