KUALA LUMPUR, Monday 14 February 2011 (Bernama) -- The new Shariah Governance Framework for Islamic Financial Institutions 2011 introduced by Bank Negara Malaysia (BNM) last October would be a catalyst in bringing the country's Islamic finance industry forward, says a researcher.
International Shari'ah Research Academy for Islamic Finance (ISRA) executive director Dr Mohd Akram Laldin said the framework is aimed at enhancing and strengthening the Syariah element in Islamic financial institutions and for them to attain a syariah-based operating environment.
"This framework is a catalyst to bring about progress for the industry and to ensure that the syariah institutions are being properly operated by all the parties," he told reporters after a dialogue session here today.
Mohd Akram was one of the panelists at a dialogue session here on the Shariah Governance Framework for Islamic Financial Institutions organised by Zaid Ibrahim & Co.
On the framework, he said it had been issued at the right time considering that the country's Islamic finance industry was on the expansion mode.
"We are a step ahead in issuing such a framework," he said, adding that it was the first and one-of-a-kind framework in the world.
Issued by the central bank October last year, the framework replaced the previous Guidelines on the Governance of Shariah Committee for Islamic Financial Institutions (2004). It regulates the governance of syariah committee of Islamic financial institutions.
The new framework has enhanced the roles of the key organs of an Islamic financial institution including the board of directors, syariah advisory committee and management in ensuring compliance.
The framework also provides a comprehensive guide in discharging matters relating to Islamic principles and outlining and clarifying the functions of syariah review, audit, risk management and research.
All Islamic financial institutions in Malaysia have been given until June this year to comply with the new framework.