Islamic Finance and Shariah Governance (BNM Shariah Governance Framework)
Bank Negara Malaysia's Shariah Governance Framework sets out a dual structure that every Islamic bank, takaful operator and Islamic fund manager has to run at once: the ordinary regulatory and prudential obligations that apply to any licensed financial institution, and a parallel Shariah compliance structure with its own committee, its own review and audit function, and its own escalation path when something goes wrong. Running both well, and being able to show a regulator the evidence of it, is the actual compliance task behind the framework.
This two-day programme is written for the people who sit inside that structure day to day, not for Shariah scholars. It works through how a Shariah Committee is composed and kept independent, how a product actually gets Shariah approval before it reaches a customer, and what happens procedurally and financially when a transaction turns out to be Shariah non-compliant. Orbix is an independent training provider and does not act for, or on behalf of, Bank Negara Malaysia.
HRD Corp SBL-Khas Claimable
Programme Agenda
Day 1, 9:00 AM - 9:15 AM
Welcome and Programme Overview
Introduction to the session, objectives, and housekeeping.
Day 1, 9:15 AM - 10:15 AM
The Shariah Governance Framework and the Dual Structure It Creates
Why an Islamic financial institution reports into two compliance structures rather than one, how the Shariah Governance Framework sits alongside the institution's ordinary governance obligations under its licensing legislation, and the board's ultimate accountability for Shariah compliance even though it delegates the technical review to the Shariah Committee.
Day 1, 10:15 AM - 10:30 AM
Break
Day 1, 10:30 AM - 12:30 PM
The Shariah Committee: Composition, Independence and Fit and Proper
Shariah Committee composition and qualification expectations, the fit and proper assessment applied to members, independence from management and from the business lines the Committee oversees, and how the Committee's decisions are recorded and made binding on the institution.
Day 1, 12:30 PM - 1:30 PM
Lunch
Day 1, 1:30 PM - 3:15 PM
The Shariah Governance Structure Beneath the Committee
The Shariah risk management function, the Shariah review function and the Shariah audit function, how each differs in purpose and reporting line, and how the three work together to give the Committee and the board the assurance they need between formal sittings.
Day 1, 3:15 PM - 3:30 PM
Break
Day 1, 3:30 PM - 4:45 PM
Product Development and the Shariah Approval Process
How a new product or a material change to an existing product moves from business proposal to Shariah endorsement, what the Shariah Committee actually tests a proposal against, and the documentation trail that has to exist before, during and after approval so the decision can be defended later.
Day 1, 4:45 PM - 5:00 PM
Day 1 Close
Recap and what to review before day two.
Day 2, 9:00 AM - 9:15 AM
Day 1 Review
Recap of day one and the questions it left open.
Day 2, 9:15 AM - 10:15 AM
Shariah Non-Compliance: Identification, Rectification and Disposal of Tainted Income
How a Shariah non-compliance event is identified and classified, the rectification steps expected once one is found, and the obligation to identify and channel any income arising from a non-compliant transaction away from the institution's own earnings, typically to charitable purposes, rather than retaining it.
Day 2, 10:15 AM - 10:30 AM
Break
Day 2, 10:30 AM - 12:30 PM
Documentation and Regulatory Expectations
What a Shariah Committee's minutes, the Shariah review reports and the Shariah audit working papers need to contain to withstand supervisory scrutiny, and the common documentation gaps that turn a procedural lapse into a harder finding.
Day 2, 12:30 PM - 1:30 PM
Lunch
Day 2, 1:30 PM - 3:15 PM
Applied Workshop: Walking a Product Through the Framework
Participants take a sample product proposal and walk it through composition sign-off, Shariah review points and a documentation checklist, finishing with a gap list against their own institution's current process.
Day 2, 3:15 PM - 3:30 PM
Break
Day 2, 4:45 PM - 5:00 PM
Wrap-Up and Q&A
Key takeaways, next steps, and close.
Key Outcomes
- Explain the dual governance structure the Shariah Governance Framework creates and where board accountability sits within it
- Describe Shariah Committee composition, independence and fit and proper expectations
- Distinguish the Shariah risk management, review and audit functions and how they work together
- Walk a product through the Shariah approval process with the right documentation at each step
- Identify a Shariah non-compliance event, apply rectification steps and handle tainted income correctly
- Assess the organisation's own Shariah governance documentation against what a reviewer expects to see
Training Mode Physical / Online / Hybrid / e-learning
HRD Corp SBL-Khas Claimable
Level Intermediate to advanced. For compliance, Shariah secretariat, risk and product teams at Islamic banks, takaful operators and Islamic fund managers, and for conventional institutions running an Islamic window. General familiarity with Islamic finance concepts is helpful but not required.
Duration 2 Days (16 Hours) | 9:00 AM to 5:00 PM daily
Venue In-house at the client's premises, or delivered via the client's preferred platform (Microsoft Teams, Zoom, or equivalent)
Assessment A product walkthrough workshop producing a documentation gap list, plus a written knowledge check
Certificate Certificate of Completion issued to all participants upon full attendance