Members of the Shari'a Supervisory Board

Sharia Supervisory board

A specialized board of Sharia scholars which is elected by the Bank's general body. Sharia supervision is a prominent and distinctive feature of the Palestine Islamic Bank’s activities controlling and developing the Bank’s business in accordance with Sharia’s provisions and ensuring that the Bank's business and activities are carried out in accordance with the principles of Islamic Sharia.

Sharia Supervisory board References

• The decisions, directives and circulars approved and issued by it.
• The decisions, directives and circulars approved and issued by Higher Sharia Supervisory Board
• The standards of the Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain.
• Decisions, fatwas, and recommendations of seminars, councils and juristic forums are considered and approved by the Bank's Sharia Supervisory Board in relation to the Bank’s operations.

Scope of the Sharia Supervisory board

The Board has the right to fully access, without restrictions, all records, transactions and information, including those of the Bank’s employees and consultants. The board relies on the instructions of the Palestinian Monetary Authority according to banking law and sharia standards and the rules and best practices for the governance of banks in Palestine issued by the Palestinian Monetary Authority.

The decisions of the Board within its purview, and which do not contradict with the powers of the Supreme Sharia Supervisory Board founded by the Palestinian Monetary Authority, are obligatory on the Bank. In this regard, the decisions of the Board on the Bank’s transactions and activities are enforceable.

Tasks of the Sharia Supervisory Board

• Directing, monitoring and supervising the Bank’s business and activities to ensure compliance with Islamic Sharia.
• Ensuring that there is a sound and effective internal Shari'a supervisory system that ensures the application of Islamic Sharia.
• Examining the Bank’s compliance with the provisions of Islamic Sharia in all its activities.
• Providing guidance and training to the Bank's employees on compliance with Islamic Sharia.
• Expressing opinions on the extent of the Bank’s commitment to the provisions of Islamic Sharia and publishing them before the Bank’s general assembly and in its annual report.

Working mechanism of the Sharia Supervisory president:

• The Board meets at the invitation of its chairman or at the invitation of the Bank management when necessary.
• The Board holds twelve regular meetings a year, one meeting each month.
• The Board receives enquiries from the executive management and from the Bank’s branches through the Bank’s Sharia Auditing Department, and it duly responds to them.

Sharia Auditing unit

The Shari'a Auditing unit is one of the Bank's important supervisory departments, and it follows the work of the Shari'a Supervisory Board appointed by the Bank’s general authority. It is independent from the executive management in performing its work and has the right to view all documents, contracts, agreements, models and policies of the Bank with full support from the Board of Directors, executive management, and the Sharia Supervisory Board in order to achieve the Bank's goals and avoid risks in accordance with the Sharia and approved governance standards.

Main objectives of the Sharia Auditing unit :

• Verifying that the Bank’s management has fulfiulled its responsibilities towards implementing the provisions and principles of Islamic Sharia in accordance with the approved Sharia standards.
• Verifying the suitability, adequacy, and effectiveness of the internal Sharia control system.
• Verifying that any activity, product, service, or contract carried out by the Bank is authorized by the Sharia Supervisory Board.
• Achieving the integrative supervisory role with other supervisory departments with the aim of achieving an effective regulatory system.

Tasks of the Sharia Auditing unit:

• Reviewing the services, products, instructions and work procedures issued by the Bank’ in light of the Sharia’s Supervisory Board decisions.
• Preparing for the regular meetings of the Board and following up the implementation of its decisions and recommendations.
• Carrying out field Sharia audit tours on a regular basis and submitting audit reports to the Sharia Supervisory Board.
• Participating with the Board in scientific meetings and seminars and communicating with the public effectively.
• Preparing the unit's business plan annually, revising work instructions and procedures and seeking approval of them by the Sharia Supervisory Board, which in turn evaluates the performance of the Department and its employees within the approved annual plan.

Sharia Supervisory Board Report for the year 2024

Presented to shareholders of Palestine Islamic Bank:

May the peace and blessings of Allah be upon you,

In accordance with the letter of assignment, we have monitored the principles used and contracts related to transactions and applications offered by the Bank during the fiscal year from 1/1/2024 to 31/12/2024.

We have conducted due monitoring to express our opinion on whether the Bank has complied with the provisions and principles of Islamic Sharia as well as the specific fatwas, decisions and guidelines issued by us.

We carried out our observation, which included examining the documentation and procedures used by the bank on the basis of testing each type of operation on the basis of the selected sample, making observations about it and verifying its compliance with the approved Sharia principles.

We have planned and carried out our monitoring in order to obtain all the information and explanations that we have deemed necessary to provide us with sufficient evidence to give reasonable assurance that the Bank has not violated the provisions and principles of Islamic Sharia.

The Bank's management is responsible for carrying out the Bank's business in accordance with the provisions and principles of Islamic Sharia and the responsibility of the Sharia Supervisory Board is to form an independent opinion after carrying out the required review and monitoring to submit the following report to you:

First: The Board reviewed the bank's implemented work during the period from 1/1/2024 to 31/12/2024.

Second: The Board answered all questions and inquiries referred to it by the Bank's management during the mentioned period.

Third: The Board added its observations and corrections to the transactions, agreements and business forms presented to it.

Fourth: The Board reviewed and discussed the Sharia audit reports on the branches and offices submitted by the Sharia Audit Department and submitted its recommendations and observations. In cooperation with the Sharia Audit Department, it followed up on their implementation.

Fifth: In cooperation with the Sharia Audit Department, the Board participated in a number of educational and awareness-raising meetings, both within the bank and with the local community. These meetings are part of the effort to spread and promote a culture of Islamic banking.

Sixth: The Board approved and reviewed a number of agreements, publications, policies, contract templates, terms of business, sponsorships, and cooperation agreements with various companies and institutions, including:

• Financial statements for 2023.
• The Board’s 2023 Annual Report to shareholders.
• The distribution of dividends to depositors for the second period of 2023 (from July 1, 2023, to December 31, 2023).
• The AML/CFT policy.
• The dividend distribution policy to investors in PIB.
• Memorandum for addressing outstanding debt to public sector employees.
• The distribution of dividends to depositors for the first period of 2024.
• The mechanism for selling benefits to parties which did not sign an agreement with PIB.
• The wages bulletin for products and services, version no. 12.
• The draft interim financial statements for June 30, 2024.
• Amendments to the bill of exchange form, general conditions for commercial papers, and general conditions for transactions.
• Debt follow-up and collection policy.
• Disclosure of revenues and expenses involved and not involved in calculating profits on regular and premium deposits.
• The Sharia Audit Department’s 2025 annual plan.
• In addition, it approved a set of contracts, campaigns, programs, and agreements presented to the Board during the aforementioned period.

In our opinion:

1. Upon the review of the Board of contracts submitted to it and after making the necessary amendments thereto, the contracts, operations and transactions concluded by the Bank during the said period under review were concluded in accordance with the provisions and principles of Islamic Sharia.
2. All profits achieved from sources or in ways prohibited by Islamic Sharia or found by the Board to be in violation of Sharia standards, fatwas and Sharia rulings have been placed in the charity fund to be disbursed for charity purposes as per the recommendations of the Sharia Supervisory Board.
3. There is no objection to adopting the means chosen by the Board of Directors to have each shareholder pay their Zakat by themselves. The percentage of Zakat due on shares, which amounted to (5.27%) for each share has been accounted for, provided that the shareholders are notified of this. The Board calls on everyone to perform the obligation of Zakat in accordance with Sharia provisions, and to pay their Zakat themselves.
4. The Bank shall abide by the decisions issued by the Supreme Sharia Supervisory Board.

The Sharia Supervisory Board would like to thank the Board of Directors for their trust, as well as PIB’s management and staff for their cooperation. May Allah bless them with the best reward.

Allah is the guide to the right path

Ramallah, 16 Ramadan 1446 AH,

corresponding to 16/3/2025 AD