The Higher Shari’ah Authority for financial and banking activities in the UAE held its second meeting for the year 2020, where it adopted its report for the year 2019 and discussed COVID-19's effects on the economy. The Authority approved a set of Shari’ah parameters to mitigate its impact on affected individuals and companies in light of the pandemic. 

The authority also urged Islamic financial institutions to join their efforts in supporting sectors and individuals affected by this pandemic. It issued Shari’ah parameters related to the postponement of installments for Islamic financial institutions’ customers and how to deal with such postponement from a Shari’ah perspective based on the type of the transactions and their Shari’ah contracts.

The meeting was chaired by His Eminence Sheikh Dr. Ahmed Bin Abdulaziz Al Haddad, the Chairman of the HSA, and attended by Their Eminences the members of the HSA: Sheikh Prof. Dr. Jassim Ali Al Shamsi, Sheikh Issam Muhamad Ishaq, Sheikh Dr. Aznan Hasan, and Sheikh Dr. Usaid Muhammad Adeeb Al Kilani.

Moreover, the HSA has reviewed its agenda and adopted some Shari’ah standards and parameters for calculating of the collections costs incurred by Islamic financial institutions from late payment transactions. The HSA also discussed issues related to the imposition of fees on loan based transactions, where HAS instructed to conduct consultation with Islamic Banking Committee of the UAE Banks Federation, to identify best practices in this regard.

The HSA also reviewed requests for new financial products submitted by some Islamic financial institutions, and approved the applications that comply with the applicable Sharia standards. The HSA stressed the need to strike a balance between development and innovation in Islamic financial products and the regulatory and Shari'ah requirements.

Furthermore, HSA reviewed the requests submitted by Islamic financial institutions regarding the approval of annual Shari’ah reports, the appointment of members of the Internal Shari’ah Supervision Committees, and the heads of the Internal Shari’ah Control and Shari’ah Audit Departments, and issued resolutions in this regard.

To further improve the role of Internal Shari'ah Supervision Committees in Islamic financial institutions, the HSA was instructed to prepare a Charter template for the Internal Shari'ah Supervision Committees based on best practices and to initiate a consultation about it with Islamic financial institutions.

WAM