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Shariah Governance Practices of Malaysian Islamic Banks in the Light of Shariah Compliance

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dc.contributor.authorMasruki, Rosniaen_US
dc.contributor.authorHanefah, Mustafa Mohden_US
dc.contributor.authorDhar, Bablu Kumaren_US
dc.date.accessioned2024-05-29T03:27:14Z
dc.date.available2024-05-29T03:27:14Z
dc.date.issued2020
dc.descriptionVolume :13en_US
dc.description.abstractIslamic banks in Malaysia must conform to Shariah rules in their operations. Islam's prohibition of usury is the main justification for the necessity of Islamic banks (IBs). Indeed, the implementation of Shariah governance through the Shariah Supervisory Board (SSB) is essential to monitor and govern the operations of IBs for ensuring the integrity, credibility and transparency of 'Bs. Failure to conform to good Shariah governance practices will result in the IBs' failure to uphold Shariah in their operations. The objective of this paper is to examine the Shariah governance practices of lBs in Malaysia. This study employs content analysis to identify the extent to which the Shariah governance is being practised by IBs. A disclosure checklist was developed based on a review of previous studies and regulations, namely the Guidelines of Financial Reporting for Islamic Financial Institutions (GP8-i) 2005, Islamic Financial Services Act (IFSA) 2013 and Shariah Governance Framework (SGF) 2010 and Exposure Draft of SGF 2017. It consists of five dimensions: i) Shariah Committee; three control functions under Shariah governance, ii) Shariah Risk Management, iii) Shariah Review, iv) Shariah Audit and v) Transparency and Disclosure. The findings suggest that IBs were more likely to disclose Shariah committee attributes, whereas Shariah control function items (Shariah risk management, Shariah review, Shariah audit) and transparency and disclosure were less likely to be disclosed, indicating that lBs seem to be heavily dependent on the competency of SSB members rather than the Shariah compliance mechanisms. This study contributes to the interest of IBs and the Shariah Committee themselves to consider various mechanisms of Shariah governance practices to garner trust and confidence of a wide range of stakeholders. Future studies can be carried out to suggest best practices of Shariah compliance mechanisms in relation to the SGF issued by the Central Bank of Malaysia.en_US
dc.identifier.doi10.17576/AJAG-2020-13-08
dc.identifier.epage97
dc.identifier.issn2180-3838
dc.identifier.scopusWOS:000584468200007
dc.identifier.spage91
dc.identifier.urihttps://ejournal.ukm.my/ajac/article/view/34158
dc.identifier.urihttps://oarep.usim.edu.my/handle/123456789/12196
dc.identifier.volume13
dc.languageEnglish
dc.language.isoen_USen_US
dc.publisherPenerbit Univ Kebangsaan Malaysiaen_US
dc.relation.ispartofAsian Journal Of Accounting And Governanceen_US
dc.subjectIslamic banksen_US
dc.subjectShariah Supervisory Board (SSB)en_US
dc.subjectShariah Committeeen_US
dc.subjectShariah Governanceen_US
dc.subjectDisclosureen_US
dc.titleShariah Governance Practices of Malaysian Islamic Banks in the Light of Shariah Complianceen_US
dc.typeArticleen_US
dspace.entity.typePublication

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