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Annual Report 2021
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Annual Report 2021
Sharia Supervisory Board
Sharia Supervisory board

A specialized board of Sharia scholars which is elected by the Bank's general body. Sharia supervision is a prominent and distinctive feature of the Palestine Islamic Bank’s activities controlling and developing the Bank’s business in accordance with Sharia’s provisions and ensuring that the Bank's business and activities are carried out in accordance with the principles of Islamic Sharia.

Sharia Supervisory board References
  • The decisions, directives and circulars approved and issued by it.
  • The standards of the Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain.
  • Decisions, fatwas, and recommendations of seminars, councils and juristic forums are considered and approved by the Bank's Sharia Supervisory Board in relation to the Bank’s operations.
Scope of the Sharia Supervisory board

The Board has the right to fully access, without restrictions, all records, transactions and information, including those of the Bank’s employees and consultants. The board relies on the instructions of the Palestinian Monetary Authority according to banking law and sharia standards and the rules and best practices for the governance of banks in Palestine issued by the Palestinian Monetary Authority.

The decisions of the Board within its purview, and which do not contradict with the powers of the Supreme Sharia Supervisory Board founded by the Palestinian Monetary Authority, are obligatory on the Bank. In this regard, the decisions of the Board on the Bank’s transactions and activities are enforceable.

Tasks of the Sharia Supervisory Board
  • Directing, monitoring and supervising the Bank’s business and activities to ensure compliance with Islamic Sharia.
  • Ensuring that there is a sound and effective internal Shari'a supervisory system that ensures the application of Islamic Sharia.
  • Examining the Bank’s compliance with the provisions of Islamic Sharia in all its activities.
  • Providing guidance and training to the Bank's employees on compliance with Islamic Sharia.
  • Expressing opinions on the extent of the Bank’s commitment to the provisions of Islamic Sharia and publishing them before the Bank’s general assembly and in its annual report.
Working mechanism of the Sharia Supervisory president:
  • The Board meets at the invitation of its chairman or at the invitation of the Bank management when necessary.
  • The Board holds twelve regular meetings a year, one meeting each month.
  • The Board receives enquiries from the executive management and from the Bank’s branches through the Bank’s Sharia Auditing Department, and it duly responds to them.
Sharia Auditing

The Shari'a Auditing department is one of the Bank's important supervisory departments, and it follows the work of the Shari'a Supervisory Board appointed by the Bank’s general authority. It is independent from the executive management in performing its work and has the right to view all documents, contracts, agreements, models and policies of the Bank with full support from the Board of Directors, executive management, and the Sharia Supervisory Board in order to achieve the Bank's goals and avoid risks in accordance with the Sharia and approved governance standards.

Main objectives of the Sharia Auditing Department:
  • Verifying that the Bank’s management has fulfilled its responsibilities towards implementing the provisions and principles of Islamic Sharia in accordance with the approved Sharia standards.
  • Verifying the suitability, adequacy, and effectiveness of the internal Sharia control system.
  • Verifying that any activity, product, service, or contract carried out by the Bank is authorized by the Sharia Supervisory Board.
  • Achieving the integrative supervisory role with other supervisory departments with the aim of achieving an effective regulatory system.
Tasks of the Sharia Auditing Department:
  • Reviewing the instructions and work procedures issued by the Bank’s management in light of the Sharia’s Supervisory Board decisions.
  • Preparing for the regular meetings of the Board and following up the implementation of its decisions and recommendations.
  • Carrying out field Sharia audit tours on a regular basis and submitting audit reports to the Sharia Supervisory Board.
  • Participating with the Board in scientific meetings and seminars and communicating with the public effectively.
  • Preparing the Department's business plan annually, revising work instructions and procedures and seeking approval of them by the Sharia Supervisory Board, which in turn evaluates the performance of the Department and its employees within the approved annual plan.
Sharia Supervisory Board Members
His Eminence Dr. Alaa Sobhi Razia
Chairman of the Sharia Supervisory Board

•He obtained a doctorate in financial economics from the University of Santiago de Compostela - Spain - in 2016. He also holds a master's degree in Islamic banking from Yarmouk University, Jordan, in 2007 and another master's degree in economics from the University of Texas, USA in 2010. He has a bachelor's degree in Jurisprudence and Legislation from An-Najah National University in 2005. •He is currently serving as Head of the Islamic Banking Department at An-Najah National University, and is the Head of its Master's Program in Islamic Finance. He is a Sharia advisor in Palestine Ijarah Company, and a member of PIB’s Governance Committee. •He was awarded the Scientific Research and Publication Quality Award for 2019 and 2020 and has published several banking studies in prestigious international scientific journals.

His Eminence Dr. Ayman Jibreen Jweleis
Member of the Sharia Supervisory Board

•He obtained a doctorate in Islamic law from Cairo University - Faculty of Dar Al Uloom in 2011. He is a supervisor of Islamic education, and a part-time faculty member at the College of Sharia at Hebron University. •He holds international scientific and professional certificates in the jurisprudence of Islamic banking, including the Certified Sharia Auditor and Controller (CSAA) and the Certified Islamic Arbitrator & Expert (CIAE). He is a member of the International Zakat Organization. •He took part in several local and international scientific events and conferences in Islamic jurisprudence and its developments. •He published many books, studies and researches in the jurisprudence of transactions, the principles of jurisprudence and Sharia purposes. He is an arbitrator, expert and legal advisor in settling financial disputes.

His Eminence Prof. Maher Hamed Al Houli
Member of the Shari'a Supervisory board

•Professor in the field of Jurisprudence and its Fundamentals. Serves as the dean of the College of Sharia and Law at the Islamic University, Gaza, the head of the Sharia Fatwa Department at the Association of Palestine Scholars, the chairman of the Fatwa board at the Islamic University, Gaza, the president of Al Quds Association for Research and Islamic Studies, and the dean of Student Affairs. He has also carried out Sharia and financial arbitration. •Supervises master's and doctoral theses and holds a scientific research award - the Islamic Studies Series for the year 2008. •Has published many books and scientific literature which are used at universities for undergraduate and master's degree studies and has published many varied and published scientific research papers.

Sharia Supervisory Board Report for the year 2021

Presented to the shareholders of the Palestine Islamic Bank

May the peace, mercy and blessings of Allah be upon you,

Distinguished shareholders,

According to the assignment letter, we have monitored the principles and contracts related to the transactions and applications of PIB during the financial period 01/01/2021 until 31/12/2021.

We have undertaken due diligence to express our opinion on whether the bank has complied with the provisions and principles of Islamic Sharia as well as with specific fatwas, resolutions and guidelines issued by us.

We have carried out our monitoring, which included examining the bank’s documentation and procedures. We tested each type of operation based on a chosen sample, made observations and verified compliance with the approved Sharia principles.

We planned and carried out our monitoring in order to obtain all information and interpretations which we considered necessary to provide us with sufficient evidence to give reasonable assurance that the bank has not violated the provisions and principles of Islamic Sharia.

PIB’s management is responsible for the bank’s conduct of business in line with the provisions and principles of Islamic Sharia, and the responsibility of the Sharia Supervisory Board is to form an independent opinion after carrying out an audit and the monitoring work required to present the following report to you:

One: The Supervisory Board reviewed the bank's activities carried out between 01/01/2021 and 31/12/2021.

Two: The Supervisory Board answered all questions and inquiries submitted by the bank’s management during that period.

Three: The Supervisory Board provided some notes and corrections to the transactions, agreements, and business models it reviewed.

Four: The Supervisory Board reviewed and discussed the Sharia audit reports of branches and offices submitted by the Sharia Audit Department and provided its recommendations and observations, noting the presence of a number of recurring observations on the financing work in some branches. It stressed the need to avoid the repetition of such observations in the future.

Five: The Supervisory Board approved and reviewed a set of sponsorship and cooperation agreements with various companies and institutions, and approved a set of products, models and contracts, including:

  • The Supervisory Board approved the investment agreement with the Turkish Bank.
  • It approved the savings campaign (Over 100… new prize with each draw) provided all the advertising material is presented to the Sharia Supervisory Department before publication and implementation.
  • It approved the application form for an electronic card, as well as the electronic card contract.
  • It approved the agreement with the SIDA Foundation.
  • It approved the disbursement of what is available from the Illicit Gains Fund to the entities that were included in the list submitted by the public administration of annual support for institutions for 2021.
  • It approved the Islamic investment certificate product.
  • It approved the wage bulletin for services and products (fifth edition).
  • It approved the forms, contracts and procedures of the Islamic investment certificate product.
  • It approved the financial statements for the second half of 2021.
  • It approved the plan and budget of the Sharia Audit Department for 2022.
  • A Sharia auditor was appointed for branches in the center, and a Sharia auditor was appointed for transactions prior to their implementation.
  • It reviewed the internal audit report which reaffirmed the need for branches to adhere to the approved work procedures and to respect the Sharia audit reports.
  • It approved the program for sustainable microfinance.
  • It reviewed the report of the second half of the year and the observations therein on regulations and urged branches to commit to addressing shortcomings.
  • It approved the investment in the sukuk of Dubai Ports and the sukuk of the Saudi Electricity Company.
  • It approved the salary scale agreement which will be signed with EY.
  • It approved the commissions and wages bulletin "the sixth edition" on the new world/platinum cards.
  • A draft of the Sanad Fund Agreement was presented to the members of Supervisory Board for review and it was approved.

Six: The Supervisory Authority conducted several trainings for PIB’s employees, as part of a series of meetings aimed at raising awareness and understanding of Islamic financial transactions. The Sharia education plan in the Gaza Strip was completed.

In our opinion:

  • The Supervisory Authority reviewed the contracts submitted and made the necessary amendments. The contracts, operations and transactions carried out by PIB during the period under review were consistent with the provisions and principles of Islamic Sharia.
  • All gains emanating from sources or methods prohibited by Islamic Sharia, or in violation of Sharia standards, fatwas and rulings, have been moved to the charity fund to be spent on charitable causes in line with the recommendations of the Sharia Supervisory Board.
  • PIB abides by the decisions of the Sharia Supervisory Board and the Higher Sharia Supervisory Board.
  • There was no objection to the method adopted by the Board of Directors according to which each shareholder shall pay their zakat themselves. The percentage of zakat due on each share was calculated (5.69% per share), provided the shareholders are notified of this. The Board calls on everyone to pay their zakat themselves in line with Sharia law.

The Sharia Supervisory Board thanks the bank and its shareholders for their trust. It also thanks the bank’s management and employees for their good cooperation. May Allah reward everyone.

Allah shall remain the guide to the right path

Thursday 30 Rajab 1443 AH corresponding to 03/03/2022 AD

Dr Alaa Soubhi Rozia
Dr. Maher Hamed Al-Hawli (Member)
Dr. Ayman Jibreen Jweleis (Member)
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