Sharia assurance in Islamic financial and banking industry : an analytical and comparative study

• Main Author: Albulooshi, Ghalib Mohammad Rahim
• Published: University of Bristol 2015
• Subjects: 332.1
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.683404

This research aims to present a library-based study of the current institutional sharia governance and main national supervision frameworks in selected Muslim countries, namely, the Kingdom of Bahrain, the United Arab Emirates (Dubai), the State of Kuwait, the Sultanate of Oman, and the Federation of Malaysia. Analysing and comparing diverse practices of important aspects of sharia governance and supervision, the study argues that the existence of a comprehensive framework for sharia assurance is essential at both institutional and national levels. It argues that the current institutional sharia governance and national sharia supervision, relying on internal tools, does not provide customers with sufficient compliance assurance of the financial institution and its activities with sharia. Instead, it potentially raises serious governance issues and operational concerns, mainly resulting from the shortage of sharia scholars, the scope of sharia-compliance supervision, the concept and use of external auditors, independence and conflicts of interest, the legal status of the SSB and its pronouncements, and the accountability of the SSB. Further, the thesis underlines and discusses the efficacy of a number of practical solutions at institutional, national and international levels. These represent internal and external measures for sharia governance and supervision, mainly the segregation of roles of sharia scholars, the emergence of sharia consultancies, a global professional body for sharia scholars, the establishment of an international sharia rating system, and the emerging trend of centralisation . In evaluation of the proposed solutions, the thesis notes and promotes the growing trend of centralisation of sharia governance and supervision at the national level, which is believed to help in minimizing the main concerns underlined. Nonetheless, it remains to be seen which emerging model of central sharia authority in the selected Muslim countries would prove to be more efficient in thi s regard .