The Islamic International Rating Agency (IIRA) has reaffirmed its Shari'a Quality Rating of AA assigned to Jordan Islamic Bank (JIB). This rating indicates JIB's conformance to very high standards of shari'ah compliance in all aspects of shari'ah quality analysis.
Since its inception in 1978, JIB has garnered strong franchise as a shari'ah compliant financial institution in Jordan. It is the country's largest Islamic bank and is in majority owned by Albaraka Banking Group, a prominent Islamic banking franchise. The group has been the pioneer of Islamic finance in many countries including Jordan, IIRA notes.
The rating is also supported by Jordan's effective regulatory shari'ah governance standards, which with recent revisions are closely aligned with best practices. The bank has been proactive in adopting the revisions in central bank guidelines, and their full implementation is targeted to be achieved within the ongoing year. The revised regulatory standards, among other things, envisage greater authority, independence and involvement of the Shari'a Supervisory Board, being the eminent authority for ensuring shari'ah compliance.
Establishment of an independent shari'ah function, separate from the internal audit department in the wake of regulatory revisions, has also further strengthened the bank's shari'ah governance structure. Other recommended areas of improvement include diversifying across Islamic modes of finance, as murabahah presently remains the dominant transaction mode. Transparency of financial reporting vis-a-vis investment accounts and corporate governance disclosures are mainly in line with the Islamic Financial Services Board's recommended best practices.