Shariah governance

IFSB (Islamic Financial Services Board)

The international standard setter that issues prudential standards and guiding principles for Islamic banking, capital markets and takaful.

The IFSB, the Islamic Financial Services Board, is an international standard-setting organisation that promotes the soundness and stability of the Islamic financial services industry by issuing prudential standards and guiding principles for banking, capital markets and takaful. Its standards follow a due process of working groups, exposure drafts, public consultation and review by its Shari'ah board and technical committee. Supervisors are its main audience, which is why its standards speak of what supervisors should require, unlike AAOIFI's contract-level Shari'ah standards.

Sources

IFSB-31 Guiding Principles for Effective Supervision of Shariah Governance, 2025: About the Islamic Financial Services Board

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

Related terms

AAOIFI (Islamic finance standard setter)The Bahrain-based not-for-profit body that issues Shari'ah, accounting, auditing, governance and ethics standards for Islamic finance.Capital adequacy (Islamic banks)Holding enough capital against risks; for Islamic banks, the IFSB adapts the Basel rules to each Shariah contract.Institutions offering Islamic financial services (IIFS)The IFSB's umbrella term for Islamic banks, takaful institutions, Islamic windows and other Islamic financial institutions.Shariah governance systemThe institutional arrangements through which an institution ensures independent oversight of its Shariah compliance.