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The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia

The Shariah Authority plays an essential role in confirming that the products and services of Islamic finance companies comply with Shariah principles. The Shariah Advisory Board and the National Shariah Council are the highest authorities for determining Islamic law for Islamic financial tran...

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Main Authors: Ro’fah Setyowati,, Mohammad Azam Hussain,, Ruzian Markom,, Mohd Izzat Amsyar Mohd Arif,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2023
Online Access:http://journalarticle.ukm.my/21978/1/Akademika_19.pdf
http://journalarticle.ukm.my/21978/
https://ejournal.ukm.my/akademika/issue/view/1583
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spelling my-ukm.journal.219782023-07-28T04:00:02Z http://journalarticle.ukm.my/21978/ The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia Ro’fah Setyowati, Mohammad Azam Hussain, Ruzian Markom, Mohd Izzat Amsyar Mohd Arif, The Shariah Authority plays an essential role in confirming that the products and services of Islamic finance companies comply with Shariah principles. The Shariah Advisory Board and the National Shariah Council are the highest authorities for determining Islamic law for Islamic financial transactions in Malaysia and Indonesia, respectively -the Shariah Advisory Board of Malaysia reports to the Central Bank of Malaysia. At the same time, the National Shariah Council of Indonesia was part of the Indonesian Ulema Council, a non-governmental organisation. The latter is thus part of the regulatory framework and complements the financial system. As the two councils are different in nature, the rulings have different implications for the community. This article aims to analyse the status of the Shariah Authority in terms of the establishment and procedures for deriving the rulings. The research is qualitative and uses content analysis by looking at the legislation that governs these institutions. The research findings show that the Shariah authority in both countries has the same function in the industry but differs in terms of the creation of the rulings, the procedures and the attachment to the Islamic financial institutions, courts and arbitrators. In conclusion, the article proposes several improvements by the relevant agencies to strengthen the framework of the Shariah authority in Malaysia and Indonesia, leading to accountable administration to the industry, the community and the state. Penerbit Universiti Kebangsaan Malaysia 2023-04 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/21978/1/Akademika_19.pdf Ro’fah Setyowati, and Mohammad Azam Hussain, and Ruzian Markom, and Mohd Izzat Amsyar Mohd Arif, (2023) The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia. AKADEMIKA, 93 (1). pp. 251-259. ISSN 0126-5008 https://ejournal.ukm.my/akademika/issue/view/1583
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description The Shariah Authority plays an essential role in confirming that the products and services of Islamic finance companies comply with Shariah principles. The Shariah Advisory Board and the National Shariah Council are the highest authorities for determining Islamic law for Islamic financial transactions in Malaysia and Indonesia, respectively -the Shariah Advisory Board of Malaysia reports to the Central Bank of Malaysia. At the same time, the National Shariah Council of Indonesia was part of the Indonesian Ulema Council, a non-governmental organisation. The latter is thus part of the regulatory framework and complements the financial system. As the two councils are different in nature, the rulings have different implications for the community. This article aims to analyse the status of the Shariah Authority in terms of the establishment and procedures for deriving the rulings. The research is qualitative and uses content analysis by looking at the legislation that governs these institutions. The research findings show that the Shariah authority in both countries has the same function in the industry but differs in terms of the creation of the rulings, the procedures and the attachment to the Islamic financial institutions, courts and arbitrators. In conclusion, the article proposes several improvements by the relevant agencies to strengthen the framework of the Shariah authority in Malaysia and Indonesia, leading to accountable administration to the industry, the community and the state.
format Article
author Ro’fah Setyowati,
Mohammad Azam Hussain,
Ruzian Markom,
Mohd Izzat Amsyar Mohd Arif,
spellingShingle Ro’fah Setyowati,
Mohammad Azam Hussain,
Ruzian Markom,
Mohd Izzat Amsyar Mohd Arif,
The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia
author_facet Ro’fah Setyowati,
Mohammad Azam Hussain,
Ruzian Markom,
Mohd Izzat Amsyar Mohd Arif,
author_sort Ro’fah Setyowati,
title The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia
title_short The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia
title_full The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia
title_fullStr The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia
title_full_unstemmed The role of shariah authority in enhancing the Islamic financial system in Malaysia and Indonesia
title_sort role of shariah authority in enhancing the islamic financial system in malaysia and indonesia
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2023
url http://journalarticle.ukm.my/21978/1/Akademika_19.pdf
http://journalarticle.ukm.my/21978/
https://ejournal.ukm.my/akademika/issue/view/1583
_version_ 1772812469830418432
score 13.211869

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