The Shari'ah governance framework is a unique institutional structure in Islamic banks and financial institutions. Its function is to ensure that the operations of such institutions are Shari'ah compliant. The structure of Shari'ah governance takes different forms in different countries based on the different legal frameworks that govern Islamic banking and financial operations in the respective countries. This paper examines the practice of Shari'ah governance in Islamic banks across jurisdictions.1 The purpose of this study is to provide a better understanding of some different practices of Shari'ah governance, highlight the issues involved, and provide relevant information for guiding the future development of the Shari'ah governance system in the Islamic financial industry. The paper studies Shari'ah governance practices in nine countries: Malaysia, Indonesia, the United Kingdom, Pakistan, Kuwait, the United Arab Emirates, Bahrain, Brunei and Singapore, all of which are significant Islamic financial players.
The study critically analyses and compares statutory provisions of respective jurisdictions as primary data. The primary data is supplemented by library research and empirical evidence gathered from unstructured interviews with selected respondents across jurisdictions. The study finds that there are three main approaches to regulating the function of Shari'ah advisory. Malaysia, Brunei and the UAE are countries that have legally captured the regulatory framework on Shari'ah advisors in their principal legislations such as their Central Bank Act. These countries have specific or dedicated legislation on the Shari'ah governance framework. Indonesia, Kuwait, UK and Bahrain have specific provisions on Shari'ah advisors in their respective Central Bank or Central Regulator’s Act, but there is no specific legislation on Shari'ah governance in these countries. The legal provisions on Shari'ah advisors in Pakistan and Singapore, on the other hand, are limited to guidelines and circulars issued by the respective central banks. Specific provisions on Shari'ah advisors are not found in their principal legislation.
user_id not set
Unfortunately your account does not have the necessary access level to continue.
We would like to suggest that you upgrade account to enjoy more benefits on this website.