12 March, 2020
On 13 December 2019, the Monetary Board of the Bangko Sentral ng Pilipinas (“BSP”) approved the Shari’ah Governance Framework (“SGF”), which it codified in BSP Circular No. 1070. The release of the SGF is seen as a logical supplement to the passage of Republic Act No. 11439 (“Islamic Banking Act”) in August 2019 and the Guidelines on the Establishment of Islamic Banks and Islamic Banking Units (“BSP Circular No. 1069”) in December 2019, both of which set out the rules governing the organisation, regulation and powers of Islamic banks that will be established in the Philippines.
Implications for business in the Philippines
Investors and existing banks seeking to establish Islamic banks (“IB”) or Islamic banking units (“IBU”) are required to comply with the SGF, and make sure that the SGF is already in place on the first day of their operations. In doing this undertaking, those who want to enter the Islamic banking system should recognise BSP’s mandate and supervisory powers over every aspect of their Islamic banking operations, keeping in mind the implications on their reputation and business should they risk not to observe and comply with BSP’s regulations, including the creation of their SGF.
The full article can be found from Zicolaw's site here.
For more information, please contact:
Felix T Sy, Partner, Insights Abodago Philippines (a member of ZICO Law)
felix.sy@insights-law.com
