Copy of Teal and Ivory Framed Process Infographic

e-Journal IKHLAS

POLICY DOCUMENT

SHARIAH GOVERNANCE

INTRODUCTION

BNM had issued the Shariah Governance Policy Document on 20 September 2019 and the
requirements in this policy document outline the Bank’s strengthened expectations for
effective Shariah governance arrangements that are well integrated with business and

risk strategies of the Islamic financial institutions.
Effective Date : 1 April 2020 & 1 April 2023 *for para 12.5

SGF OVERVIEW : KEY HIGHLIGHTS

Since the introduction of the Shariah Governance Framework for Islamic
Financial Institutions in 2011, the Islamic finance industry in Malaysia has
achieved significant milestones towards institutionalising governance
structures, policies and processes to promote end-to-end Shariah
compliance in Islamic finance operations. Efforts to further strengthen
Shariah governance standards remain a priority to the Bank as good
governance models and practices evolve in tandem with the growing
complexity of the Islamic financial industry. As such, the revised policy
document on Shariah Governance outlines a more integrated

Shariah governance policy and implementation that will impact business
model and strategy of Islamic financial institutions as well as drive
innovation of value-adding Islamic financial products and services through
effective implementation of the Shariah contract-based regulatory
framework.

KEY ORGANS UNDER
SHARIAH GOVERNANCE

CONTROL FUNCTIONS MANAGEMENT

Ensure effective management Ensure compliance with
of Shariah non-compliance risk Shariah at all times

BOARD SHARIAH COMMITTEE

Ensure institutionalisation of Provide objective and
a robust Shariah governance sound Shariah decision or advice
frameworksound Shariah decision

or advice

SECRETARIAT

Provide operational support for
effective functioning of the Shariah

committee

visit [email protected] for more info.

SHARIAH & BUSINESS ADVISORY DEPARTMENT