An analysis of the role and competency of the Shari'ah Committees (SCs) of Islamic Banks and Financial Service Providers

Hassan, Rusni and Ibrahim, Uzaimah and Abdullah, Nurdianawati Irwani and Abdul Aziz, Akhtarzaitie and Sawari, Fuad (2010) An analysis of the role and competency of the Shari'ah Committees (SCs) of Islamic Banks and Financial Service Providers. Project Report. International Shari'ah Research Academy for Islamic Finance (ISRA), Kuala Lumpur.

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Abstract

IFSB’s Guiding Principles on Shari'ah Governance Systems for Institutions Offering Islamic Financial Services defines “Shari'ah governance system” as the set of institutional and organisational arrangements through which an institution offering Islamic financial services oversees Shari'ah compliance, i.e., that Islamic banking products and operations are in accord with Shari'ah principles. This requires the establishment of a Shari'ah advisory board. The Shari'ah governance of Islamic financial institutions (IFIs) in Malaysia consists of two components: the Shari'ah apex body, which is the Shari'ah Advisory Council (SAC) established by the Commission, and the Shari'ah advisors appointed by the respective institutions (Shari'ah Committees). Their roles are directing, reviewing, supervising and approving or rejecting the activities of IFIs in order to ensure compliance with Shari'ah rules and principles. The extent to which Islamic banks comply with Shari'ah principles is, to a great extent, determined by the role of such boards. Consequently, this body needs sufficient authority to enable its members to perform their functions effectively. However, many issues have arisen about the role and competency of Shari'ah advisors. This research aims to examine the current practice of Shari'ah advisory in Malaysia from the perspectives of advisors, bankers and regulators. The research focuses on the roles and functions practically played by the Shari'ah advisors and the IFIs’ expectations of them. Problems faced by the Shari'ah advisors, bankers and regulators need to be specifically identified so that measures to bridge the gaps between them may be proposed. This will ensure a harmonious relationship between all stakeholders as well as ensuring that the dayto-day running of IFIs will be compliant with Islamic law.

Item Type:	Monograph (Project Report)
Additional Information:	1860/5242
Uncontrolled Keywords:	Shari'ah Committees (SCs) of Islamic Banks and Financial Service Providers, Shari'ah advisory board, Islamic banking, Islamic law
Subjects:	H Social Sciences > HG Finance > HG1501 Banking H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance. K Law > KBP Islamic Law > KBP1 Islamic law.Shariah.Fiqh > KBP174 Observances and practice of Islam K Law > KBP Islamic Law > KBP1 Islamic law.Shariah.Fiqh > KBP490 Furūʻ al-fiqh. Substantive law. Branches of law. > KBP3526 Public finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Islamic Revealed Knowledge and Human Sciences > Department of Fiqh and Usul al-Fiqh
Depositing User:	Dr Mohd. Fuad Md. Sawari
Date Deposited:	13 Dec 2011 12:59
Last Modified:	27 Dec 2011 09:25
URI:	http://irep.iium.edu.my/id/eprint/5242

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