An Analysis of the Legal and Governance Framework for Protection and Promotion of the Rights of the Islamic Bank, Customers, and Community: A Case Study of Brunei Darussalam

Abstract

Islamic corporate governance is aimed at maintaining Shariah compliance in the Islamic finance industry. Thus, it seeks to achieve the strategic objectives of Shariah (maqāṣid al-Shariah). Accordingly, it should protect and promote the stakeholders’ rights as long these rights are recognized by Shariah. However, the literature on the role of Islamic corporates in protecting and promoting the rights of the stakeholders is not sufficient in contrast to conventional corporate governance. This paper fills this gap by looking into how far Shariah board in Brunei Darussalam protect and promote the rights of the bank, customer, and community with reference to the maqāṣid (objectives) of Shariah, specifically, the maqāṣid of wealth as well as the laws of the Brunei Darussalam. After the discussion, it can be concluded that Shariah boards in Brunei Darussalam significantly protect and promote the rights of the bank, the customer, and the community but they prioritize the bank over the customer, especially, in the deposit products and the attached facilities. This paper makes use of legal and content analysis methods.