Revisiting the paradigm of Sharīʿah governance of Islamic financial institutions

What is it about?

The paper discusses the need for and the relevance of a governance framework for the Islamic finance institutions in addition to the corporate governance of banking and financial institutions. The objective is to find out the possible gaps in the Sharīʿah governance in line with the latent needs of Islamic finance and the global developments regarding social and value based financial intermediation. It would require financial inclusion leading to social inclusion to keep the human societies cohesive and healthy. The emerging paradigm must encompass value oriented financial ecosystem based on the divine injunctions on equity and balance, and nature’s requirements. It would need a comprehensive set of discipline, accountability, and governance for making the pursuit of sustainable development goals and corporate social responsibilities effective in a well-defined schedule prepared and implemented by the regulators. It recommends that the regulators of Islamic finance may adopt the emerging paradigm and ecosystem comprising sustainability and value-based governance, awareness, and corporate social responsibility.

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