Cover Image

The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim

Ensuring Shariah compliance in their business activities, products and services is paramount for Islamic Financial Institutions (IFIs) to preserve public confidence. However, the occurrence of occasional Shariah noncompliance (SNC) incidents is unavoidable, and these are triggered for various reason...

Full description

Saved in:
Bibliographic Details
Main Authors: Mohamed, Marina, Ibrahim, Norhazlina
Format: Article
Language:English
Published: Universiti Teknologi MARA Selangor 2023
Subjects:
Banking
Online Access:https://ir.uitm.edu.my/id/eprint/94616/1/94616.pdf
https://ir.uitm.edu.my/id/eprint/94616/
http://myjms.mohe.gov.my/index.php/JEEIR
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.uitm.ir.94616
record_format eprints
spelling my.uitm.ir.946162024-05-30T09:06:04Z https://ir.uitm.edu.my/id/eprint/94616/ The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim jeeir Mohamed, Marina Ibrahim, Norhazlina Banking Ensuring Shariah compliance in their business activities, products and services is paramount for Islamic Financial Institutions (IFIs) to preserve public confidence. However, the occurrence of occasional Shariah noncompliance (SNC) incidents is unavoidable, and these are triggered for various reasons. Thus, IFIs must ensure appropriate communication and disclosure regarding the occurrence of SNC events; the purification of SNC income; and the adoption of control measures for financial information users. Despite the importance of SNC disclosure, few studies have analysed in detail the disclosure of SNC events. Thus, this study aimed to investigate SNC events disclosure in detail for all 16 Islamic banks in Malaysia from 2015 to 2020. While all the Islamic commercial banks in Malaysia were found to disclose and report SNC occurrences in their annual reports, complete compliance with BNM requirements had yet to be reached. Several banks were found to have made commendable efforts to make useful information available, such as root causes, linked Islamic contracts and the tracking of SNC income disposal. However, fewer banks disclosed information on the nature of SNC events, rectification activities and the control measures taken in response to these events. Continuous monitoring and strong enforcement by the regulator are required to ensure that SNC events disclosure can be streamlined across all banks. These findings add value to the information users by assuring them of the Islamic banks' accountability in terms of transparency, as well as their effectiveness in managing and mitigating SNC events. Universiti Teknologi MARA Selangor 2023-05 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/94616/1/94616.pdf The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim. (2023) Journal of Emerging Economies & Islamic Research <https://ir.uitm.edu.my/view/publication/Journal_of_Emerging_Economies_=26_Islamic_Research/>, 11 (2). pp. 48-74. ISSN 2289-2559 http://myjms.mohe.gov.my/index.php/JEEIR
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Banking
spellingShingle Banking
Mohamed, Marina
Ibrahim, Norhazlina
The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim
description Ensuring Shariah compliance in their business activities, products and services is paramount for Islamic Financial Institutions (IFIs) to preserve public confidence. However, the occurrence of occasional Shariah noncompliance (SNC) incidents is unavoidable, and these are triggered for various reasons. Thus, IFIs must ensure appropriate communication and disclosure regarding the occurrence of SNC events; the purification of SNC income; and the adoption of control measures for financial information users. Despite the importance of SNC disclosure, few studies have analysed in detail the disclosure of SNC events. Thus, this study aimed to investigate SNC events disclosure in detail for all 16 Islamic banks in Malaysia from 2015 to 2020. While all the Islamic commercial banks in Malaysia were found to disclose and report SNC occurrences in their annual reports, complete compliance with BNM requirements had yet to be reached. Several banks were found to have made commendable efforts to make useful information available, such as root causes, linked Islamic contracts and the tracking of SNC income disposal. However, fewer banks disclosed information on the nature of SNC events, rectification activities and the control measures taken in response to these events. Continuous monitoring and strong enforcement by the regulator are required to ensure that SNC events disclosure can be streamlined across all banks. These findings add value to the information users by assuring them of the Islamic banks' accountability in terms of transparency, as well as their effectiveness in managing and mitigating SNC events.
format Article
author Mohamed, Marina
Ibrahim, Norhazlina
author_facet Mohamed, Marina
Ibrahim, Norhazlina
author_sort Mohamed, Marina
title The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim
title_short The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim
title_full The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim
title_fullStr The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim
title_full_unstemmed The disclosure of shariah non-compliance (SNC) events by Islamic banks in Malaysia / Marina Mohamed and Norhazlina Ibrahim
title_sort disclosure of shariah non-compliance (snc) events by islamic banks in malaysia / marina mohamed and norhazlina ibrahim
publisher Universiti Teknologi MARA Selangor
publishDate 2023
url https://ir.uitm.edu.my/id/eprint/94616/1/94616.pdf
https://ir.uitm.edu.my/id/eprint/94616/
http://myjms.mohe.gov.my/index.php/JEEIR
_version_ 1800726730690789376
score 13.222552

Similar Items