Malaysia's Islamic Financial Services Act 2013 and Shari'ah governance: an analytical approach

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Shari'ah compliance is the raison d’etre for the existence of Islamic banking and finance industry. A robust Shari'ah compliance can be achieved through an effective Shari'ah governance system. In view of its importance, Malaysia has in the last three decades developed robust legal and regulatory framework that aims to accommodate and facilitate the evolution of Shari'ah governance structure in its Islamic banking and finance industry. The implementation of the current Shari'ah governance framework has guided and assisted the Islamic banking and finance industry in mitigating the cost of Shari'ah risk in their operations and business. As a result, consumers' trust and confidence in the banking and finance sector is secured and sustained. Based on this background, this chapter explores the historical development of the Malaysian Shari'ah governance infrastructures that took place before and after the promulgation of the Islamic Financial Services Act in 2013 (IFSA). The implications of IFSA on the Shari'ah governance system are hereafter analyzed. In general, IFSA has shifted the Shari'ah governance landscape into a more meaningful governance through its inclusivity and uniformity approach.
Islamic Financial Services Act , Shari'ah governance , Shari'ah compliance , Shari'ah standards , Shari'ah audit , Malaysia
Kasri, Noor Suhaida (2019). Malaysia's Islamic Financial Services Act 2013 and Shari'ah governance: an analytical approach. In Toseef Azid, Ali Abdullah Alnodel & Muhammad Azeem Qureshi (Eds.), Research in corporate and Shari'ah governance in the Muslim world: theory and practice (pp. 227-238). United Kingdom: Emerald Publishing Limited.
Emerald Publishing Limited

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