13/04/2025
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13/04/2025
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Group photo during the AAOFI 9th Sharia Audit Conference
KUWAIT CITY, April 13: Undersecretary of the Ministry of Commerce and Industry Marwa Al-Jaidan said the ministry is focusing on the improvement of the regulatory and oversight environment for companies operating in accordance with the Islamic Sharia Law. In her speech at the opening of the Ninth Shura-AAOIfi Sharia Audit Conference, Al- Jaidan pointed out this has been the case since the opening of the first Islamic bank in the country in 1977 and it continued in the 1990s, during which a number of Islamic companies were established, and these companies were required to ensure their articles of association and bylaws comply with Sharia principles.
She affirmed that the ministry has always been keen on keeping pace with the development of this vital sector by activating legal frameworks, most notably the Companies Law, which requires Islamic companies to appoint an independent Sharia audit committee, approve its reports and disclose them with complete transparency.
“This is a fundamental element in the credibility of their operations and to ensure the confidence of customers and investors,” she added. She pointed out that Sharia auditing is no longer just a technical or procedural activity, as it is rather an integrated regulatory system which contributes to building financial institutions that guarantee balance between compliance with Sharia provisions and efficient institutional performance.
“Therefore, the ministry remains committed to work closely with other regulatory authorities in the country and financial institutions, which balance compliance with Sharia provisions and efficient institutional performance,” she revealed. She stated that the ministry is keen to work closely with other regulatory authorities like the Central Bank of Kuwait, Capital Markets Authority and the Insurance Regulatory Unit, to unify standards and enhance governance and Sharia audit practices.
Islamic economy She affirmed the ministry’s support for licensing and monitoring activities in this sector, such as Sharia consulting firms and external Sharia audit offices. “This reflects the country’s commitment to create a flexible and reliable legislative and regulatory environment that supports the Islamic economy,” she asserted.
She explained that these efforts have shaped Kuwait into one of the most dynamic countries in the growth of the Islamic finance sector. “Sharia-compliant assets now represent approximately 49 percent of the total assets of the Kuwaiti banking sector, according to a Fitch Ratings report for the first half of 2024.
This indicator not only reflects the expansion of Islamic finance, but also demonstrates the growing confidence in this sector both locally and internationally. This growth is expected to continue in the coming years, driven by the growing demand for Islamic financial services and supported by the State’s wise policies to transform Kuwait into a regional center for Islamic finance,” she disclosed.
She indicated that holding this conference in Kuwait -- with the broad participation of regulatory authorities, experts and practitioners in the Islamic finance sector -- is considered an important opportunity to exchange views and enhance integration between theoretical and practical experience.
“Most importantly, it explores the prospects for developing Sharia auditing in light of rapid global transformations,” she stressed. She is hoping that the Shura-AAOIfi Conference will result in the formulation of practical recommendations and initiatives to consolidate the principles of governance and transparency in Islamic institutions and support the sustainability of this vital sector.
Meanwhile, Secretary General of Kuwait Banking Association Yaqoub Al-Rifai stated that external Sharia auditing plays an important role in ensuring that Islamic financial institutions comply with Sharia principles. “It works hard to improve governance in Islamic banks, achieve greater transparency and credibility in banking operations, and ensure compliance with local and international laws and regulations related to Islamic finance.
This increases the efficiency of the Islamic financial system in Kuwait and boosts customer and investor confidence. Exchanging ideas and experience on Sharia auditing will improve our understanding and lead us toward the advancement of Islamic financial systems,” he elaborated.
He expressed his confidence that the discussions at the conference and the accompanying workshops will significantly contribute to the development of this vital field, in order to achieve shared goals and strengthen trust and transparency in financial institutions.
By Marwa Al-Bahrawi
Al-Seyassah/Arab Times Staff
