Bahrain’s central bank is planning to establish a central sharia board to manage Islamic finance products in the kingdom, said the central bank governor Rasheed al-Maraj.

In addition, the central bank will initiate new rules to boost governance in the Islamic banking sector, reported Reuters.

The Sharia boards will include a group of scholars who will rule on activities such as bans on interest payments and pure monetary speculation.

The new board will also limit product discrepancies, speed the design of new products and increase investor confidence.

The launch of a central sharia board is aimed at accelerating product development, reduce costs for Islamic banks and facilitate issues of sukuk (Islamic bonds).

Furthermore, the central bank will launch new sharia governance rules to expand the internal sharia review and audit functions and will mandate banks to have an independent external sharia audit.

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Maraj said: "Good governance is a pervasive theme of our times and for Islamic banks its importance cannot be over-emphasized.

"A central sharia board is also being established to help the industry achieve consistency in sharia opinions and set the direction of product innovation," Maraj added.

The Bahrain’s central bank already has a sharia board which is limited only to vetting its own products.