IslamicFinance.de

Kuwait's central bank has issued new governance rules for Islamic banks, including requirements for external sharia audits, as regulators seek more transparency and accountability in the sector. Regulatory scrutiny over Islamic banks has been building as they now hold around a quarter of total banking assets in the Gulf, while in Kuwait that figure stands at around 40 %. Kuwait's central bank said the rules published this week aim to increase customer confidence in Islamic banking by strengthening both internal and external oversight. This follows similar steps by Bahrain which proposed new requirements in September for its Islamic banks, including external sharia audits. The central bank directive, which must be fully implemented by January 2018, provides guidance covering independence of sharia boards as well as fit and proper criteria for scholars.