SBP updates guidance for Islamic banks' external audits

SBP updates guidance for Islamic banks’ external audits: HumSub.TV

SBP updates guidance for Islamic banks’ external audits: HumSub.TV: Pakistan’s central bank has updated guidance on sharia governance for Islamic finance institutions, expanding the scope of external audits to help mitigate conflicts of interest and increase transparency.

There are growing calls across the Islamic finance industry to strengthen the certification process of Islamic banks and their products to improve the consumer appeal of the sector.

Religious scholars who members of an Islamic bank’s sharia board are now barred from serving in any external audit firm, the State Bank of Pakistan said in a circular that complements original guidance from 2015.

External sharia audits, which review operations to determine whether Islamic banks are operating in accordance with Islamic principles, would also have to cover pool-management practices and technology systems.

This includes the way Islamic banks calculate distribution of profit and loss to depositors, the tracking of assets, and the allocation of income and expenses.

The move is designed to separate the verification of profit and loss distribution between the banks and the external auditors, in contrast to the joint verification that was allowed under earlier guidance.

Fit and proper criteria must also be applied to scholars serving as part of an external audit, the central bank said.

While Pakistan is the world’s second most populous Muslim nation, its Islamic finance sector is struggling to gain market share from conventional peers despite double digit growth.

The sector includes five full-fledged Islamic banks and 16 conventional banks offering Islamic financial products, which held a combined 1.85 trillion rupees ($17.7 billion) of total banking assets as of December, reflecting an annual growth rate of 15.1 percent.

This gave Islamic finance a market share of 11.7 percent of total banking assets versus the 11.4 percent the sector held a year earlier.

SBP updates guidance for Islamic banks’ external audits: HumSub.TV

About HumSub TV
HumSub TV is Pakistan’s leading forwarding-thinking, edutainment channel, aimed at promoting and upholding peace, interfaith harmony and social responsibility within Pakistan through informative and insightful programmes and documentaries; analytical interviews on issues pertaining to social, economic, legal and environmental set-up; dedicated shows to canvass and thereby promote the culture and heritage of Pakistan and in-depth coverage of national and international news.

HumSub TV is the first channel and thus a pioneer within its own right that mainly focuses on emphasising the “Rights” as well as the “Obligations” of the citizens in light of the Constitution of Pakistan, numerous International declarations signed by the Government and various laws that have been promulgated over the years but are not in the knowledge of the common citizen.
HumSub TV also aims to enter into bilateral agreements with other countries to promote not only their culture, heritage and tourism, but also their educational and medical facilities.
Following the successful launch of HumSub TV’s head office in Blue Area, Islamabad; the bureau office has been set up in Lahore.

To project positive image building of Pakistan and inculcate nationalism, as per the vision of the founder of the nation, Quaid-e-Azam Mohammad Ali Jinnah.

HumSub TV is resolute about the promotion of a pluralistic, inclusive and egalitarian society in Pakistan where all citizens are allowed to contribute to promote interfaith harmony, peace and collective wisdom in the social, political and economic development of Pakistan and to encourage critical and lateral thinking in the society. HumSub TV strives to make a positive contribution to this end.

HumSub TV’s Theme
HumSub TV, Pakistan’s first EDUTAINMENT Channel, has been set up for not only those audience residing in Pakistan or overseas but the international community on the whole. The vision of the channel is to project positive image building of Pakistan and inculcate nationalism as per the vision of the founder of the nation.

HumSub TV strives to make a positive contribution to this end by promoting pluralism, inclusiveness and egality in Pakistan and give voice to the suppressed. It endeavors to act as a positive catalyst for social change and Pakistani nationalism. It envisions providing a platform for airing critical and lateral thinking and collective wisdom by inviting positive minded intellectuals and opinion forming individuals for the promotion of interfaith harmony and peace in the social, political and economic development of Pakistan.

Whereas the channel airs upbeat edutainment programmes, it, nonetheless, has the primary objective of countering negative anti-Pakistan regional and international propaganda as well as advancing fundamental rights as encapsulated in the Constitution of Pakistan.

For More News:
Visit HumSub TV

Leave a Reply