Central Bank of Libya Circular No. 6/2022: Conditions for Appointing Internal Audit, Risk, and Shariah Compliance Directors

Central Bank of Libya
P.O. Box 1103 - Telegram: MisrLibya - Tripoli, Libya

Ref: R.M / N 804/
Subject: Circular No. (2022/6)
Date: 17 Safar 1444 AH
Corresponding to: 14 September 2022

To: Chairmen of the Boards of Directors of Banks

Subject: Controls for assuming the position of Director (Internal Audit Department - Risk Management Department - Shariah Compliance Department) and their deputies in banks and financial institutions

Greetings,

Based on the provisions of Law No. (1) of 2005 concerning Banks and its amendments, and within the framework of the supervisory and regulatory role exercised by the Central Bank of Libya on banks operating in Libya.

And with reference to Circular No. (2010/13) dated 27 September 2010, which circulated the decision of the Board of Directors of the Central Bank of Libya No. (20) of 2010 approving the Governance Guide for the Libyan Banking Sector.

And with the Central Bank of Libya’s keenness to enhance the internal control environment in banks and financial institutions by activating the role of supervisory departments affiliated with the boards of directors to reduce the risks they are exposed to, thereby ensuring the preservation of the safety and stability of the banking system.

Accordingly, we inform you of the issuance of instructions from the Central Bank of Libya regarding the conditions and controls for assuming the positions of directors of (Internal Audit - Risk - Shariah Compliance) departments as follows:

1. The board of directors of the bank and financial institution is committed to establishing selection, appointment, and dismissal mechanisms for directors of (Internal Audit - Risk - Shariah Compliance) departments and their deputies in accordance with what was stated in the approved governance guide for the banking sector, provided that the appointee is a specialist with a university qualification, has practical experience in the field of the position for which he is a candidate of no less than five years, and holds specific approved and specialized certificates in his field.

2. The composition of the candidate for the position of Director of Internal Audit and Shariah Compliance Department and his deputy is subject to approval by the Shariah Supervisory Authority in the bank and financial institution.

3. Directors of (Internal Audit Department - Risk Management Department - Shariah Compliance Department) are appointed by a decision issued by the board of directors of the bank and financial institution based on a recommendation from the Audit Committee, the Risk Committee, and the Remuneration and Appointments Committee emanating from the board of directors.

4. Decisions appointing candidates to assume the positions of directors of (Internal Audit Department - Risk Management Department - Shariah Compliance Department) and their deputies are submitted numerically using the personal questionnaire attached to this circular after filling all fields contained therein, along with the CVs of the appointees accompanied by supporting documents to the Banking and Currency Supervision Department at the Central Bank of Libya.

5. No action resulting in the suspension or dismissal of directors and their deputies shall be taken except by a reasoned decision issued by the board of directors of the bank and financial institution, and with the approval of the Banking and Currency Supervision Department, and any changes in these positions within one week from the date of issuing the decision.

6. Boards of directors must address the current status of the levels of (Internal Audit - Risk - Shariah Compliance) departments in accordance with the aforementioned instructions, provided that the period does not exceed four months.

7. Boards of directors of banks and financial institutions are committed to taking all necessary measures to ensure the independence of these departments and the proper performance of their work.

Accordingly, you are requested to convey the matter to the necessary attention and take measures sufficient to implement the instructions so that the committees emanating from the boards of directors of banks and financial institutions follow up on the measures taken in this regard according to the responsibilities entrusted to them, and in case non-compliance is identified, penalties stipulated under the provisions of Law No. (1) of 2005 concerning Banks and its amendments will be applied.

... Dr. Daloun Eid ...
Naji Muhammad Issa
Director of Banking and Currency Supervision Department

Copies to:

• Mr. Advisor to the Governor for Islamic Banking Affairs
• Mr. Director of Internal Audit Department - Central Bank of Libya
• Mr. Director of Information Implementation Department (Central Financial Data System Team for Commercial Banks)
• Mr. Director of Risk Management Department - Central Bank of Libya
• Mr. Director of Compliance Unit - Central Bank of Libya
• Messrs. General Managers of Banks
• Mr. Deputy Director of Banking and Currency Supervision Department
• Mr. Deputy Director of Banking and Currency Supervision Department for Office Supervision and Compliance Robustness
• Mr. Deputy Director of Banking and Currency Supervision Department for Field Supervision and Policies and Legislation
• Mr. Deputy Director of Banking and Currency Supervision Department for Islamic Banking Affairs
• Service Quality Committees for Banking
• Together * Important

Central Bank of Libya
Banking Supervision and Compliance Department

Personal Questionnaire for Appointees in Banks to Assume

Director of Internal Audit Department
Director of Risk Management Department
Director of Internal Audit and Shariah Compliance Department

Currency

	Full Name
1
2	Date and Place of Birth
3	Nationality
4	National ID Number
5	Marital Status
6	Residential Address
7	Mobile Phone Number
8	Email Address
9	Passport Number
10	Current Position
11	Appointment Date
12	Assignment Date to Position

Academic Qualifications

Academic Qualification	Major	Issuing Institution	Date Obtained	Grade

Languages

No.	Language	Level
1
2
3

Professional Certifications

No.	Professional Qualification	Major	Issuing Institution	Date Obtained	Grade
1
2
3
4

Training Courses

No.	Training Course	Major	Organizing Institution	Date
1
2
3
4
5
6

Previous Experience and Positions

No.	Position	Institution	Period	Reasons for Termination
1
2
3
4
5
6

Have you ever been deprived of your civil or political rights?
Yes ____________________________ No ____________________________

Have you ever been dismissed or removed by a judicial or disciplinary decision?
Yes ____________________________ No ____________________________

Have you ever been prohibited from practicing any profession?
Yes........................................................... No...........................................................

Have you ever been a member of the board of directors of a bank or financial institution or a general manager thereof, or had a direct connection to its management, and it was classified by a judicial decision or the license granted to it was revoked due to violation of the law?
Yes........................................................... No...........................................................

Were you suspended from work pursuant to Article (6/119) of the Banks Law?
Yes........................................................... No...........................................................

Are you currently a member of the board of directors of any financial institution or local or foreign bank?
Yes........................................................... No...........................................................

Are you currently a member of the board of directors of any other joint-stock company?
Yes........................................................... No...........................................................
If the answer is yes

No.	Company Name	Date Membership Started	Share Percentage
1	.............	..................	................
2	.............	..................	................
3	.............	..................	................

Are you currently a member of the board of directors of any commercial company?
Yes........................................................... No...........................................................
If the answer is yes

No.	Company (or Bank) Name	Date Membership Started	Share Percentage
1	.............	..................	................
2	.............	..................	................

Is there any kinship between you or any family member and members of the board of directors or the General Manager (in the bank where you are appointed)?
Yes........................................................... No...........................................................
If the answer is yes

No.	Name	Role	Kinship Relation
1	.............	.............	.............
2	.............	.............	.............
3	.............	.............	.............

Do you manage an office for accounting and legal audit, or practice this profession as a certified public accountant, or hold the position of board member of an audit or accounting firm?
Yes........................................................... No...........................................................
If the answer is yes:
State the name of the office and the date of practicing the position: ...........................................................

Do you manage a real estate valuation office or an engineering office?
Yes........................................................... No...........................................................
If the answer is yes:
State the name of the office and the date of practicing the position: ...........................................................

I certify that the data contained in my answers to the questions mentioned above is complete and correct, and I undertake to notify the Central Bank of Libya immediately upon becoming aware of any changes to this data.

Name: .........................................................
Signature: ......................................................
Date: ......................................................

Attach copies of all documentary evidence related to academic and professional qualifications and practical experience, as well as personal identification.