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Ministry of Justice

Republic of Tajikistan 

 On June 30, 2017 No. 890

Approved by the Resolution of Board of National Bank of Tajikistan of June 2, 2017, No. 61

Procedure for creation of Committee on Islamic financial services, powers and requirements to his members

The procedure for creation of Committee on Islamic financial services, powers and requirements to his members (further - the Procedure) is developed according to article 27 of the Law of the Republic of Tajikistan "About Islamic banking activity" and establishes procedure for creation by Islamic credit institutions of Committee on Islamic financial services, powers and requirements to his members. 

Chapter 1. General provisions

1. The committee on Islamic financial services (further - Committee) is collegiate and independent organ.

2. The purpose of Committee is ensuring compliance of activities of Islamic credit institution to standards of Islamic banking activity.

3. The committee in the activities is guided by the Law of the Republic of Tajikistan "About Islamic banking activity", other laws of the Republic of Tajikistan, regulatory legal acts of National Bank of Tajikistan and this Procedure.

Chapter 2. Procedure for creation of Committee

4. The committee is established by the Supervisory board (Board of trustees) of Islamic credit institution (further - the Supervisory board (Board of trustees) according to the charter of Islamic credit institution.

5. The committee is directly accountable to the Supervisory board (Board of trustees) and on regular basis provides information on respect for the principles of Islamic financing in Islamic credit institution.

6. Members of the committee and its chairman are appointed by the Supervisory board (Board of trustees) for a period of 2 years. The committee consists of at least than three members who can be re-elected during subsequent periods. Members of the Supervisory board (Board of trustees), the chairman and board members of Islamic credit institution cannot be members of the committee.

8. Conditions and the size of the salary of members of the committee are determined by the Supervisory board (Board of trustees).

9. The member of the committee shall be the physical person. The company, the organization or bodies according to the purposes of this Procedure cannot be members of the committee.

10. Candidates on members of the committee shall answer the following criteria:

- have the higher education (economic and legal);

- professionally suitable and reliable person; 

- have sufficient knowledge in the field of the bank (Islamic) law and regulatory legal acts of National Bank of Tajikistan;

- have knowledge in the field of Islamic financing with supporting documents (the certificate, the diploma, the certificate);

- at least three-year length of service in the specialty in bank system; 

- at least two thirds of members shall have the higher education in the field of sharia sciences, especially in the field of fiqh of transactions.

At the same time the member of the committee shall not:

- be the borrower of Islamic credit institution whose total debt exceeds 2% of the size of its regulatory capital;

- be the member of executive body (Supervisory board) of the legal entity who is borrower of Islamic credit institution and which total debt exceeds 10% of the size of the regulatory capital of Islamic credit institution;

- exercise control of one or more legal entities having common interests with Islamic credit institution and/or the total debt of which before the Islamic credit institution or legal entities having common interests with Islamic credit institution is considered as total debt of one person, according to requirements of National Bank of Tajikistan;

- have debt on the credit obtained in Islamic credit institution, classified as "hopeless";

- be the member of executive body (Supervisory board) of the legal entity who obtained the credit in Islamic credit institution or at any legal entity having common interests with Islamic credit institution who was classified as "hopeless";

- be the close relative of the member of the Supervisory board (Board of trustees) and Board of Islamic credit institution;

- work in any conventional credit institution or other Islamic credit institution, except for affiliated society;

- be the member of the Supervisory board or the shareholder (participant) of other conventional credit institution or Islamic credit institution; 

- be the chairman or the board member of other conventional credit institution and Islamic credit institution;

- be the government employee (except for the state Islamic credit institutions). 

Chapter 3. Powers of Committee

10. The committee has the following powers:

- determines internal acts of Islamic credit institution regarding compliance to the principles of Islamic financing;

- approves all banking products used in Islamic credit institution; 

- participates in determination of the main activities of Islamic credit institution;

- determines the proper mechanism of control of current transactions of Islamic credit institutions regarding their compliance to the principles of Islamic financing;

- approval of the directions for which charitable funds will be allocated;

- in case of execution of the powers, the Committee in the annual financial report shall provide disclosure of information on compliance of transactions of Islamic credit institution to requirements of the principles of Islamic financing;

- demand from executive body necessary information for execution of the powers. The executive body bears responsibility for provision of unreliable information. If the information required is not provided in Committee, the Committee addresses the Supervisory board (Board of trustees) for acceptance of adequate measures; 

- attracts the relevant structural divisions of Islamic credit institution to execution of the powers;

- will fix all cases of non-compliance with the principles of Islamic financing after become known, and reports about them to the Supervisory board (Board of trustees);

- consideration revealed and provided by internal audit (service of komplayens or the komplayens inspector) information on discrepancy of any transaction (product) or transaction to the principles of Islamic financing;

- about discrepancy of any transaction (product) or transaction to the principles of Islamic financing makes Observant council (Board of trustees) recommendations for correction and if it is not subject to correction, offers prohibition on such transaction (product) or transaction or provides to Islamic credit institution of consultation for acceptance of remedial measures or elimination of the occurred case;

- if cases of non-compliance with requirements of the principles of Islamic financing are not considered in the due and effective way, or for this purpose the Islamic credit institution will not take remedial measures, Committee to report about it to National Bank of Tajikistan;

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