EXERCISE 8

TOPIC 6: SHARIAH SUPERVISORY BOARD

Critically assess the above scenario on whether the investment banker's approach is proper
in getting the Shariah compliance approval of the product(s). In your answer, also discuss
the roles and responsibilities of the Islamic Financial Institutions (IFIs) towards their Shariah
board.

The above scenario of the investment banker's approach is improper in getting the products'
Shariah compliance approval. This is because it is against the elements of Shariah. It has
elements of gharar (not clear), does not fulfill the conditions and pillars of contracts or aqad,
and so on in addition to fulfilling the purpose and objectives of Maqasid Shariah.

The roles and responsibilities of Islamic Financial Institutions (IFIs) towards their Shariah
board are:

1. To refer all Shariah issues to the Shariah committee

2. To adopt the Shariah committee’s advice
3. To ensure the product documents are validated
4. To have Shariah compliance manual
5. To provide access to relevant documents
6. To provide sufficient resources
7. To remunerate the Shariah committee accordingly