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Exploring the workings of Shari’ah Supervisory Board in Islamic finance: a perspective of Shari’ah scholars from GCC

Al Mannai, M.; Ahmed, H.

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Authors

M. Al Mannai



Abstract

Islamic finance continues to gain popularity regionally, internationally and both among the Muslim and non-Muslim countries. The Islamic Financial Institution (IFI) differs from its conventional counterpart in its governance structure. It is imperative for the IFI to maintain Shari’ah compliance in all its dealings. Hence, an essential element in the IFI is its Shari’ah Supervisory Board (SSB) and its Shari’ah Governance system. This paper empirically examines the SSB’s structure, and Shari’ah supervision function directly from the SSB members themselves. Right from their appointment, mandates and responsibiities, how they function, to their views on Shari’ah risk, Shari’ah compliance, and to how Shari’ah review and reporting is performed. The findings reveal issues related to the flow of information, governance of SBB and independence of Shari’ah supervision and Shari’ah review as some of the key issues that would need to be addressed/strengthened to enhance confidence, and contribute to the credibility of the of IFI and the Islamic finance market. The opinions expressed are towards having some regulatory involvement that would contribute to the enhancement of supervision.

Citation

Al Mannai, M., & Ahmed, H. (2019). Exploring the workings of Shari’ah Supervisory Board in Islamic finance: a perspective of Shari’ah scholars from GCC. The Quarterly Review of Economics and Finance, 74, 97-108. https://doi.org/10.1016/j.qref.2018.05.017

Journal Article Type Article
Acceptance Date May 26, 2018
Online Publication Date May 29, 2018
Publication Date Nov 30, 2019
Deposit Date May 31, 2018
Publicly Available Date Mar 28, 2024
Journal Quarterly Review of Economics and Finance
Print ISSN 1062-9769
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 74
Pages 97-108
DOI https://doi.org/10.1016/j.qref.2018.05.017
Keywords Shari’ah Supervisory Board, Shari’ah Governance, Shari’ah independence, Islamic Financial Institutions, Gulf Cooperation Council (GCC).
Public URL https://durham-repository.worktribe.com/output/1357868

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