Shariah review
A regular compliance function that assesses whether an institution's operations follow Shariah requirements.
Shariah review is a function that conducts regular assessment of whether an institution's operations, business, affairs and activities comply with Shariah requirements, in the words of Bank Negara Malaysia's Shariah governance policy. It identifies and monitors compliance, reports non-compliance to the board, the Shariah committee and senior management, and keeps staff informed of relevant rulings. It sits within the compliance function, while Shariah audit provides independent assurance.
Sources
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 auditAn independent assessment of internal controls, risk management and overall Shariah compliance, usually by internal audit.Shariah compliance functionThe internal control function that checks, day to day, that operations follow Shariah board rulings.Shariah supervisory boardAn independent panel of Shariah scholars that approves an institution's products and oversees its Shariah compliance.Shariah non-compliance riskThe operational risk that an institution fails to comply with Shariah rules and principles in its products and services.