Bank Negara Malaysia (BNM) and Participation Banks Association of Türkiye (Türkiye Katılım Bankaları Birliği, TKBB)^[1] jointly-hosted the 5^th Centralised Shariah Advisory Authorities on 6 September 2023 in Istanbul, Türkiye. The inaugural co-hosting arrangement demonstrates mutual dedication in fostering international connectivity among central Shariah authorities.

Co-chaired by Prof. Dr. Ashraf Md. Hashim, Chairman of BNM Shariah Advisory Council and Prof. Dr. Abdullah Kahraman, Board Member of TKBB Central Advisory (Shariah) Board, the meeting gathered more than 50 delegates from 15 participating countries^[2] and observers^[3] from Islamic standard-setting and international organisations.

Key outcomes of the meeting:

1. Key Developments in Shariah Rulings and Emerging Issues^[4]: The meeting shared key developments in Shariah governance and present rulings (fatwa) on emerging issues, specifically on the digital currency. In the context of previous rulings issued by central Shariah authorities, the meeting recognises the need to periodically revitalise the Shariah rulings to ensure their relevancy and alignment to the market advancement and local customary practices (`urf tijari).

2. Sustainability Consideration in Shariah Decision-making Framework^[5]: The meeting acknowledged the importance of sustainability consideration in central Shariah authorities' decision-making to achieve the objectives of Shariah (maqasid) i.e., prevention of harms and attainment of benefits. Moving forward, the central Shariah authorities' decision-making process should consider broader perspective comprising sustainability of the economy, environment and people well-being as a whole.

3. Role of the Central Shariah Authorities in Navigating Takaful Model and Regulatory Compliance^[5]: The meeting highlighted the significance of clear Shariah contract recognised by laws for the establishment of takaful fund. The establishment of clear rights, responsibilities and contractual relationships (al-`alaqat al-ta`aqudiyah) between all parties/funds is a prerequisite in exploring various takaful models. The issue of application of tabarru` in takaful and retakaful with conventional reinsurance company was also discussed.

4. Strengthening CSAA’s Governance^[6]: The meeting acknowledged the need to establish a proper organisational structure and Terms of Reference (ToR) in order to achieve strategic objectives, secure strong commitment and wider participation from countries across the globe.

[1] For information, in 2018, Central Advisory Board (Shariah Board) was formed under TKBB to develop and ascertain the principles and standards of participation banking in Türkiye.

[2] Afghanistan, Bahrain, Bangladesh, Djibouti, Kuwait, Libya, Malaysia, Maldives, Morocco, Nigeria, Oman, Pakistan, Palestine, Türkiye and United Arab Emirates.

[3] Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), General Council for Islamic Banks and Financial Institutions (CIBAFI), Islamic Financial Services Board (IFSB), and Islamic Development Bank (IsDB).

[4] Presented by The Participation Banks Association of Türkiye (TKBB), the Central Bank of Kuwait and Securities Commission, Malaysia.

[5] Presented by The Central Bank of the United Arab Emirates (CBUAE) and BNM.

[6] Presented by BNM.

CSAA in Action

Bank Negara Malaysia
2 October 2023