Shari’a Governance in Bahrain: Analysing the Islamic Banking Industry’s Implementation of the Newly Issued Regulatory Shari’a Governance Module

Abdulrahman Al-Saadi, M. Kabir Hassan and Ahmed Mansoor Alkhan
Additional contact information
Abdulrahman Al-Saadi: Department of Islamic Banking, University of Bahrain, Sakhir P.O. Box 32038, Bahrain
Ahmed Mansoor Alkhan: Department of Islamic Banking, University of Bahrain, Sakhir P.O. Box 32038, Bahrain

JRFM, 2022, vol. 15, issue 10, 1-22

Abstract: Shari’a governance is considered a crucial element of the Islamic banking industry. As recent as 2017, Islamic banks in the Kingdom of Bahrain were required by the regulator to have only a Shari’a Supervisory Board and an internal Shari’a function. In 2017, the Central Bank of Bahrain issued a new Shari’a Governance module (SG) in its rulebook, requiring all Islamic banks to have at least two internal Shari’a departments instead of one, mandated external Shari’a auditing, and maintaining the necessity of having a Shari’a Supervisory Board. In this study, through an empirical enquiry, we analyse how the Islamic banking industry implemented this new module. The empirical results revealed that there seems to be an implementation gap between Islamic retail and wholesale banks, where the former have fully implemented the new Shari’a governance requirements, while the latter were given exemptions to postpone its implementation.

Keywords: Shari’a governance; Shari’a audit; regulation; Islamic finance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/15/10/418/pdf (application/pdf)
https://www.mdpi.com/1911-8074/15/10/418/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:15:y:2022:i:10:p:418-:d:920083

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().