Shariah Governance and Compliance
What the exam tests
This domain tests the Shariah Supervisory Board, fatwa and product approval, Shariah audit, compliance controls, independence, and reporting. Expect questions on who approves, who monitors, and what happens after approval.
Core rules
- The Shariah Supervisory Board issues fatwas and approves products, contracts, and policies.
- Approval requires qualified scholars with fit-and-proper standing and independence.
- Product approval follows concept review, structure review, legal documentation, SSB resolution, implementation, and audit.
- Shariah audit checks whether actual operations match approved structures.
- Shariah non-compliance must be identified, remediated, and reported.
- AAOIFI governance standards and IFSB guidance are common reference points.
Worked example
A bank proposes a late payment fee of 5% on overdue murabahah instalments. The SSB may approve the charge only as a deterrent, with the amount going to charity, not to bank income. The compliance team must configure the system to route the fee to a charity account, and Shariah audit must verify that no fee was booked as profit.
Traps
Do not say SSB approval replaces regulatory approval. Do not let management overrule an SSB fatwa without a proper process. Do not confuse Shariah audit with financial audit. Do not ignore post-implementation monitoring.