Compliance with Shariah requirements is a prerequisite for ensuring the legitimacy and integrity of Islamic financial products and services. It is essential for an Islamic financial institution (IFI) to establish a sound operational framework and adequate infrastructure to ensure that its conduct is consistent with Shariah.
The Shariah contract-based regulatory policy is intended to promote consistency of Shariah contract applications in Islamic financial products and services. This policy is envisaged to strengthen legal certainty and Shariah compliance practices by IFIs.
This policy document aims to–
(a) provide reference on the Shariah rulings applicable to bai al-sarf;
(b) set out key operational requirements for the implementation of bai al-sarf; and
(c) promote end-to-end compliance with Shariah requirements, which further promote sound banking practices and safeguard consumer interests.
This policy document sets out the following:
(a) salient features and essential conditions of bai` al-sarf in Part B; and
(b) regulatory and supervisory expectations for the operational requirements on governance and oversight, structuring, risk management as well as business and market conduct in Part C.
This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking
