Perceptions on Shariah Governance Framework of Islamic Banking In Oman: Issues and Challenges
تصورات حول إطار الحوكمة الشرعية للصيرفة الإسلامية في عمان: قضايا وتحديات
DOI:
https://doi.org/10.31436/ijfus.v3i2.160Abstract
Oman has adopted the Sharī’ah governance framework which is very similar to other countries that face issues of Sharī’ah governance such as independence, competency, and disclosure. Therefore, this study will examine these main issues in the Sharī’ah governance framework of Oman. This paper aims to examine the current practice of Sharī’ah governance in Oman from the perspectives of Sharī’ah advisors, bankers and regulators. The paper focuses on the present practice of Sharī’ah governance framework and related issues such as independence, competency, and disclosure. The paper uses the descriptive research method in terms of collecting secondary data and information for the literature review. Since the availability of data and information on Sharī’ah governance practices in Oman is very limited, a semi-structured interview was conducted with Sharī’ah advisors, officers and regulators to explore their perceptions on Sharī’ah governance and related issues. The findings of the paper reveal that the regulators have put in place an excellent Sharī’ah governance framework and it may be considered as one of the best frameworks in the Islamic banking industry. However, there are shortcomings and weaknesses in the current practice of Sharī’ah governance frameworks, such as lack of experience, lack of research in the field of Islamic banking and finance and low position of internal Sharī’ah review. This study provides and proposes some recommendations for enhancing the present Sharī’ah governance framework.
Keywords: Shariah, Governance, Oman, Framework, Islamic Banking.
Downloads
Metrics
References
AOIFI (2015). Governance Standard for IFIs, No. 1-7. Bahrain: AAOIFI.
Abdul Aziz, A. (2012). Sharī’ah Governance Challenges Ahead. MPRA Paper No. 47772, posted 24. June 2013 04:09 UTC.
Al-Mawardī, A. (1989). Al-Ahkām al-Sultāniyya Wal-Wilāyāt al-Dīniyya, ed. Ahmad Al-Baghdadi. Kuwait: Dar Ibn Qutaibah, 315. Sharī’ah Governance Book, 60.
Bakar, M.D. (2002). The Sariah Supervisory Board and Issues of Sharī’ah Rulings and Their Harmonization in Islamic Banking and Finance. In Archer, S. and Riffat, A. A. K. (Eds), Islamic Finance Innovation and Growth. Bahrain: Euromoney Books and AAOIFI.
Basel III. (2017). International Regulatory Framework for Banks. The Bank for International Settlements. www.bis.org/bcbs/basel3.htm.
Belder, T., Sapte, D., & LLP. (2008). Sharia Supervisory Boards and Sharia Compliance. In Millar, R & Anwar, H. Hand book Islamic Finance: A Guide for International Business and Investment GMB Publishing Ltd, (185- 192).
Blee, K.M., & Taylor, V. (2002). Semi-Structured Interviewing in Social Movement Research. In Klandersmans, B. and Staggenborg, S. (Eds.), Methods of Social Movement Research, 92-117. Minneapolis: University of Minnesota Press.
Bryman, A. (2001). Social Research Methods. Oxford: Oxford University Press.
CBO. (2012). Islamic Banking Regulatory Framework. Central Bank of Oman Muscat.https://cbo.gov.om/Pages/IslamicBankingRegulatoryFramework.aspx
Farook, S., & Farroq, M. (2011). Sharī’ah Governance for Islamic Finance: Challenges and Pragmatic Solutions. at: http://ssrn.com/abstract=1813483
Garas, S., & Pierce, C. (2010). Sharī’ah Supervision of Islamic Financial Institutions. Journal of Financial Regulation and Compliance, 18(4), 386-407.
Ginena, K., & Hamid, A. (2015). Foundation of Sharī’ah governance of Islamic banks. Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom.
Grais, W., & Pellegrini, M. (2006). Corporate Governance and Sharī’ah Compliance in Institutions Offering Islamic Financial Services. World Bank Policy Research Working Paper No. 4054. Available at: http://wwwwds. worldbank.org/external/default/WDSContentServer/IW3P/IB/2006/11/08/000016406_20061108095535/Rendered/PDF/wps4054.pdf. Access Date: 10th June 2017.
Gruening, H., & Iqbal, Z. (2008). Risk Analysis for Islamic Banks. The World Bank, Washington D.C.
Hamza, H. (2013) " Sharī’ah Governance in Islamic Banks: Effectiveness and Supervision Model". International Journal of Islamic and Middle Eastern Finance and Management, 6(3), 226-237. https://doi.org/10.1108/IMEFM-02-2013-0021
Hasan, Z. (2011). A Survey of Sharī’ah Governance Practices in Malaysia, GCC Countries and the UK: Critical Appraisal. International Journal of Islamic and Middle Eastern Finance and Management, 4(1). 30-51.
Ibn Manzūr, M. (1999). Lisān Al- ‘Arab, (3rd ed.). Beirut: Dar Ihyā Al-turāth Al- ‘Arabi, 3, 164.
ISRA. (2016). Islamic Financial System: Principles and Operations. Kuala Lumpur: International Sharī’ah Research Academy for Islamic Finance.
Lahsasna, A., & Saba, I. (2014). Sharī’ah Governance in the Islamic Financial Institution: Issues and Challenges. 5th International Conference on Business and Economic Research (5th ICBER 2014) Proceeding, 24-25.
Mihajat, I.S. (2018). Shari’ah Governance Framework in Islamic Banking in Oman: Issues and Challenges. Journal of Islamic Banking and Finance, 35(3), 73-83.
Rammal, H.G. (2006). The Importance of Sharī’ah Supervision in Islamic Financial Institutions. Corporate Ownership and Control, 3(3), 204-208.
Wilson, R. (2009). Sharī’ah Governance for Islamic Financial Institutions. ISRA International Journal of Islamic Finance, 1(1), 59-76.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2019 IIUM Press
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The IIUM journal follows the open access policy.
Consent to publish: The Author(s) agree to publish their articles with IIUM Press.
Declaration: The Author(s) declare that the article has not been published before in any form and that it is not concurrently submitted to another publication, and also that it does not infringe on anyone’s copyright. The Author(s) holds the IIUM Press and Editors of the journal harmless against all copyright claims.
Transfer of copyright: The Author(s) hereby agree to transfer the copyright of the article to IIUM Press, which shall have the exclusive and unlimited right to publish the article in any form, including in electronic media. However, the Author(s) will reserve the right to reproduce the article for educational and scientific purposes provided that the written consent of the Publisher is obtained. For the article with more than one author, the corresponding author confirms that he/she is authorized by his/her co-author(s) to grant this transfer of copyright.