Shariah Governance Framework: Objectives & Requirements

Shariah governance framework is a comprehensive system that defines a set of appropriate national and institutional measures, arrangements, requirements, organs and policies for Islamic financial institutions. The overall objective of Shariah governance framework is establishing an effective and independent oversight of Shariah compliance over Islamic financial institutions’ activities. It will provide a holistic and systematic approach for managing Shariah non-compliance risk at institutional level and industrywide. It also assures the regulators of financial stability in Islamic financial institutions to be well-protected against any potential loss due to Shariah non-compliant activities.