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Sharia Supervisory Board Work Guidelines and Regulations

The Sharia Supervisory Board's Work Guidelines and Regulations were prepared as part of BCA Syariah's commitment to implementing good corporate governance

The Sharia Supervisory Board, as one of the organs of Sharia Commercial Banks, plays a crucial role in implementing the principles of Good Corporate Governance. Regarding duties and responsibilities, independence, transparency, and regulations governing Sharia Supervisory Board members, they are part of BCA Sharia's commitment to implementing good corporate governance.

Charter of the Sharia Supervisory Board

In carrying out its functions in the Bank, the Sharia Supervisory Board has a Charter that contains guidelines and rules of procedure for the Sharia Supervisory Board based on the Board of Directors' Decision on Good Corporate Governance Policy. It includes information about the duties and responsibilities of the Sharia Supervisory Board, structure, description of activities and authorities, working hours, and meeting regulations. The Sharia Supervisory Board's Charter is prepared based on applicable regulations and laws and is periodically reviewed.

Here is a summary of the Guidelines and Rules of Procedure for BCA Sharia's Sharia Supervisory Board:

Number and Composition of the Sharia Supervisory Board 

  1. The number of Sharia Supervisory Board members is at least 2 (two) or at most 50% (fifty percent) of the number of Board of Directors members, with one of them designated as the Chairman. 
  2. Appointment and/or replacement of Sharia Supervisory Board members are made considering the recommendations of the Remuneration and Nomination Committee. 
  3. Appointment and/or replacement of Sharia Supervisory Board members have received recommendations from the National Sharia Board - Indonesian Ulema Council and approval from the Annual General Meeting of Shareholders (RUPS). 
  4. The appointment of Sharia Supervisory Board members by RUPS takes effect after obtaining approval from the Financial Services Authority (OJK). 

Criteria and/or Requirements
Sharia Supervisory Board members must meet the following criteria: 

  1. Integrity, including at least: 
    • Having good ethics and morals; 
    • Commitment to comply with Sharia banking regulations and other applicable laws; 
    • Commitment to the development of a healthy and sustainable bank; 
    • Not being listed in the Failed Test List as stipulated in the fit and proper test provisions set by Bank Indonesia. 
  2. Competence, including at least having knowledge and experience in mu'amalah Sharia and knowledge in banking and/or finance in general; 
  3. Financial reputation, including at least: 
    • Not being included in the bad credit list; and 
    • Not having been declared bankrupt or being a shareholder, member of the Board of Commissioners, or member of the Board of Directors declared guilty of causing a company to go bankrupt within the last 5 (five) years before being nominated.
  4. Sharia Supervisory Board members must foster a culture of learning where the improvement of knowledge, skills, and abilities of Sharia Supervisory Board members in overseeing the Bank's compliance with Sharia principles will be demonstrated, including improving the Bank's performance by reducing violations of Sharia principles and resolving issues related to violations of Sharia principles. 

Term of Office

  1. The term of office is set for 1 (one) period, with the Sharia Supervisory Board member's term not exceeding the term set for Board of Directors or Board of Commissioners members. 
  2. In connection with point 1 above, the Sharia Supervisory Board is appointed by RUPS for a period starting from the date specified in the RUPS that appoints the Sharia Supervisory Board until the closing of the 3rd (three) annual RUPS held after the RUPS that appointed the Sharia Supervisory Board. 
  3. Sharia Supervisory Board members whose terms have expired may be reappointed.

Concurrent Positions

  1. Sharia Supervisory Board members may hold concurrent positions as members of the Sharia Supervisory Board in up to 4 (four) other Islamic financial institutions.
  2. Sharia Supervisory Board members are prohibited from holding concurrent positions as consultants in all Sharia Commercial Banks (BUS) and/or Islamic Rural Banks (UUS).
  3. Membership of the Sharia Supervisory Board in the Integrated Governance Committee and being in the position of a member are not considered as concurrent positions. 

Obligations, Duties, Responsibilities, and Authorities of the Sharia Supervisory Board
The Sharia Supervisory Board must carry out duties and responsibilities in accordance with GCG principles. The duties and responsibilities of the Sharia Supervisory Board include, among others:

  1. General Scope
    1. Evaluate and ensure compliance with Sharia principles regarding operational guidelines and products issued by the Bank;
    2. Supervise the process of developing new products by the Bank to ensure compliance with the fatwa of the National Sharia Board - Indonesian Ulema Council;
    3. Request a fatwa from the National Sharia Board - Indonesian Ulema Council for new Bank products that do not yet have a fatwa;
    4. Periodically review compliance with Sharia principles for fundraising and fund disbursement mechanisms and Bank service activities;
    5. Request data and information related to Sharia aspects from Bank units for the purpose of carrying out their duties.
  2. Supervision Scope of the Process of Developing New Bank Products
    1. Request explanations from authorized Bank officials regarding the purpose, characteristics, and contract used in new products to be issued;
    2. Examine whether there is a fatwa from the National Sharia Board-Indonesian Ulema Council on the contract used in new products;
      • If there is already a fatwa, the Sharia Supervisory Board analyzes the compatibility of the contract in new products with the fatwa of the National Sharia Board - Indonesian Ulema Council.
      • If there is no fatwa, the Sharia Supervisory Board proposes to the Bank's Board of Directors to complete the contract in new products with a fatwa from the National Sharia Board - Indonesian Ulema Council.
    3. Review the system and procedures for new products to be issued related to compliance with Sharia Principles; and
    4. Provide a Sharia opinion on new products to be issued, including procedures, contracts, and other matters related to the new products based on the fatwa of the National Sharia Board - Indonesian Ulema Council.
  3. Supervision Scope of Bank Activities
    1. Analyze reports submitted by or requested from the Board of Directors, internal audit function, and/or compliance function to assess the quality of implementing Sharia Principles for fundraising, fund disbursement, and Bank service activities;
    2. Determine the number of sample transactions to be examined by considering the quality of implementing Sharia Principles for each activity;
    3. Examine sampled transaction documents to determine compliance with Sharia Principles as required in procedures, including:
      • Existence of proof of purchase of goods, for murabahah contracts as evidence of fulfilling the murabahah sale and purchase conditions;
      • Existence of customer business reports, for mudharabah/musyarakah contracts, as a basis for calculating profit distribution;
    4. Conduct inspections, observations, request explanations, and/or confirmations from Bank employees and/or customers to strengthen the examination results of the documents as referred to in Number 3, if necessary;
    5. Review SOPs related to Sharia aspects if there are indications of non-compliance with implementing Sharia Principles for the activities concerned;
    6. Provide a Sharia opinion on fundraising, fund disbursement, and Bank service activities; and
    7. Report the results of Sharia Supervisory Board oversight to the Board of Directors and the Board of Commissioners.

Ethics and Working Hours

Work Ethics

The Sharia Supervisory Board must adhere to the Code of Ethics of BCA Sharia.

Working Hours

Sharia Supervisory Board members must allocate sufficient time to carry out their duties and responsibilities optimally.

Sharia Supervisory Board Meetings

  1. Sharia Supervisory Board meetings must be held at least once a month. 
  2. Meeting invitations are sent in writing before the meeting, stating the date, time, place, and agenda of the meeting.
  3. The meeting is chaired by the Chairman of the Sharia Supervisory Board, or in the event of the Chairman being unable to attend, another Sharia Supervisory Board member may be appointed as the meeting chairman.
  4. Decision-making at Sharia Supervisory Board meetings is based on consensus. If there are differences of opinion in the decision-making process, these differences may be recorded in the meeting minutes along with the reasons.
  5. In the process of decision-making as mentioned in point 4 above, the Sharia Supervisory Board may seek the opinion of the National Sharia Board - Indonesian Ulema Council if necessary.
  6. In the event that the Sharia Supervisory Board meeting is held using teleconferencing technology, the Bank must adequately document audio-visual recordings of the meeting and follow up with the preparation of meeting minutes signed by Sharia Supervisory Board members.
  7. All decisions of the Sharia Supervisory Board recorded in the meeting minutes are joint decisions of all Sharia Supervisory Board members.
  8. The results of the Sharia Supervisory Board meeting must be recorded in the meeting minutes and well-documented, including clear disclosure of any dissenting opinions.
  9. In conditions where it is not possible to hold a meeting, the Sharia Supervisory Board's decisions may be communicated in writing through circulation.