---
title: "What is Shariah non-compliance event? | IslamicOpenFinance™"
description: "An actual failure to meet Shariah requirements, which must be confirmed, rectified and, where required, reported to the regulator."
url: https://islamicopenfinance.com/glossary/shariah-non-compliance-event/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Shariah governance](https://islamicopenfinance.com/glossary/#governance)

Shariah governance

# Shariah non-compliance event

An actual failure to meet Shariah requirements, which must be confirmed, rectified and, where required, reported to the regulator.

A Shariah non-compliance event is an occurrence in which an institution's operations, business or activities fail to meet Shariah requirements, as distinct from the risk that such a failure might happen. Bank Negara Malaysia's Shariah governance policy document gives the Shariah committee the role of deliberating on and affirming non-compliance findings and endorsing rectification measures, and requires rectification plans submitted to the Bank to carry the committee's deliberations and rationale. In practice, each event needs a record of what happened, how it was found, its financial effect and how it was rectified.

## Sources

- [Bank Negara Malaysia, Policy Document on Shariah Governance, 2019: Shariah committee role on non-compliance findings and rectification](https://www.bnm.gov.my/documents/20124/761679/Shariah+Governance+Policy+Document+2019.pdf)

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

[**Shariah non-compliance risk** The operational risk that an institution fails to comply with Shariah rules and principles in its products and services.](https://islamicopenfinance.com/glossary/shariah-non-compliance-risk/) [**Purification of income** Giving away, usually to charity, income from a non-compliant source or a Shariah breach, so the institution does not benefit.](https://islamicopenfinance.com/glossary/purification/) [**Shariah review** A regular compliance function that assesses whether an institution's operations follow Shariah requirements.](https://islamicopenfinance.com/glossary/shariah-review/) [**Shariah audit** An independent assessment of internal controls, risk management and overall Shariah compliance, usually by internal audit.](https://islamicopenfinance.com/glossary/shariah-audit/) [**Shariah resolution (board decision)** A recorded decision of a Shariah board or committee on a product, transaction or issue, with its reasoning and any dissent.](https://islamicopenfinance.com/glossary/shariah-resolution/)

**Shariah governance**

1. [Shariah supervisory board](https://islamicopenfinance.com/glossary/shariah-board/)
2. [Fatwa](https://islamicopenfinance.com/glossary/fatwa/)
3. [Shariah governance system](https://islamicopenfinance.com/glossary/shariah-governance-system/)
4. [Shariah review](https://islamicopenfinance.com/glossary/shariah-review/)
5. [Shariah audit](https://islamicopenfinance.com/glossary/shariah-audit/)
6. [Shariah non-compliance risk](https://islamicopenfinance.com/glossary/shariah-non-compliance-risk/)
7. [Purification of income](https://islamicopenfinance.com/glossary/purification/)
8. [Central Shariah board](https://islamicopenfinance.com/glossary/central-shariah-board/)

[All 221 terms](https://islamicopenfinance.com/glossary/)