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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
SHA0011

UNIT 2: ROLES AND DUTIES OF SHARIAH ADVISORY COUNCIL (SAC) OF BNM
AND SC

Roles and Duties of SAC of BNM
1. The SAC has been given the mandate to ascertain the Islamic law for
the purposes of Islamic banking business, takaful business, Islamic
financial business, Islamic development financial business, or any
other businesses, that are based on Sharī‘ah principles and are supervised
and regulated by BNM.

2. As the reference body and advisor to BNM on Sharī‘ah matters, the
SAC is also responsible for validating all Islamic banking and takaful
products to ensure their compatibility with Sharī‘ah principles.

3. In addition, the SAC advises BNM on any Sharī’ah issues pertaining to
Islamic financial business or transactions of BNM, as well as other
related entities. In the recent provisions of the Central Bank of Malaysia
Act 2009, the roles and functions of the SAC is accorded the status as
the sole authoritative body on Sharī’ah matters pertaining to Islamic
banking, takaful and Islamic finance in Malaysia.
4. In addition, the courts and arbitrator are also required to refer to the
rulings of the SAC for any proceedings relating to Islamic financial
business, and such rulings shall be binding. The SAC comprises prominent
scholars and Islamic finance experts, whom are qualified individuals
with vast experience and knowledge in various fields, especially in
finance and Islamic law

Roles and Duties of SAC of SC

1. The SAC was given the mandate to ensure that the running of the
Islamic capital market (ICM) complies with Sharī’ah principles. Its
scope of jurisdiction is to advise the SC on all matters related to the
comprehensive development of the ICM, and functions as a reference
centre for ICM-related issues.

2. The SAC is also responsible for issuing a list of Shariah-compliant securities
(formerly known as list of Shariah-approved securities). The list is
constantly updated and the SC announces the updated list twice a
year.

UNIT 3 : ROLES AND DUTIES OF SHARĪ’AH COMMITTEE
The Sharī’ah committee is expected to understand that in the course
of discharging the duties and responsibilities, they are responsible and
accountable for all Sharī’ah decisions, opinions and views provided by them.
Among others, they are expected to: