GOVERNMENT AGENCIES have approved the establishment of a Shari’ah Supervisory Board (SSB) in the Bangsamoro Autonomous Region of Muslim Mindanao (BARMM) to boost the regulatory environment for Islamic banking.

“The SSB will provide essential Shari’ah compliance oversight to enable Islamic finance to flourish in the country,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a statement.

The memorandum of agreement and joint circular were approved by the BSP, the Department of Finance, National Commission on Muslim Filipinos, and the Bangsamoro Government.

“The SSB’s primary function is to issue Shari’ah opinions on Islamic banking transactions and products in the BARMM. At the same time, the BSP, financial institutions, and other stakeholders may request the SSB to provide Shari’ah opinions on matters related to Islamic banking and finance,” the BSP said in a statement.

The SSB may also be consulted by the central bank, financial institutions and other stakeholders for opinions related to Islamic banking and finance.

The creation of the SSB is in line with Republic Act 11054 or the Organic Law for the BARMM. Its provisions include the promotion of Islamic banking and finance in the region.

Mr. Diokno said Republic Act 11439 or the Islamic Banking Law gives the government leeway to convert SSB into a national body “if warranted, such as when there is already a critical number of Islamic banking players in the financial system.”

Al Amanah Islamic Bank is the only Islamic lender operating in the country. It is under the Development Bank of the Philippines.

Central bank officials said they have not yet received a formal application from players who want to go into Islamic banking in the country. — Luz Wendy T. Noble

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