Systematic Review: Shariah Non-Compliance (SNC) In Islamic Banking And Finance

Muhammad Ridhwan  Ab. Aziz; Noor Naemah Abdul Rahman

Authors

Muhammad Ridhwan Ab. Aziz Professor
Noor Naemah Abdul Rahman Professor

Keywords:

Islamic, Banking, Finance, Shariah, Non-Compliance

Abstract

The requirement of the majority of Muslims to conduct and enjoy banking and financial services has contributed to the growth of the Islamic banking and finance sector, which has become an alternative to conventional banking and finance sector. However, non-compliance with Shariah law has become a hurdle for both banks and customers, which has resulted to financial losses for both parties. The management of Shariah non-compliance (SNC) events is significant for Islamic banks in order to provide the community with safe and transparent commercial transactions. As a result, the purpose of this study is to conduct research into the pertinent literatures that are related to Shariah non-compliance. A content analysis of the pertinent literature that is related to Shariah non-compliance events is included in the study approach that was used, which was a systematic review of the relevant literature. The findings as a whole showed that a better and sound Shariah governance framework is the key to mitigating Shariah non-compliance risk in Islamic financial institutions, which comprises of a collection of rules and guidelines.

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Author Biographies

Muhammad Ridhwan Ab. Aziz, Professor

Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM).

Noor Naemah Abdul Rahman, Professor

Department of Fiqh and Usul, Academy of Islamic Studies, University of Malaya.

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