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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
SHA0011

1. Advise the board and IFI

The Sharī’ah committee is expected to advise the board and provide
input to the IFI on Sharī’ah matters in order for the IFI to comply with
Sharī’ah principles at all times.

2. Endorse Shariah policies and procedures
The Sharī’ah committee is expected to endorse Sharī’ah policies and
procedures prepared by the IFI and to ensure that the contents do
not contain any non-Sharī’ah compliant elements.

3. Endorse and validate relevant documentations
To ensure that the products of the IFI comply with Sharī’ah principles,
the Sharī’ah committee must approve:

a. The terms and conditions contained in the forms, contracts,
agreements or other legal documentations used in executing
the transactions; and

b. The product manual, marketing advertisements, sales illustrations
and brochures used to describe the products.

4. Assess work carried out by the Sharī’ah review and Sharī’ah audit
To assess the work carried out by the Sharī’ah review and Sharī’ah
audit complies with Sharī’ah matters. It is the duty of the Sharī’ah
committee to provide their assessment of Sharī’ah compliance and
assurance information in the annual report.

5. Assist related parties on Sharī’ah matters

The related parties of the IFI such as its legal counsel, auditor or consultant
may seek advice on Sharī’ah matters from the Sharī’ah committee
and the Sharī’ah committee is expected to provide the necessary
assistance to the requesting party.

6. Advise on matters to be referred to the SAC of BNM
The Sharī’ah committee may advise the IFI to consult the SAC on
Sharī’ah matters that cannot be resolved internally.

7. Provide written Sharī‘ah opinions

The Sharī’ah committee is required to provide written Sharī’ah opinions
in circumstances where the IFI makes reference to the SAC of BNM
for further deliberation, or where the IFI submits applications to the
BNM for new product approval.