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The Impact of Shariah Governance to Financial and Non- Financial Performance in Islamic Financial Institutions (IFIs): A Literature Survey

Md Zain, Siti Noradibah and Shafii, Zurina (2018) The Impact of Shariah Governance to Financial and Non- Financial Performance in Islamic Financial Institutions (IFIs): A Literature Survey. International Journal of Islamic Business (IJIB), 3 (2). pp. 27-40. ISSN 0127- 662X

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Abstract

The main objectives of Islamic Financial Institutions (IFIs) are to achieve Shariah compliance and to fulfil Muslims requirement towards obedience and worship to Allah (SWT). In relation to that, the Shariah governance framework was introduced by Bank Negara Malaysia (BNM), who acts as the regulator, to ensure that proper Shariah governance is practiced by IFIs. It is vital to highlight the Shariah governance practice in relation to IFIs performance. This is to demonstrate the significance of its adoption for the measurement of financial and non-financial performance so that the performance criteria could be easily monitored within IFIs to ascertain the entire operations and all transactions comply with Shariah. The main aim of the paper is to highlight Shariah governance factors affecting the performance of IFIs as discussed in the literature. The literature survey discovered that Shariah Committee (SC), Shariah risk, Shariah audit as well as disclosure and transparency were identified as governance measures linked to IFIs performance. However, little research exists on the role of Shariah review function. Despite that, the regulator has made the function compulsory for adoption within IFIs. This study aims to benefit the industry players to better understand the impact of each Shariah governance functions on their performance as financial industry works within defined financial and non-financial indicators.

Item Type: Article
Uncontrolled Keywords: Shariah governance, Performance, Islamic financial institutions
Subjects: H Social Sciences > HG Finance
Divisions: Islamic Business School
Depositing User: Mrs Nurin Jazlina Hamid
Date Deposited: 29 May 2023 08:49
Last Modified: 29 May 2023 08:49
URI: https://repo.uum.edu.my/id/eprint/29479

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