FNB Islamic Finance in the spotlight (By IFN)

SOUTH AFRICA: FNB Islamic Finance, the Shariah compliant window of First National Bank, has found itself in the spotlight after its Shariah board announced its resignation on the 5thJuly.

In a press release detailing its role in the development of FNB Islamic Finance, Ebrahim Desai, the ex-chairman of the bank’s Shariah board, said that: “The bank has always appreciated our services despite our more principled and precautionary approach and looked forward to our continued engagement until this last moment”, while noting the board did not accept any remuneration for their services during their tenure at the bank.

“However, within the recent past, a change of guard within the bank took place. Under the new non-Muslim senior executives we discerned a change of attitude and lack of drive to be committed to the more conservative approach we adhere to. In order to steer the ship into clearer waters, a meeting was held with the Shariah board, the bank’s senior executives and prominent businessmen from the Muslim community. Concerns were ironed out and a new pathway chalked out going forward,” he said.

Ebrahim further said that: “It is with utter disappointment that we subsequently learnt that we were clearly lied to by these executives of the bank at the meeting. Our complaint thereafter to more senior executives fell on deaf ears. Independent clients of FNB, who were part of the discussions and correspondences, have expressed their shocking dismay at the bank’s conduct.”

Following this, the Shariah board resigned, with Ebrahim adding that: “Those who wish to deal with FNB Islamic Finance may do so on the clear understanding that we cannot vouch for their products.”

FNB Islamic Finance quickly issued a statement of its own on the 6th July, reiterating its commitment to Islamic banking and reaffirming the Shariah compliance of its existing products and services. It also announced the appointment of a Shariah supervisory compliance oversight committee, comprising scholars Shaykh Mahomed Shoaib Omar and Zaid Haspatel. The scholars will “monitor and ensure the ongoing compliance of our products and operations going forward, while we reconstitute a permanent Shariah board,” said Amman Muhammad, the newly appointed strategic head of FNB Islamic Finance.

In a later response to Islamic Finance news, the bank said that: “The [Shariah] board sent an email communication to FNB on the 21st June stating that they had suspended their services. We accepted their suspension and advice of a breakdown in the relationship and accordingly terminated their services.”

The bank also announced the appointment of Shaheen Suliman as its new chief financial officer and Yusuf Moola as an investment specialist. “These key appointments further reiterate FNB’s commitment to bolstering Islamic Finance’s capabilities, particularly in exploring new markets and a range of products that adhere to Shariah law,” said Amman, who added that the team will be crucial in realizing the division’s African expansion objectives and widening its products.

See: http://redmoney.newsweaver.co.uk/c4wadp4r0bch38rwoni3wx?email=true&a=6&p=25709435&t=21616685