Coronavirus: UAE Higher Sharia Authority approves COVID-19 parameters

Abu Dhabi: The Higher Sharia Authority (HSA) for financial and banking activities in the UAE held its second meeting of 2020 on April 26.

The meeting was chaired by Sheikh Dr. Ahmed Bin Abdulaziz Al Haddad, the Chairman of the HSA, and attended by members including Sheikh Prof. Dr. Jassim Ali Al Shamsi, Sheikh Issam Muhamad Ishaq, Sheikh Dr. Aznan Hasan, and Sheikh Dr. Usaid Muhammad Adeeb Al Kilani.

The HSA adopted its report for the year 2019, which maps the most significant achievements, initiatives and resolutions conducted during the year.

The authority also discussed COVID-19 pandemic’s impact on the economy and approved a set of Sharia parameters to mitigate the affect on individuals and companies.

It also urged Islamic financial institutions to join their efforts in supporting sectors and individuals affected by the pandemic.

The HSA also issued Sharia parameters related to the postponement of installments for Islamic financial institutions’ customers and how to deal with such postponement from a Sharia perspective, based on the type of transaction and Sharia contracts.

Moreover, the HSA reviewed its agenda and adopted some Sharia standards and parameters for calculating the collections costs incurred by Islamic financial institutions from late payment transactions.

The HSA also discussed issues related to the imposition of fees on loan-based transactions. The Islamic Banking Committee of the UAE Banks Federation will be consulted to identify best practices in this regard.

The HSA also reviewed requests for new financial products submitted by some Islamic financial institutions, and approved the applications that comply with the applicable Sharia standards. The HSA stressed the need to strike a balance between development and innovation in Islamic financial products and the regulatory and Sharia requirements.

Furthermore, HSA reviewed the requests submitted by Islamic financial institutions regarding the approval of annual Sharia reports, the appointment of members of the Internal Sharia Supervision Committees, and the heads of the Internal Sharia Control and Sharia Audit Departments, and issued resolutions in this regard.

To further improve the role of Internal Sharia Supervision Committees in Islamic financial institutions, the HSA was instructed to prepare a charter template for the Internal Sharia Supervision Committees based on best practices and to initiate a consultation about it with Islamic financial institutions.

The HSA completed the discussion of the remaining topics listed on the agenda and undertook the necessary action.