The Development of the Legal Framework Governing the Shariah Committee of the Islamic Banking and Takaful Institutions in Malaysia

• Main Author: Hussain, Mohammad Azam
• Format: Article
• Language: English
• Published: UUM Press 2016
• Subjects: HG Finance
• Online Access: https://repo.uum.edu.my/id/eprint/29548/1/IJIB%2001%2002%202016%2068-89.pdf; https://doi.org/10.32890/ijib2016.1.2.4; https://repo.uum.edu.my/id/eprint/29548/; https://e-journal.uum.edu.my/index.php/ijib/article/view/13374; https://doi.org/10.32890/ijib2016.1.2.4
• Institution: Universiti Utara Malaysia

In Malaysia, the Sharῑᶜah Committee established by Islamic banks and takāfuloperators are subject to the legal frameworkas set out by the legislations governing Islamic financial services. The legal framework of the Sharῑᶜah committee existed since the enforcement of Islamic Banking Act 1983 (Act 276) in year 1983. Since that, improvements have been made by the government to strengthensuch legal framework via a series of legal amendments as well as the introduction of new legislations. Apart from that, the Sharῑᶜah Committee is also governed by the Guidelinesissued by Central Bank of Malaysia to ensure sustainability of Islamic banking and takāfulindustry in Malaysia. This article adopted historical and comparative methods in order to analyse the development of the legal framework governing the SharῑᶜahCommittee of the Islamic banking and takāful institutions in Malaysia. The study found that the legal framework of the SharῑᶜahCommittee is mainly governed by Islamic Financial Services Act 2013 (Act 759) and SharῑᶜahGovernance Framework for Islamic Financial Institutions (CBM/RH/GL 012-3).