New FNB board for Islamic bankingComment on this story
THE ISLAMIC division of FNB has hired a new sharia advisory committee and aims to rebrand itself after a governance crisis last year saw the previous board quit, denting investor confidence.
Under the new structure, the committee will no longer play a role in the day-to-day running of the business, removing the potential for conflicts like those that led to a public spat with the management last year.
“We’re proposing to go to the market at the start of our new financial year with the name FNB Islamic Banking. It’s important for us to build our credibility in South Africa, [while] FNB acts as a conduit between us and other African countries,” the new chief executive of the Islamic business, Amman Muhammad, said.
The new committee consists of Aznan Hasan, Yusus Patel and Zaid Haspatel.
“In the new structure, we no longer call them a board, we’re using the term “sharia advisory committee” and we now clearly define what the role of the committee is,” Muhammad said, adding that the new team would review the bank’s previous sharia products.
Sharia committees or boards monitor banks’ products and activities to check they follow Islamic principles.
FNB’s previous sharia board resigned last July after disagreements over the board’s role when the new management took charge of the division, former board members said.
Deposits at the Islamic bank continued to grow even during last year’s crisis, highlighting the demand for sharia banking in South Africa, Muhammad said.
Only 2 percent of South Africa’s population is Muslim but authorities say they want to establish the country as a hub for Islamic finance.
FNB is the retail arm of FirstRand, which rose 1.14 percent to R31.18 on Tuesday. – Reuters