In line with government directives to mitigate the impact of the pandemic, the Bank has keenly adhered to all precautionary and preventive measures within the Sharia Group, using online technology as far as possible to comply with social distancing rules and other pandemic-related restrictions.
Adhering to Sharia precepts
Since its foundation, Al Rajhi Bank has meticulously ensured that all Sharia precepts are adhered to in all of its transactions. In order to maintain this significant commitment, the Bank assigns responsibility for determining the legitimacy of its transactions and dealings to an independent legal authority, whose membership includes a number of distinguished scholars.
The composition of this body and its regulations are approved by the General Assembly; its decisions are binding on all of the Bank’s departments, thereby ensuring our commitment to the provisions of Islamic Sharia in all our business and activities – both inside and outside the Kingdom of Saudi Arabia.
The Sharia Board holds periodic meetings in which it examines all of the Bank’s products, investments, financing agreements, contracts, and models.
The Sharia Board met 30 times during 2020, examining over 220 topics including banking products, agreements, contracts, questions and inquiries, and issued necessary decisions for each case making a total of 1,198 decisions during the year under review while also providing guidance to be adopted and acted upon.
Structure of the Sharia Group
The Sharia Group was formed within the Bank to support the Sharia Board in achieving its objectives. The Sharia Group consists of two departments.
1. Sharia Board Secretariat Department
Comprising a number of legal advisors who study new banking products, agreements and contracts put forward to them by various groups and departments of the Bank, this Department prepares all the relevant legal research and studies for presentation to the Sharia Board. The Department then informs the relevant teams of the recommendations and decisions of the Sharia Board. In addition, the Department participates in the Bank’s development of Sharia products and provides Sharia counselling to other groups and departments in accordance with the decisions of the Sharia Board.
During 2020, the Secretariat Department prepared materials on 215 topics.
2. Sharia Audit Department
This Department supervises all the Bank’s activities in relation to applying and adhering to the decisions and recommendations of the Sharia Board. Such supervision ensures that there are no unauthorised products, contracts or models and that employees understand the Sharia Board’s decisions through an integrated team of Sharia monitors. The Department performs Sharia audits of the Bank’s business through automated systems and field visits, and is responsible for developing and reviewing auditing standards issued by the Sharia Board.
During 2020, these reviews totalled 1,246 in number.
Activities and oversight in 2020
Seeking to enhance awareness about Sharia among employees, customers, and others with an interest in Islamic banking the Sharia Group organised a number of initiatives and events. These included:
- 11 separate specialised Sharia banking courses for employees
- 12 joint workshops that focused on Sharia principles in banking transactions and activities
- 295 inquiries answered including 250 telephone inquiries and 45 postal inquiries
- 10 awareness messages disbursed to the Bank’s employees
- 18 books on Islamic banking and financial transactions printed and distributed
The Group also represented the Bank at meetings with the Saudi Central Bank (SAMA), participating in seminars, events, specialised jurisprudence forums, and the like. The Sharia Group also provided scientific support to Islamic scholars and students training in the field of Islamic banking.
Amidst a global pandemic, with its profound impact on world economies and the familiar way of life, the Sharia Group is grateful for God’s blessings, the value of good health and the importance of utilising capabilities to face the challenges of COVID-19. In line with Government directives to mitigate the impact of the pandemic, the Bank has keenly adhered to all precautionary and preventive measures within the Sharia Group, using online technology as far as possible to comply with social distancing rules and other pandemic-related restrictions.
In line with the Al Rajhi’s new BOTF strategy, the Sharia Group will continue to ensure that the Bank serves its stakeholders in full compliance with Sharia law.
GRI 302-4, 405-1