Sharia governance of Islamic financial institutions: a comparative study among Malaysia, Bahrain and Sri Lanka

Abstract

Islamic finance industry has been widely developing not only in Muslim countries such as Malaysia and Bahrain but also in non- Muslim countries such as Sri Lanka. At the same time, the Shari’ah governance is one of major requirements for Islamic financial institutions to be recognised by the Shariah and the Muslim customers. As such, the Shari’ah governance plays a significant role in the industry to ensure that it meets the objective for the establishment of the Islamic financial institutions. Thus, the purpose of this paper is to investigate the level of Shari’ah governance of Islamic financial institutions in Sri Lanka, Malaysia and Bahrain. Hence, this is a comparative study among three countries. The research paper adopts a qualitative method and content analysis in order to accomplish the objective of the study. The data for the study is based on the primary and secondary sources that could be collected from Parliamentary Acts, books, articles, magazines, online materials and annual report of Islamic financial institutions available in the above three countries. The findings of the study are expected to be greatly useful for the Islamic financial institutions in Sri Lanka and similar countries where there is no proper legislation on Shariah governance.