BSP Circular No. 1070, Series of 2019, Shari'ah Governance Framework for Islamic Banks and Islamic Banking Units
The Shari'ah Governance Framework (SGF) for Islamic Banks (IB) and Islamic Banking Units (IBU) is aligned with the strategic policy of the Bangko Sentral to strengthen corporate governance in its supervised institutions being central to sustaining resilience and stability of the financial system. The guidelines aim to protect consumers and other stakeholders by requiring that an IB or an IBU of a conventional bank comply with the SGF. The framework provides for the minimum expectations of the Bangko Sentral on the SGF of an IB or IBU relevant to the promotion of Islamic banking and aligned with existing laws and regulations.
It provides that the essential components of the SGF are:
- Effective board of directors and management oversight over Shari'ah compliance.
- Independent and effective Shari'ah Advisory Council.
- Independent and effective compliance and internal audit functions.