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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| Format: | Article |
| Language: | en |
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Penerbit Universiti Kebangsaan Malaysia
2023
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| 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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| author | Ro’fah Setyowati, Mohammad Azam Hussain, Ruzian Markom, Mohd Izzat Amsyar Mohd Arif, |
| author_facet | Ro’fah Setyowati, Mohammad Azam Hussain, Ruzian Markom, Mohd Izzat Amsyar Mohd Arif, |
| author_sort | Ro’fah Setyowati, |
| building | Tun Sri Lanang Library |
| collection | Institutional Repository |
| content_provider | Universiti Kebangsaan Malaysia |
| content_source | UKM Journal Article Repository |
| continent | Asia |
| country | Malaysia |
| 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 |
| id | my-ukm.journal.21978 |
| institution | Universiti Kebangsaan Malaysia |
| language | en |
| publishDate | 2023 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| record_format | eprints |
| 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 |
| 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 |
| title | 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_short | 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 |
| url | http://journalarticle.ukm.my/21978/1/Akademika_19.pdf http://journalarticle.ukm.my/21978/ https://ejournal.ukm.my/akademika/issue/view/1583 |
| url_provider | http://journalarticle.ukm.my/ |