‘Chaos seen at Bank in future’
The Central Bank of Kuwait (CBK) issued a decision to form a Sharia supervisory authority in the bank comprising of four members to manage it that will be responsible for the tasks of approving candidates for membership of Sharia supervisory bodies in Islamic banks and financial institutions, settling disputes between members of these bodies, and expressing the Sharia opinion on what is referred to it by the courts or arbitration on issues of Islamic financial work.
Apart from any explanations, the decision to establish the authority is due, as a result of the chaos that the legal fatwa witnesses in various financial institutions, and their contradiction, as a result of the absence or lack of clarity of texts.
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It appears that the policy interferes with the method of selecting some members of the authority. It is well known that there are differences between the CBK and the Minister of Finance on the one hand, and the current management of the Kuwait Finance House on the other hand, related to the formation of KFH Board of Directors.
Minister of Finance Barrak Ali Al-Shitan tried hard to change the composition of the House Board. The position or desire of the Minister of Finance to change the board of directors of KFH was supported by the governor of the CBK, in addition to the hidden support of the Brotherhood, who had previously lost their control of ‘House’.
On the other hand, the board of directors of KFH gained support from many parties, and the minister stepped up the interrogation podium twice. One of them is his position on the issue of the usurious interest that the Public Institution for Social Security (PIFSS) collects on retirement loans, which prompted the Minister of Finance to seek a legal opinion regarding its permissibility.
It is also said that both the Finance Minister and PIFSS or either of them sign a contract with a competent authority for legal consultations in order to market the positions of the minister and PIFSS related to the legitimacy of interest and to defend it before the Fatwa Authority of the Ministry of Awqaf and Islamic Affairs.
It became clear later that the Sharia body tasked with the promotion is run by a citizen (freshly naturalized) -- with due respect to him -- and at the same time he is a member of the ‘government’s’ Fatwa Authority in the Ministry of Awqaf, which means in terms of the suspicion of ‘conflict of interests’, especially since the opinions of this person are clear with ‘Brotherhood’ political stances, during and after the ‘Arab Spring’ movements.
When the issue of legality of the benefits collected by the PIFSS was presented to the Awqaf Fatwa Authority, in the presence of one person, Chairman of the competent body for legal consultations and at the same time a member of the Government Fatwa Authority, the Authority’s opinion was settled on the illegality of benefits.
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As a result of the loss of the opinion of the 2-positions of the contracted promoter, and the parties behind them, of the fatwa on the validity of the benefits, and to satisfy his Muslim Brotherhood party, the CBK has reportedly rewarded him for his unfruitful efforts by appointing him head of the advisory body in the CBK, which means financial rewards and considerable ‘legal’ influence.
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I was hoping the respected CBK Governor would distance himself and the Bank from such controversial appointments, and not politicize the affairs of the Bank, with the apparent lack of eligibility of some of the appointed members of the board, which means a majority of its decisions in the future will be drawn by the person it chairs, with all confusion surrounding him.
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