Entire FNB Islamic Finance board quits

FNB has reaffirmed its commitment to the Muslim community after the entire board of FNB Islamic Finance quit due to disagreements.

On 5 July 2012, the entirety of FNB Islamic Finance’s board – which subscribes to Shari’ah laws – resigned, claiming that “a change of guard within the Bank” had lead to a move away from the more conservative approach to banking which the members adhere to.

FNB’s Islamic Finance offers a range of products to help manage day-to-day finances and banking according to Shari’ah laws. This includes Shari’ah compliant financing and a Shari’ah compliant investment.

The board members claim to have held discussions with FNB executives regarding their concerns.

“Concerns were ironed out and a new pathway chalked out going forward,” said Mufti Ebrahim Desai, former Chairman of the Shari’ah Board of FNB Islamic Finance.

“It is with utter disappointment that we subsequently learnt that we were clearly lied to by these executives of the bank at that meeting. Our complaint thereafter to more senior executives fell on deaf ears,” he continued.

The statement issued by Desai went no further to explain what the exact issues or concerns were except that “independent clients of FNB, who were part of the discussions and correspondences, have expressed their shocking dismay at the Bank’s conduct.”

“Honesty, integrity and trust are the cornerstones of our involvement. In the light of such untenable breakdown in trust, the entire Shari’ah Board has immediately resigned. This decision is taken after broad consultation with Ulama and Deeni conscious leading and influential businessmen.”

“Those who wish to deal with FNB Islamic Finance may do so on the clear understanding that we cannot vouch for their products. Those products that we had endorsed will remain valid for as long as there are no changes. However, as we no longer supervise the implementation, we cannot endorse the same.”

FNB responds

Responding to the board’s mass exodus, FNB has reconfirmed its commitment to the Muslim community “for the ongoing provision of Shari’ah compliant products”.

The bank has subsequntly appointed two “key strategic individuals”, namely, Shaheen Suliman as chief financial officer and Yusuf Moola, will be joining the team on 1 August 2012 as an investment specialist.

“These key appointments further reiterate FNB’s commitment to bolstering IslamicFinance’s capabilities, particularly in exploring new markets and a range of products that adhere to Shari’ah law,” said Amman Muhammad, the newly-appointed strategic head of FNB Islamic Finance.

“In our drive to establish a robust and sound Shari’ah governance structure, we are pleased to announce that we have secured a Shari’ah Supervisory Compliance Oversight Committee, following the termination of the services of the previous members of the Shari’ah Board,” Muhammad said.

“This committee of experienced scholars, Shaykh Mahomed Shoaib Omar and Mufti Zaid Haspatel, will monitor and ensure the ongoing compliance of our products and operations going forward, while we reconstitute a permanent Shari’ah board,” Muhammad continued.

According to FNB, the bank and the members of the Shari’ah Board had “differing views” of the role of the board in the operational management of the business.

“The termination of services of the members of the Shari’ah Board in no way alters the compliance of our existing products and services or the validation of our Shari’ah certification,” the bank said.

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Entire FNB Islamic Finance board quits