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Duties of the Shari'aa Board at the RF Bank

The Shari'aa Board (or Council) is looked upon by the RF bank management, board of directors, and shareholders as an expert source on the law (Shari'aa) and its application in RF financial and banking transactions. The board of directors of the RF bank often appoints one of the Shari'aa Board members as a voting member of the board of directors of the bank in charge of overseeing the implementation of the law in the Board. The board of directors of the RF bank may also appoint one of its members to be a member of the Shari'aa Board, to serve as a liaison and a source of hands-on banking operations by a practitioner between the two boards. The following is an abbreviated list of duties for a typical RF bank's Shari'aa Board:

■ Detailed documentation of the recorded religious bases and foundations as extracted from the law (Shari'aa), with a complete record of the Shari'aa Board's deliberations and the reasons for and against a specific fatwa (edict) ruling. These proceedings, ideally, should be made transparent.

■ Help in the process of innovating, manufacturing, and devising new Shari'aa-based RF banking and finance products and services with the banking professionals.

■ Help in devising a detailed set of operating manuals and RF transactional procedures that will make the RF bank services competitive with existing riba-based banking services and products.

■ Review and analysis of any contracts and/or agreements related to the services, operations, or outside vendors of the RF bank, to make certain that such agreements comply with the law.

■ Participation in the design of the RF bank's training programs, including education about the foundations of the faith, the rules on compassion and honesty, the importance of fair and equal rights without discrimination, and the character of an RF banker who shuns misrepresentation of facts and the culture of pure selling at any cost to meet a sales goal and make a high commission.

■ Participation in a hands-on training program on Shari'aa compliance, including the RF finance models used and how these models differ from those offered by the conventional riba-based banks.

■ Supervision of the RF bank's day-to-day operations, interaction with the staff and customers, and pursuit of the highest quality of work in processing customers' applications and communicating with the outside world regarding truthful representation of the RF products and services offered by the RF banking staff. This includes random checking of incoming and outgoing mail and faxes, telephone conversations on help lines, and incoming and outgoing e-mails.

■ Attention to developments pertaining to Shari'aa issues and new products and services at other competing RF banks, as well as riba-based banks.

The Shari'aa Board is required to submit a complete annual report to the board of directors of the bank, summarizing all the issues referred to the Board, as well as the Board's opinion on the bank's transactional procedures.

 
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