Sharia Governance Framework

Last Updated: January 27, 2026

1. Introduction

Faratech Islamic Bank is committed to operating in full compliance with Sharia (Islamic law) principles. This Sharia Governance Framework outlines our commitment to Islamic banking principles, the structure and role of our Sharia Advisory Board, and the mechanisms we have in place to ensure ongoing Sharia compliance.

2. Our Commitment to Sharia Compliance

2.1 Core Principles

Faratech Islamic Bank operates under the following fundamental Islamic banking principles:

• Prohibition of Riba (Interest): We do not charge or pay interest. All financial transactions are structured using Sharia-compliant contracts such as Mudarabah (profit-sharing), Murabaha (cost-plus), Ijarah (leasing), and Qard Hasan (benevolent loans).

• Prohibition of Gharar (Excessive Uncertainty): All contracts are clear, transparent, and based on real assets. We avoid speculative transactions and ensure full disclosure of terms and conditions.

• Prohibition of Maysir (Gambling): We do not engage in gambling, speculation, or games of chance. All transactions are based on real economic activity.

• Ethical Investment: We only invest in halal (permissible) businesses and sectors. We exclude investments in:

  • Alcohol, gambling, and tobacco
  • Interest-based financial institutions
  • Prohibited food and beverage businesses
  • Adult entertainment
  • Weapons manufacturing (except for legitimate defense purposes)
  • Other activities prohibited by Sharia

• Asset-Backed Transactions: All financing and investment activities are backed by real, tangible assets.

• Profit and Loss Sharing: Where applicable, we share profits and losses with our customers based on agreed ratios, ensuring fairness and transparency.

2.2 Zakat Compliance

We assist our customers in:

• Calculating Zakat obligations accurately
• Distributing Zakat to eligible recipients
• Maintaining records for Zakat purposes
• Ensuring Zakat funds are used in accordance with Sharia principles

3. Sharia Advisory Board

3.1 Structure and Independence

Our Sharia Advisory Board is an independent body of qualified Islamic scholars and finance experts responsible for:

• Reviewing and approving all products and services
• Ensuring compliance with Sharia principles
• Providing guidance on Islamic banking matters
• Conducting regular audits and reviews
• Issuing Fatwas (religious rulings) on banking operations

3.2 Board Members

Our Sharia Advisory Board consists of:

• Dr. Ahmad Al-Mansouri - Chairman, Sharia Board (PhD in Islamic Finance, 20+ years experience)
• Sheikh Fatima Hassan - Sharia Board Member (Expert in Islamic Commercial Law)
• Dr. Omar Ibrahim - Sharia Board Member (Specialist in Islamic Banking and Finance)

All board members are:

• Recognized scholars in Islamic finance and jurisprudence
• Independent from day-to-day banking operations
• Committed to maintaining the highest standards of Sharia compliance
• Regularly updated on developments in Islamic finance

3.3 Board Responsibilities

The Sharia Advisory Board is responsible for:

1. Product Approval: Reviewing and approving all new products and services before launch
2. Ongoing Monitoring: Regular review of existing products and services to ensure continued compliance
3. Transaction Review: Reviewing complex transactions and providing guidance
4. Fatwa Issuance: Issuing religious rulings on banking operations and products
5. Training and Education: Providing training to staff on Islamic banking principles
6. Annual Reporting: Publishing annual Sharia compliance reports

3.4 Board Meetings

The Sharia Advisory Board meets:

• Regularly: Quarterly meetings to review operations
• As Needed: Special meetings for product approvals or complex issues
• Annually: Comprehensive annual review and reporting

4. Sharia Compliance Process

4.1 Product Development

All new products undergo a rigorous Sharia compliance process:

1. Initial Design: Products are designed with Sharia principles in mind from the outset
2. Internal Review: Our internal Sharia compliance team reviews the product
3. Board Review: The Sharia Advisory Board reviews and approves the product
4. Documentation: Sharia compliance documentation is prepared
5. Launch: Product is launched only after full Sharia approval
6. Monitoring: Ongoing monitoring to ensure continued compliance

4.2 Transaction Monitoring

We monitor all transactions to ensure:

• Compliance with approved Sharia structures
• Proper execution of Sharia-compliant contracts
• No involvement in prohibited activities
• Accurate profit and loss sharing calculations
• Proper Zakat calculations and distributions

4.3 Investment Screening

All investments undergo Sharia screening:

• Business Activity Screening: Excluding prohibited industries
• Financial Ratio Screening: Ensuring compliance with Sharia financial ratios
• Debt Screening: Limiting interest-bearing debt exposure
• Income Screening: Ensuring halal income sources
• Regular Monitoring: Ongoing compliance checks

5. Sharia Compliance Certifications

5.1 Product Certifications

All our products are certified as Sharia-compliant by our Sharia Advisory Board. Certifications include:

• Product approval certificates
• Sharia compliance statements
• Fatwas on product structures
• Regular renewal certifications

5.2 Annual Certification

We obtain annual Sharia compliance certification covering:

• All products and services
• Operational procedures
• Investment portfolios
• Transaction structures
• Overall banking operations

6. Transparency and Disclosure

6.1 Customer Disclosure

We provide clear information to customers about:

• Sharia compliance of products and services
• Profit-sharing mechanisms and calculations
• Fees and charges (no interest)
• Investment screening criteria
• Zakat calculation methods

6.2 Public Reporting

We publish:

• Annual Sharia compliance reports
• Sharia Advisory Board reports
• Product Sharia compliance certificates
• Investment screening results (where appropriate)

7. Training and Education

7.1 Staff Training

All staff members receive training on:

• Islamic banking principles
• Sharia-compliant product structures
• Prohibited activities and how to avoid them
• Customer communication about Sharia compliance
• Ethical banking practices

7.2 Customer Education

We provide educational resources to help customers understand:

• Islamic banking principles
• How our products comply with Sharia
• Profit-sharing vs. interest
• Zakat calculation and distribution
• Ethical investment options

8. Dispute Resolution

8.1 Sharia-Related Disputes

For disputes related to Sharia compliance:

1. Internal Resolution: We first attempt to resolve disputes internally
2. Sharia Board Review: Complex disputes may be referred to the Sharia Advisory Board
3. External Arbitration: If necessary, disputes may be resolved through Sharia-compliant arbitration
4. Court Proceedings: As a last resort, disputes may be resolved in courts with Sharia expertise

8.2 Customer Rights

Customers have the right to:

• Request information about Sharia compliance
• Raise concerns about Sharia compliance
• Access Sharia compliance documentation
• Receive responses to Sharia-related inquiries

9. Continuous Improvement

9.1 Regular Reviews

We conduct regular reviews of:

• Sharia compliance processes
• Product structures and contracts
• Investment screening criteria
• Staff training programs
• Customer education materials

9.2 Industry Standards

We stay updated on:

• Developments in Islamic finance
• New Sharia rulings and Fatwas
• Industry best practices
• Regulatory requirements for Islamic banking

9.3 Feedback and Improvement

We welcome feedback from:

• Customers
• Sharia scholars
• Industry experts
• Regulatory authorities

10. Regulatory Compliance

10.1 Banking Regulations

We comply with:

• Banking and financial services regulations in Senegal
• Regional banking standards
• International banking best practices
• Anti-money laundering and counter-terrorism financing requirements

10.2 Sharia Governance Regulations

We adhere to:

• Islamic banking governance frameworks
• Sharia governance standards
• Fatwa requirements
• Sharia audit requirements

11. Contact and Inquiries

11.1 Sharia Compliance Inquiries

For questions about Sharia compliance, please contact:

Sharia Compliance Department
Faratech Islamic Bank
Dakar, Senegal
Email: sharia@faratech.africa
Phone: +221 800 FARATECH

11.2 Sharia Advisory Board

For matters requiring Sharia Advisory Board attention:

Sharia Advisory Board Secretariat
Faratech Islamic Bank
Dakar, Senegal
Email: sharia-board@faratech.africa

12. Annual Sharia Compliance Report

We publish an annual Sharia Compliance Report that includes:

• Overview of Sharia governance activities
• Product approvals and certifications
• Investment screening results
• Sharia Advisory Board activities
• Compliance audit findings
• Future plans and improvements

The report is available on our website and can be requested by contacting us.

13. Commitment Statement

Faratech Islamic Bank is committed to:

• Maintaining the highest standards of Sharia compliance
• Transparency in our Sharia governance processes
• Continuous improvement of our Sharia compliance framework
• Serving our customers with ethical, Sharia-compliant banking services
• Contributing to the development of Islamic banking in West and Central Africa

14. Updates to This Framework

This Sharia Governance Framework may be updated from time to time to reflect:

• Changes in Sharia governance best practices
• New regulatory requirements
• Improvements to our processes
• Feedback from stakeholders

We will notify stakeholders of material changes to this framework.

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This Sharia Governance Framework is effective as of January 27, 2026. For the most current version, please visit our website or contact our Sharia Compliance Department.