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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
SHA0011

TOPIC 3: RULE-MAKING PROCESS IN MODERN ISLAMIC
BANKING AND FINANCE

Learning Objectives

At the end of the topic, you will be able to:
• Understand the concepts of Sharī’ah Governance Framework in Islamic Banking and
Finance in Malaysia
• Understand the roles and duties of Sharī’ah Advisory Council of Bank Negara Malaysia
and Securities Commission
• Understand the roles and duties of Sharī’ah Committee
• Understand the roles and duties of Sharī’ah Advisor at the fund management level
• Understand the roles and duties of Sharī’ah Officer at an Institutional level

UNIT 1: SHARĪ’AH GOVERNANCE FRAMEWORK IN ISLAMIC BANKING AND
FINANCE IN MALAYSIA

Islamic Financial Institutions (IFIs) and typical Financial Institutions share a
common institutional arrangement of corporate governance framework except
the additional set of organizational arrangement in IFIs to meet the requirement
of Sharī’ah compliance in all aspects of its business transactions and operations.

Table 2 : Financial Institutions Governance Framework

Islamic Financial Regulators in Malaysia
Bank Negara Malaysia (BNM) and Securities Commission (SC) are the regulators
of Malaysia Islamic financial system. Both BNM and SC have put in place the
right framework in ensuring the compliance of IFIs to the precept of Sharī’ah.