Can Shari’ah Governance Framework be the Way Forward for Islamic Finance?
September 25th, 2018
By Md Akther Uddin, PhD
This paper attempts to give a brief overview of existing Shari’ah Governance framework in Malaysia, compare with AAOIFI and IFSB standards and guidelines, identify current issues, and recommend measures to improve existing practices. The study finds that a great number of researches have been carried out to study the Shari’ah governance framework in Malaysia, Indonesia, GCC, MENA, UK, and other OIC member countries. It can be concluded that the plurality in Shari’ah governance practice across regions and countries may ensure success and support innovation in the short run, but, in order to establish credibility and promote Islamic Finance as a comprehensive financial system in the long run, uniformity is desirable. A sustainable and viable Shari’ah governance framework, which will not only provide credibility to IFIs but also ensure transparency, trust, ethical behavior, underlying faith and belief and ethics and also help to protect the stakeholders right and fulfill the broader principle of Maqasid al-Shari’ah (foundational goals of the Shari’ah).