Deficiencies in the Algerian legal texts regulating Sharia control over islamic banking

Abstract

The new Monetary and Banking Law includes two types of Shariah control for Islamic banking: external control assigned to the Shariah Advisory Board of the Higher Islamic Council through compliance certification, and internal control entrusted to a committee appointed by the bank's general assembly to review its operations. This research aims to examine the standards of these regulatory mechanisms according to financial sector regulation principles by analyzing the legal status of the Shariah Advisory Board and its assigned functions, as well as the effectiveness of the internal control committee, and the criteria used to assess the Shariah compliance of transactions and the authority of their resulting opinions. The study concludes that the regulatory texts governing both types of control are insufficient and fall short of the intended objectives, failing to withstand scrutiny.