KARACHI, Oct 27: The State Bank has revised the Fit and Proper Criteria for appointment of Shariah advisers in banks. It has advised all the Islamic banking institutions to provide details of their Shariah advisers on a revised format within 15 days of the issuance of this circular.

According to the revised Fit and Proper Criteria issued by the Islamic Banking Department of the State Bank, the Shariah adviser must possess a degree from any recognized Waffaqul Madaris (Dares-e-Nizami) with a minimum of second class Bachelor Degree with Economics. Or, he must possess a degree from Waffaqul Madaris with Takhassus fil Fiqh (specialization in Islamic law) and sufficient understanding of banking and finance.

Alternatively, the Shariah adviser must possess a postgraduate degree in Islamic jurisprudence/ Usooluddin or LLM (Shariah) from any recognized university with exposure to banking and finance.

He must have at least three years experience of giving Shariah rulings; or at least five years experience in research and development in Islamic banking and finance. Reasonable knowledge of Arabic and English languages is necessary. The State Bank "at its sole discretion, can give relaxation in respect of educational qualification and experience in exceptional cases where the person is otherwise qualified for giving Shariah rulings on banking and financial matters," says the circular issued by IBD.

The Shariah adviser must have an impeccable track record in social, economic and financial dealings. "He has not been terminated or dismissed in the capacity of employee or director/chairman from any institution, firm or company."

Moreover, "he has not been associated with any illegal activity especially relating to banking business." He has also "not been in default of payment of dues owed to any financial institution and/or default in payment of any taxes in individual capacity or as proprietary concern."

The Shariah adviser "has not been convicted in any criminal offence or involved in financial impropriety and moral turpitude." He has not been subject to any adverse findings or any settlement in civil/criminal proceedings particularly with regard to investments, financial/business misconduct, fraud etc. He has not contravened any of the requirements and standards of regulatory system or the equivalent standards of requirements of any regulatory authorities. He has also "not been debarred for giving religious rulings by any religious institution/body."

The Shariah adviser of an Islamic Banking Institution must not be a Shariah adviser of any other Islamic Banking Institution. But "the conflict of interest shall not apply if a Shariah adviser is nominated by the SBP on its own Shariah Board."