Shariah principles are the foundation for the practice of Islamic finance through the observance of the tenets, conditions and principles espoused by Shariah. Non-compliance with Shariah principles may bring about financial and legal disrepute that could affect the reputation of the Islamic financial institution (IFI) and the industry generally. Bank Negara Malaysia (the Bank) places great importance in ensuring that the overall Islamic financial system operates in accordance with Shariah principles. To meet this objective, Agrobank (formerly known as Bank Pertanian Malaysia Berhad) form a Shariah committee to advice on its Shariah matters.

FUNCTION

The Shariah committee shall be responsible and accountable for all its decisions, views and opinions related to Shariah matters. As the Shariah decisions, views and opinions bind the operations of the Agrobank, the Shariah committee shall ensure decisions are made after undergoing rigorous and robust research and deliberation exercise. The Shariah committee shall perform an oversight role on Shariah matters related to the Agrobank’s business operations and activities.

MAIN DUTIES AND RESPONSIBILITIES OF THE SYARIAH COUNCIL 

1. Responsibility and accountability
The Shariah committee shall understand that in the course of discharging the duties and responsibilities as a Shariah committee member, they shall be responsible and accountable for all Shariah decisions, opinions and views provided by them.

2. Advise to the board and Bank
The Shariah committee shall advise the board and provide input to the Agrobank on Shariah matters in order for the Agrobank to comply with Shariah principles at all times.

3. Endorse Shariah policies and procedures
i) The Shariah committee shall endorse Shariah policies and procedures prepared by the Agrobank and ensure that the contents do not contain any elements which are not in line with Shariah.
ii) To endorse Shariah Compliance Manual

4. Endorse and validate relevant documentations
To ensure that the products of the Agrobank comply with Shariah principles, the Shariah committee must endorse and validate relevant documentations:

i) The terms and conditions contained in forms, contracts, agreements or other legal documentations used in executing the transactions; and

ii) The product manual, marketing advertisements, sales illustrations and brochures used to describe the product. 

5. Assist related parties on Shariah matters for advice upon request.
The related parties of the Agrobank such as its legal counsel, auditor or consultant may seek advice on Shariah matters from the Shariah committee. The Shariah committee is expected to provide the necessary assistance to the requesting party to ensure compliance and subscription with Shariah principles.

6. Advise on matters to be referred to the Shariah Advisory Council (SAC) BNM.
The Shariah committee shall advise the Agrobank to consult the SAC on any Shariah matters which could not be resolved or endorsed by the Shariah committee.

7. Spokesman on Shariah
To explain and provide information to Agrobank’s staff, press conference or any authoritative body on Shariah Committee decision whenever needed by the management.

8. Provide written Shariah opinion
The Shariah committee is required to record any opinion given. In particular, the Shariah committee shall prepare written Shariah opinions in the following circumstances:

i) Where the Agrobank make reference to the SAC for further deliberation; or

ii) Where the Argobank submits applications to the Bank for new product approval

9. To observe Agrobank confidentiality
The confidential information shall be treated by the Shariah Committee as confidential and shall not be give, produced, divulged revealed, publish or disclose by him/or his personnel(s) to any third part without the prior written approval and consent of Agrobank.