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Al-Siyāsah al-Shar‘iyyah’s consideration and its approach among the

governors in Islamic financial institutions: a Malaysian’s experience

Article in Journal of Islamic Marketing · May 2024

DOI: 10.1108/JIMA-05-2023-0155

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sah al-Shar‘iyyah’s
Al-Siya Al-Siyasah
al-Shar‘iyyah’s
consideration and its approach consideration

among the governors in Islamic

financial institutions: a
Malaysian’s experience Received 31 May 2023
Revised 23 February 2024
Accepted 12 March 2024
Ahmad Akram Mahmad Robbi
AbdulHamid AbuSulayman Kulliyyah of Islamic Revealed Knowledge and
Human Sciences, International Islamic University Malaysia,
Kuala Lumpur, Malaysia
Muhammad Shahrul Ifwat Ishak
Faculty of Business Management, Universiti Sultan Zainal Abidin,
Kuala Terengganu, Malaysia, and
Fathullah Asni
Department of Syariah, Kolej Universiti Islam Perlis, Perlis, Malaysia and
School of Humanity, Universiti Sains Malaysia, Pulau Pinang, Malaysia

Abstract
Purpose – Islamic financial institutions (IFIs) in Malaysia continue to promote Shari‘ah-compliant business and
transactions. As a result, the governors have a lot to think about before issuing any fatwa or ordinance, which
impacts the majority of Malaysians. Nevertheless, the point of views from the governors have not been highlighted
much. This research seeks to investigate the extent to which the conception of al-Siyasah al-Shar‘iyyah is embraced
by Shari‘ah committees’ leadership roles within IFIs. The importance of al-Siyasah al-Shar‘iyyah in decision-making
makes abandoning the Shari‘ah principle untenable and its significant role for IFIs in Malaysia cannot be
overstated. It serves as a crucial tool for decision-making by authorities and governors.
Design/methodology/approach – The objectives of this research are attained by examining diverse
sources obtained through library research, encompassing books, journals, newspapers, websites and reports.
In addition, to use an analytical method to assess the role of al-Siyasah al-Shar‘iyyah in IFIs pratical, the
authors collect information through interviews with five participants actively engaged in Shari‘ah committees
within financial institutions, both directly and indirectly.
Findings – The research paper concludes that al-Siyasah al-Shar‘iyyah holds significance for Shari‘ah
committees in IFIs when providing legal opinions. In situations where existing madhhab-based laws prove
insufficient for addressing a particular issue, the Shari‘ah committees will autonomously engage in new
ijtihad to ensure effective resolution of the matter.
Research limitations/implications – The implication that could have been resulted from this study is
to indicate how Shari‘ah committees in IFIs structuring a set of rules and regulations embedded by al-Siyasah
al-Shar‘iyyah elements to produce mas* lah* ah* for the ummah. This perspective is barely discussed in depth as
Malaysia has unanimous scholars who work in this area. Thus, the authors attempt to bring the discussion
academically and express the point of view from governors’ perspective.
Originality/value – In the Malaysian context, where Islamic banks and financial institutions are
overseen by Shari‘ah committee members and the Central Bank of Malaysia, this study delves into the Journal of Islamic Marketing
practical experiences of governors in carrying out the responsibilities of al-Siyasah al-Shar‘iyyah within © Emerald Publishing Limited
1759-0833
the decision-making process. The objective is to investigate the perspectives of Shari‘ah committees DOI 10.1108/JIMA-05-2023-0155
JIMA when they encounter scenarios where prevailing madhhab opinions prove inadequate in addressing
contemporary issues within the country.
Keywords Islamic financial system, al-Siyasah al-Shar‘iyyah, Malaysia, Decision, Governors
Paper type Research paper

Introduction
The Islamic financial sector around the world has grown steadily and among those
contributing toward the progress is the Islamic financial industry in Malaysia. This is
because the Islamic finance sector in Malaysia is driven and fully supported by the
government and the majority of Muslims (Iqbal and Molyneux, 2016).
Nevertheless, it should be noted that modern banking practices are complex. Moreover, it has
been claimed that the modern financial environment is not conducive to the progress of Islamic
banking, as it faces various challenges, risks and restrictions (Nathie, 2010). Even though the
Islamic finance industry has been recognized as being among the promising sectors in the world,
there were several unsuccessful subliminal stories, including the failure of some institutions
because of political factors and economic pressure, whereas others have experienced substantial
losses. At the same time, Islamic finance products are not free from controversy due to high
prices and claims that they are nearly identical to conventional products.
Various efforts have been made to strengthen the Islamic finance sector, among them
enhancing the legislation to regulate the Islamic financial business sector in Malaysia, where
the latest approved law is the Islamic Financial Services Act, 2013 (Act 759) (IFSA) to
replace the Islamic Bank Law, 1983 (Act 276) and the Takaful Act, 1984 (Act 312). Such
enhancements promote financial stability and Sharīʿah compliance (Hussain et al., 2013).
Furthermore, the promotion of financial stability, along with the implementation and
enforcement of regulations, illustrates the influence of good governance in overseeing the
operations of Islamic Financial Institutions (IFIs). This underscores the role of governance
consistency in IFIs, thereby enhancing the principles of al-Siyasah al-Shar‘iyyah.
However, there are certain constraints in assessing the dedication of IFIs in Malaysia to
uphold the principles of al-Siyasah al-Shar‘iyyah, especially from the viewpoint of
governors. It is acknowledged that Sharī‘ah emphasizes good governance in operations and
management, aiming to prevent harm to individuals and promote their well-being.
Therefore, this research emphasizes the perspectives of those who have been involved in
and served IFIs as governors, whether as members of advisory councils or Sharī‘ah
committees. The main aim is to evaluate and analyze their contributions to the
comprehensive advancement of the concept of al-Siyasah al-Shar‘iyyah.

Literature review
Conceptual framework of al-Siyasah al-Shar‘iah
The word “al-Siyasah al-Shar’iyyah” is a compound word in which comprising the word Siyasah
and Shar’iyyah. The root of Siyasah is derived from the Arabic lexicon “Sasa,” “Yasusu” and
“Siyasatan”. According to al-Farabī, the word “Siyasah” generally means taking care of human
affairs (Mohammed and Kachkar, 2016), or doing something right, to train or ride animals as well
as managing something in a befitting manner (Ibn Manzūr,1994). It can be said here, the nuance
of Siyasah could be concluded as the art of government. The origin of Siyasah word could be
found in the Sunnah evidence where Al-Bukhari (2009) narrated from the Prophet Muhammad
(pbuh) as he said, “The children of Israel were administered by the prophets.”
Meanwhile, the literal meaning of “Shar‘iyyah” is the adjective form of the word
“Sharī‘ah,” which means “a way” or “a place that is passed by water like a river.”
Technically, Sharī‘ah is defined as everything that God has commanded for his servants in Al-Siyasah
religion including prayer, fasting, the obligatory giving (zakat) and pilgrimage. al-Shar‘iyyah’s
Nonetheless, the definition of al-Siyasah al-Shar’iyyah is hard to find in the classical discourse.
The way our Muslim traditional scholars raised the discussion regarding al-Siyasah al-
consideration
Shar’iyyah was slightly different than we find in this day. Al-‘Alwani (1990) denoted that there
are no specialized studies in our classical legacy that could be described today as political
thought, or as treatises on political systems, international relations, systems of government, the
history of diplomacy, political development, methods of political analysis, political theory,
political planning or any of the other categories currently studied as a part of contemporary
knowledge. According to him, many of the issues discussed on these subjects were treated in the
classical legacy through the medium of fiqh (the laws of Islam).
The field of al-Siyasah al-Shar‘iyyah was commonly related to these Hanbali jurists, Ibn
Taymiah and his assimilator, Ibn al-Qayyim al-Jauziyyah. Ibn Taymiyyah’s concept of al-
Siyasah al-Shar‘iyyah is mainly derived from two verses of Surah al-Nisa: 58 and 59.
According to Ibn Taymiyyah (2024), both verses indicate the requirement of executing
justice for the governors the rulers in which they are required to institute justice and
performing duties of the subject (the ruled). As long as the He maintains that it is duty of the
subjects to obey their ruler, the ruler is acting according to Allah’s commandments and not
enacting anything against Shariah rulings (Ibn Taymiyyah, 2024).
The classical interpretations appear to link al-Siyasah al-Shar‘iyyah with political affairs. This
notion is likely perceived as an Islamic political approach that seeks the well-being of the general
populace, is undertaken with the consent of the people and is implemented for the progress of the
state and the prosperity of its citizens (Khan, 2000). Al-Mawardi (2024), in his work Al-Ah* kam Al-
Sult* aniyyah, defines al-Siyasah Shar‘iyyah as the laws of Islamic jurisprudence concerning
politics, power and the policies adopted by the government. According to al-Ghazalī, the objective
of good governance is to enhance the lives of people by providing guidance on the right path in
both this world and hereafter. In alignment with al-Ghazali’s viewpoint, Al-‘Utaybi (2014)
underscored several principles of al-Siyasah al-Shar’iyyah, emphasizing that it must adhere to the
revelations. Referring to Surah al-Nisa’: 58 and 59, Rashid Rida argues that both verses form the
foundation for every Shariah stipulation directed to every Muslim. In addition, based on Surah al-
H* adīd: 25, Al-‘Utaybi (2014) highlighted that the concept of al-Siyasah al-Shar’iyyah should be
grounded in specified rulings, tranquility, calmness and development.
Building upon the traditional concept, contemporary scholars have delved into the realm
of al-Siyasah al-Shar‘iyyah, where its essence remains connected to the pursuit of good
governance, the promotion of benefits for society and the prevention of harm. This is why
Kamali (1989) emphasized the significance of al-Siyasah al-Shar‘iyyah, particularly in
relation to governors and rulers. According to Kamali, al-Siyasah al-Shar‘iyyah constitutes a
comprehensive doctrine within Islamic law that grants authority to rulers in determining the
administration of Sharī‘ah. The ruler is thus permitted to take discretionary measures,
formulate rules and implement policies that he deems conducive to good governance, as long
as they do not violate any substantive principles of the Sharī‘ah (Kamali, 1989).
However, some Muslim scholars limited the concept of al-Siyasah al-Shar‘iyyah to specific
niches. The notion is likely to be considered as an Islamic political approach in which is sought
for the general welfare of the people, held with the permission of the people and performed for the
development of the state and the prosperity of the people concerned (Khan, 2000).
Limiting al-Siyasah al-Shar‘iyyah to political concerns does not fulfill Sharī‘ah’s aim.
Implementing al-Siyasah al-Shar‘iyyah is based on global Sharī‘ah principles such as taysir
wa suhulah, eliminating hardship, avoiding risk, justice, human equality, consultation,
referring to expertise, avoiding evil ways and adhering to customs (Al-‘Utaybi, 2014).
JIMA Al-Siyasah al-Shar‘iyyah aligns with the spirit and aims of Sharī‘ah, even if it means going
against its letter (Kamali, 1989).
Based on the juristic perspective, fuqaha refers to the execution of al-Siyasah
al-Shar‘iyyah by rulers or governors on subjects without a clear verdict in current
specifications. According to Ibn al-Qayyim al-Jauziyyah (2024), in al-T* uruq al-H* ukmiyyah,
al-Siyasah al-Shar‘iyyah refers to any measure that benefits people and protects them from
harms, even if it is not explicitly mentioned in the revelation.
In conclusion, what ‘Utuwwah mentioned in his book is imminent to the actual concept of
al-Siyasah al-Shar‘iyyah of producing goods and evading evils. According to Utuwwah
(1993), the science of al-Siyasah al-Shar‘iyyah has been usable for searching legal opinions
and regulation to manage people’s affairs to achieve public interest in which accordance
with Sharī‘ah and its principles. In a similar page, Kamali (1989) stated al-Siyasah
al-Shar‘iyyah as an instrument, in the hands of the ‘ulu al amr, with which to discharge this
duty. But more specifically, the Quranic command, addressed to the believers to obey God,
obey the Messenger and those who are in charge of authority from among you (al-Nisa’: 58)
provides the necessary authority for siyasah.
In Malaysia, the Central Bank of Malaysia is an agency in charge of regulating all
financial services enterprises. The Central Bank of Malaysia compels all corporate entities to
prepare financial reports, disclose income statements and obligate accountability among
IFIs. The Central Bank of Malaysia’s position exemplifies Kamali’s concept of al-Siyasah al-
Shar‘iyyah, which expands on traditional governance concepts while being inclusive.

Historical practice of al-Siyasah al-Shar‘iyyah

As al-Siyasah al-Shar‘iyyah is distinguished by its foundation with the elements of
fulfillment of Maqa*sid al-Sharī‘ah, many illustrations from the Sharī’ah evidence elucidate
how much al-Siyasah al-Shar‘iyyah affected the way Muslim jurists create their legal
theories opinion. Several practices indicated by the Prophet Muhammad (pbuh) are evident
for the basic idea of al-Siyasah al-Shar‘iyyah during his reign. For instance, Prophet
Muhammad (pbuh) did not kill the hypocrites in Madinah (Al-Bukhari, 2009). The reason for
the avoidance was to ensure that the enemies of Islam did not speculate about the action of
the Prophet by killing his followers (al-Nawawī, 1972).
Another example of the execution of al-Siyasah al-Shar‘iyyah can be perceived through
the prohibition of Sharī‘ah from killing women, infants and natural sources during the
battlefield (Ibn Battal, 2003), as recorded by Al-Bukhari (2009) and Muslim (2009). This is
how Prophet Muhammad (pbuh) imbued humanity among people through his action of
evading evils (mafsadah). Avoiding conflicts even with the enemies is considered preferred
mas* lahah compared to perpetually having war with them, according to some opinions. S* alih
(2011) in his study expressed the importance of the general principle of al-Siyasah
al-Shar’iyyah, mentioning the significance of choosing preferred goods (mas* lahah rajih* ah)
when it has two or more options as well as avoiding preferred evils (mafsadah rajih* ah).
In the economy, the Prophetic authority as a head of state can be found in his injunctions,
where the idea al-Siyasah al-Shar‘iyyah becomes the basis, especially when he enjoins the
execution of good and prohibition of bad. During the recession, several companions advised
Prophet Muhammad (pbuh) to schedule pricing controls (tas‘īr). However, the Prophet
Muhammad (pbuh) refused the suggestion, saying:
Indeed Allah SWT is al-Musa‘ir, al-Qabid* , al-Basit*, al-Razzaq, and I am hopeful that I meet my
Lord and none of you are seeking recompense from me for an injustice involving blood and wealth.
(Al-Tirmidhi, 2001).
Based on the narration, Muslim scholars are disputed in defining whether the practice of the Al-Siyasah
Prophet (pbuh) was absolute or open to some articulations. According to al-S* an‘anī (2012), al-Shar‘iyyah’s
some jurists interpret the hadith in a broad sense, leading Muslims to refrain from price
scheduling. According to Al-Qardāwī (2013) and al-Bayd* awi (2014), Abū Yūsuf interpreted
consideration


the hadith to include the Prophet Muhammad’s practice of refusing pricing regulation to
prevent injustice. During the Prophetic era, the economy followed a free market model based
on supply and demand under Shari‘ah parameters (Islamicfinanceguru.com). Based on this
argument, Abū Yūsuf agreed upon allowing scheduling price control if the ruler or governor
found it as the proper solution to unriddle the economic problems (Ibn Rushd, 2013).
From the economic policies introduced by the Prophet Muhammad, it is evident that the
concept of al-Siyasah al-Shar‘iyyah has been prioritized and was one of the primary
considerations during his time issuing any legal opinion. This can be seen in the way
Prophet Muhammad (pbuh) prohibited monopoly (ih* tikar), usury (riba), gambling (maysir)
and all types of oppressing economic activities (al-Zuh* ayĀi, 2012; al-Bugha et al., 2013).
The companions of the Prophet Muhammad (pbuh) are those who are excellent at dealing
with al-Siyasah al-Shar‘iyyah when it comes to settling particular issues. For instance, the
first caliph of the Islamic history, Abu Bakr, has declared confrontation against ahlu al-
riddah for their reluctance to pay zakat during his reign, considering the decease of the
Prophet stopped them from fulfilling the obligation (Al-S* allabī, 2015). From Abu Bakr’s side,
letting ahlu al-riddah express rebellion would cause defamation against Islam itself. So, he
took consideration to evade those evils.
‘Umar ibn al-Khattab, with his indigenous, has pointed out some opinions that were
deemed essential elements of al-Siyasah al-Shar‘iyyah. Many policies have been revised
during his reign as the second caliph of Islam after witnessing unanswerable legal issues
due to the change in circumstances and so on. For example, he stated that any husband who
pronounces *talaq (dissolution of marriage) three times in one statement will count as ba‘in
kubra (Al-Zuhaylī, 2012; H*anaf, 2012). ‘Umar was unease with the situation of manipulating
women as subjects of oppression. Even though the practice of the Prophet was clear, he did
not recognize talaq ba’in kubra in one statement, ‘Umar, however, views that the current
regulation could not provide the solution. Hence, using al-Siyasah al-Shar‘iyyah, he set a
new enforcement of ruling upon the situation.
In addition, ‘Uthman ibn ‘Affan himself established al-Siyasah al-Shar‘iyyah while
structuring a new form of legal opinion. In settling a dispute, among Arabs’ people who
differ in deciding the righteous dialect that suits al-Quran, ‘Uthman decided to form an
examination committee to compile the Qur’an manuscripts that are still in the hands of
companions and validate only one to be established as an official mushaf (Al-S* allabī, 2015;
Madkūr, 2014). Although the practice was never approached by the Prophet, for ‘Uthman,
his priority is to promote goods and benefits and evade the conflicts.
Based on the abovementioned statement, the concept of al-Siyasah al-Shar‘iyyah is an
essential element of Sharī‘ah law, which authorizes the authorities who are responsible for
making a policy or taking care of people’s affairs to determine the manner in which the
Shari‘ah should be governed. It basically deals with the relationship between an individual
and the state, citizen and the government, and society and the state (Handoko and Kayadibi,
2013).

Al-Siyasah al-Shar‘iyyah parameters

Not all legal opinions that need revision are considered using the al-Siyasah al-Shar‘iyyah
approach. Al-But*ī (2009) was the one who disagreed with this mentality, as he viewed some
scholars as having a tendency to prefer mas* lahah over legal texts that explicitly prescribed.
JIMA This argument was a response to al-T* ūfī, who was assumed to prefer maslahah over explicit
legal texts.
To prevent the misuse of al-Siyasah al-Shar‘iyyah, in the sense that Muslim scholars
have set parameters in dealing with al-Siyasah al-Shar‘iyyah approach. With this respect,
Mohamed and Al-Sefy (2021) enunciated the necessity to classify between general rulings
(ahkam ‘ammah) and specific rulings (ahkam khas* *sah), so that the governors would know
which rulings could be revised (taghayyur) and which could not (thabitah). Other than that, it
is important to understand the essence of Sharī‘ah texts by using them as references and
having knowledge of the rulings prescribed in them. In addition to this, Mohamed and
Al-Sefy (2021) stressed the importance of structuring ijtihad that align with the element of
mas* lah* ah* and prevention of mafsadah.
Using the same approach as al-Būt*ī did in his work, the governors should not abandon
the explicit legal text, preferring only mas* lah* ah* . In regard to practicing mas* lah* ah* , it should
not be contrary to Sharī‘ah texts, otherwise, it resulted in maslahah mulghah (rejected
mas* lah* ah* ). However, Muslim jurists do not evade the influence of the present situation,
which could affect a change in current law (Kamali, 2007). The practices of Prophet
Muhammad and *sah* abah are evidence indicates the dynamics and flexibility of Sharī‘ah.
For instance, Islam has prohibited sales without specifying items (bay‘ma‘dum); however, in
some practice, Prophet Muhammad allowed bay‘al-salam as well as al-istisna‘on conditions.
This perspective is due to the local practices of people in Madinah who accepted such trade.
Another parameter is that the embrace of al-Siyasah al-Shar‘iyyah should be flexible and
receptive to change. A change in current law has been happening since the era of the
Prophet Muhammad (pbuh). On top of that, some legal opinions of *sah* abah were different
from the practice during their time with the Prophet. In this regard, Mohamed and Al-Sefy
(2021) maintained that any change in of the al-Siyasah al-Shar‘iyyah approach does not
necessarily mean a change for Sharī‘ah law.

A brief history of Malaysia’s Islamic financial

The number of Islamic banks around the world is 396 in 53 countries, managing a total fund
of US$442bn. In addition, nonmainstream banks around the world that offer Islamic
banking windows are 320 banks managing a fund of US$200bn. The banking industry in
Malaysia has undergone accelerated liberalization resulting in a rapid expansion in
business, reflected in the immense increase in the portfolio of loans and operations (Hakati
et al., 2020).
The emergence of the IFI of Malaysia began in early 1962, when Tabung Haji was
formed to manage funds from Muslim society intended to perform Islamic pilgrimage.
However, the objective of Tabung Haji is not for commercial activity; rather, it was
appointed by the government of Malaysia to centralize Muslim society’s funds (Tabung
Haji, 2024).
The formation of IFI with its objective to facilitate Muslims’ activity in commercial
transactions, so that it will align with Sharī‘ah parameters was a suggestion of Kongres
Ekonomi Bumiputera in 1980. The Congress accepted the suggestion of forming an Islamic
bank. By its formation, the Islamic Bank will be a center for collecting funds and investing
them in a Sharī‘ah compliance platform (Asni, 2019).
According Tamkin (2001), it became a hope for every Muslim in this world to have their
own Islamic banking system in their country’s financial system which consequences to
ensure their financing with the bank would free from usury (riba). Following the rise of
Muslim voices across the world, including Qatar, the UAE and Egypt (Tamkin, 2001), the
Muslim community in Malaysia is not excluded from expressing their thoughts on Al-Siyasah
Malaysia’s first step to developing its own Islamic banking and financial system. al-Shar‘iyyah’s
On July 30, 1981, the government established the National Steering Committee led by
Tan Sri Raja Mohar Raja Badiozaman and Tabung Haji as secretaries (Haron, 2008; cited in
consideration
Zaim et al., 2015). As a preparation to provide a report, the secretariat referred to Faisal
Islamic Bank in Sudan and Faisal Islamic Bank in Egypt. The secretariat’s roles are to:
 study and identify various critical aspects of Islamic banking, such as the basis of
establishment, operation and business relationships with customers and other
financial institutions;
 examining the suitability of Islamic banking in the Malaysian context from various
perspectives, including religion, race, social and development; and
 presenting to the government a proposal for the establishment of Bank Islam
Malaysia in a complete report contains aspects, such as basic concepts of Islamic
banking,a legal framework, company structure, operational area and organizational
structure.

Report from the committee was presented to the government of Malaysia, suggesting
several proposals and this includes:
 an Islamic bank that conducts its operations in accordance with Sharī‘ah law must
be established;
 the Islamic Bank shall be incorporated as a company under the Companies Act of
1965;
 because the Bank Act, 1973 is not suitable for the operation of Islamic banks, a legal
provision known as the Islamic Bank Act 1983 should be proposed to license and
supervise Islamic banks, and some amendments should be made to the existing
relevant acts;
 Bank Negara Malaysia, which is the central bank, has to administer the Islamic
Bank Act 1983;
 prohibition of usury and the implementation of the profit and loss sharing system in
all economic activities involving money, wealth and labor’
 the concept of profit and loss sharing must replace the interest mechanism in
Islamic banking operations;
 Islamic Bank Management is based on Islamic transactions (fiqh mu‘ amalat) so that
his activities do not conflict with the principles of Sharī‘ah; and
 avoiding all activities that are against the interests of Muslims.

Following the government’s acceptance of the Steering Committee’s report regarding and for
the purpose of establishing Bank Islam in Malaysia, in March 1983, Parliament has passed
an act called the Islamic Bank Act 1983, which came into enforcement on April 7, 1983, to
enable Bank Islam to run its operation is based on Sharī‘ah. The Islamic Bank Act 1983 aims
to license and regulate operations Islamic banking business. It was enacted based on the
Bank Act, 1973 at that time, with necessary modifications and amendments, in line with the
principles and Islamic banking practices.
It is a matter of fact that the first Malaysian Islamic bank was installed in 1983 known as
Bank Islam Malaysia Berhad (BIMB). This remarkable achievement happened 10 years after
the foundation of Dubai Islamic Bank, the first world-recognized Islamic bank. Although it
JIMA seems that this country may be late in establishing Islamic banking in comparison to other
Muslim countries, Islamic finance industry has witnessed a dramatic growth (Mohd Zain
and Abdullah, 2019) (Table 1).
This first10-year progress can be summarized into four stages as the following:
This stage can be considered as initial attempt by the government to install Islamic finance in
this country. It seems that the government was carefully implementing Islamic finance, through
the study conducted as well as it only allowed one Islamic bank. As a result, Bank Islam
Malaysia Berhad (BIMB) enjoyed the 10 years of many exclusive rights granted to adapt into the
banking environment. In addition, Bank Islam Malaysia Berhad (BIMB) was protected from
competing with other conventional banks that were wealthier and more experienced (Mohd Zain
and Abdullah, 2019). A special act of Islamic Banking was enacted in the same year as well as
GIA was issued to provide liquidity for Bank Islam Malaysia Berhad (BIMB). To support Islamic
finance ecosystem in Malaysia, along with banking operation, Takaful Malaysia Berhad was
established in 1994 as the first takaful company in Malaysia (Nahar, 2015) (Table 2).
In this stage it seems that the government intended to create a competitive
environment for Islamic finance industry. After 10 years of Bank Islam Malaysia Berhad
(BIMB) era, the dual banking system was implemented by the government, allowing
Islamic and conventional banking to coexist concurrently in the country’s financial
system. For that purpose, Islamic window was first introduced whereby conventional
banking institutions could offer Islamic banking products using their existing
infrastructures, including staff and branches. However, all Islamic funds must be
separated from conventional activities (Abdullah Saif Al Nasser et al., 2013).
To support the liquidity, Islamic Interbank Money Market (IIMM) was established. This
market has been recognized as the first IIMM in the world (Shaharuddin, 2012). To promote

Year Event

1980  Bumiputera Economic Congress has proposed an idea to set up an Islamic bank in Malaysia.
 National Steering Committee undertook a study in recommending all aspects of Islamic
banking operations for the government.
1983  Bank Islam Malaysia Berhad (BIMB) was established.
Islamic Banking Act 1983 (IBA) was enacted.
 Sharī‘ah compatible investment certificates under the 1983 Government Investment Act
was issued.
1992  BIMB was listed in KLSE (Bursa Malaysia).
Table 1.
Stage 1: 1983–1993 Source: Authors’ own work

Year Event

1993  Interest-free banking scheme (IFBS) was introduced.

1995  Islamic interbank money market (IIMM) was established.
 The Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) was founded.
1997  Shariah Advisory Council (SAC) of the Central Bank of Malaysia was established.
1999  Bank Muamalat Malaysia Berhad was incorporated as the second full-fledged.
Table 2.
Stage 2: 1993–2003 Source: Authors’ own work
a strong collaboration within Islamic banking players, Association of Islamic Banking and Al-Siyasah
Financial Institutions Malaysia (AIBIM) was founded. This body represents the interest of al-Shar‘iyyah’s
all its members as well as to assist them in terms of the development of Islamic banking and
consideration
finance in this country (AIBIM, 2024).
Subsequently, to strengthen the Shariah compliant aspect within this industry, in 1997
Sharī‘ah Advisory Council (SAC) of BNM was established as the highest Shariah authority
in Islamic finance in Malaysia. Sharī‘ah Advisory Council has been given the authority for
the ascertainment of Sharī‘ah for the purposes of Islamic banking business, takaful
business, Islamic financial business, Islamic development financial business or any other
business that is based on Sharī‘ah principles. As the reference body and advisor to the
Central Bank of Malaysia or Bank Negara Malaysia (BNM) on Sharī‘ah matters, Sharī‘ah
Advisory Council is also responsible for validating all Islamic banking and takaful products
to ensure their compatibility with the Sharī‘ah principles. In addition, it advises the Central
Bank of Malaysia or Bank Negara Malaysia on any Sharī‘ah issue relating to its Islamic
financial business or transactions, as well as other related entities (BNM, 2024) (Table 3).
The third stage has witnessed a further enhancement of Islamic banking in Malaysia. In
2002, Islamic branches have replaced Islamic windows to strengthen the institutional
structure of Islamic banking institutions. Seven domestic banks have transformed their
current Islamic windows into Islamic branches (Mohd Zain and Abdullah, 2019). In addition,
foreign entities have been allowed to set up their Islamic banking operation. In 2005, Kuwait
Finance House has become the first Islamic foreign bank in Malaysia (Shuib et al., 2011).
Meanwhile, the government realized that talent development was crucial to sustaining
Islamic finance industry. Thus, INCEIF and ISRA were set up by BNM in 2005 and 2008,
respectively. INCEIF is the first and the only university in the world dedicated to Islamic
finance, whereas ISRA is globally recognized as a leading research center in the Islamic
finance industry (ISRA, 2023). In 2010, a Sharī‘ah governance framework was issued by
BNM to empower the aspects of Sharī‘ah within Islamic banking operations (Table 4).

2002  BNM issued licenses to both domestic and foreign conventional banking to establish and
operate their Islamic banking subsidiaries.
2005  Kuwait Finance House was the first Islamic foreign bank in Malaysia.
2005  INCEIF (International Centre for Education in Islamic Finance) was set up by BNM.
2008  ISRA (The International Sharī‘ah Research Academy for Islamic Finance) was founded.
2010  Financial Sector Blueprint 2011–2020 was launched.
Shariah governance framework was issued.
Table 3.
Source: Authors’ own work Stage 3: 2003–2013

Year Event

2013 IFSA was enacted.

2014 Islamic banking logo was introduced.
2017 Value-based intermediation (VBI) was launched.
2019 Sharī‘ah governance policy document was issued.
2020 Licensing framework for digital banks was issued.
Table 4.
Source: This table is created by authors Stage 4: 2013–2023
JIMA In 2013, it has been witnessed a remarkable history of Islamic finance in Malaysia with the
enactment of Islamic Financial Services Act, 2013 (IFSA, 2013). Based on this enactment,
Islamic finance industry in Malaysia has been strengthened in several aspects including
Sharī‘ah governance framework; Sharī‘ah standards for every contract used in financial
transactions and the effectiveness of Islamic finance as financial intermediation. With IFSA,
2013, Malaysia is widely recognized as the leading country in Islamic finance particularly in
terms of regulatory framework (Ishak, 2019). To increase the visibility of Islamic banking
practices and finance, BNM has required all Islamic banking players to display a special
logo for their products (Ishak and Asni, 2020).
In 2017, another new achievement has been reached in Islamic finance industry when
value-based intermediation (VBI) policy has been launched by BNM. This policy is believed
to empower the roles and impact of Islamic banking industry in Malaysia in terms of
delivering the intended outcomes of Sharī‘ah. Through this policy, practices, conduct and
offerings by Islamic banking could contribute positive and sustainable impact toward the
economy, community and environment, consistent with the shareholders’ sustainable
returns and long-term interests. Four underpinning thrusts are promoted including
entrepreneurial mindset, community or consumer empowerment, good self-governance,and
best conduct as all of these need to be embedded in the business strategies (BNM, 2018).

Research methodology
This study included semi-structured interviews and the library technique of data collection
as part of its qualitative research methodology. Grounded theory, ethnography, case study,
narrative and phenomenology are the five primary designs of qualitative research. This
study focuses on one of the research designs, which is grounded theory. Grounded theory is
one of the methods of qualitative approach, which investigates the experience of people and
their responses and reactions to generate a theory or an illustration of the process and how it
works. The reasons for the name of the grounded theory are that it is usually generated only
from the data that is collected in the study and does not come from other sources, such as
other theories, textbooks or researchers’ opinions (Elkatawneh, 2016).
According to Strauss and Corbin, a grounded theory is one that is inductively derived
from the study of the phenomenon it represents. That is, it was discovered, developed and
provisionally verified through systematic data collection and analysis pertaining to that
phenomenon. In light of this, theory, analysis, and data gathering are mutually dependent.
According to Husin (2014), the features of this study design are that it is derived from
specific problems or phenomena, the theory must be arranged in the form of inductive data
gathering and it must accomplish its objectives: fit, understanding, generality and control.

Data collection
Conducting library research is necessary to complete the theoretical framework section. To
do this, the research drew on a variety of primary materials, including classical texts and
modern sources that came from the discourse of Muslim scholars as expressed in books,
articles and periodicals. In addition to this, semi-structured interviews with people who have
worked for IFIs for more than 10 years were used for the interview process. The studyused
the sample because it seeks to focus on the practical and minimize the sample size.
Based on their areas of expertise in relation to the subjects included in the study, the
respondents were chosen. Furthermore, the responses were chosen based on their background in
the relevant subject. Table 5 displays the primary participant types for the interview sessions. To
arrive at a conclusion from the data gathering, library data were analyzed using the content
analysis method, and the field data were analyzed via a thematic analysis approach. Content
analysis is described as a method that falls in the interface of observation and document analysis Al-Siyasah
(Prasad, 2008). It is any technique for making inference by systematically and objectively al-Shar‘iyyah’s
identifying specified characteristics of messages. Thematic analysis approach is a method for
identifying, analyzing and interpreting patterns of meaning “theme” within qualitative data. Using
consideration
thematic analysis is important in this qualitative study as it provides accessible and systematic
procedures for generating theme where it provides a framework for organizing and reporting the
researcher’s analytic observation (Clarke and Braun, 2015). The approach borrows what some other
researchers feel are the more useful techniques from each theoretical and methodological camp and
adapts them to an applied research context (Guest et al., 2024). Other than that, this approach is
suitable for this research as it provides flexibility for the researcher to communicate with the
selected respondents. There were several procedures have guided the semi-structed interviews.

Result and finding

Holistic overview on the implementation of al-Siyasah al-Shar‘iyyah in Islamic financial
institutions
Based on the interview with IR1, IR2 and IR3, it concludes that Malaysia is heading to apply
good Sharī‘ah practices comprehensively that requires commitment from all IFIs. The
progressive advancement can be seen through the establishment of Sharī‘ah Governance Policy
Document 2019 (SGPD 2019), which aims to support robust and orderly development of the
Islamic finance industry in Malaysia as well as to strengthen expectation for effective Sharī‘ah
governance arrangement that are well integrated with business and risk strategies of the IFIs.
That is why, by taking al-Siyasah al-Shar‘iyyah as the core value of the framework, the
governor revised the previous framework (SGF 2010). To ensure that the financial system
complies with Sharī‘ah standards based on Maqasid al-Shari‘ah and to safeguard the public
interest of industry participants, stakeholders and consumers, several laws have been
strengthened in the revision. Therefore, no infraction will be brought to our attention.
Risk management serves as a means of systematically identifying, measuring and
monitoring the risks of Sharī‘ah non-compliance in the operations, business and activities
carried out by IFIs. It is one of the indicators used to execute the principles of al-Siyasah
al-Shar‘iyyah. This enables IFIs to do business in accordance with the precepts of Sharī‘ah.
In addition, the Central Bank of Malaysia also plays a crucial role to regulate IFIs’ activities
to comply Shari‘ah, it offers a suitable framework for all industry participants and
consumers to refer to through the introduction of resolutions, guidelines and standards
including processes for conducting business in accordance with Sharī‘ah principles.

The responsibilities of Sharī‘ah committee to instill al-Siyasah al-Shar‘iyyah

According to IR1, the advisory councils and the Sharī‘ah committees who are serving in IFIs
are the responsible for ensuring the element of al-Siyasah al-Shar‘iyyah could be applied in

Interviewee Designation Institution

IR1 Former Sharī‘ah Advisory Council Central Bank of Malaysia

IR2 Sharī‘ah Committee Bank Muamalat
IR3 Sharī‘ah Committee Bank Simpanan Nasional
IR4 Sharī‘ah Committee Prudential BSN Takaful
IR5 Sharī‘ah Committee Great Eastern Takaful Table 5.
List of sample from
Source: Authors’ own work the respondents
JIMA IFIs. He stated that it is theirs to ensure the operation exercised in IFI’s complies with
Sharī‘ah principles, such as avoiding them from harm’s activities, uncertainty, gambling,
usury and from non-Sharī‘ah compliance investments.
Knowing that the task is challenging, especially after the emergence of technologies in
the digital era, resulting in issues that require new approaches to deal with, IR1 urges the
need to consider scholars who are identical and competent to sit on the committee chairs. In
this regard, the selection of the committees is getting tougher, and more strict requirements
are being applied compared with previous practices. As such, the Sharī‘ah committee
members who have been appointed based on their competency and scholarly
acknowledgment have responsibilities to provide objective and sound advice to the IFIs to
ensure that their aims and operations, business, affairs and activities comply with Sharī‘ah
standards.

Al-Siyasah al-Shar‘iyyah tied Islamic financial institutions with strict requirements

It was agreed upon by IR1 and IR3 that the governors became extra cautious while adopting
the notion of al-Siyasah al-Shar‘iyyah because they were worried about the consequences of
disregarding Sharī’ah principles when making decisions. Their primary goal, other from
making the contracts and goods offered by IFIs more palatable, is to adhere to Sharī‘ah. In
this regard, to avoid such things occur, the Central Bank of Malaysia imposed penalties for
institutions that are found guilty for misconduct in their business operation. This is to
guarantee their operations would not violate the Sharī‘ah principles by discriminating
against consumers’ rights or engaging in other bad behavior.
IFIs are required to abide by the guidelines set out by Bank Negara Malaysia under
Section 29 of the IFSA, 2013. Should IFIs neglect to comply, they risk being imprisoned for
up to eight years, fined up to RM25m or both. In addition to this, Section 15 of IFSA, 2013
provides for the offence of an authorized person carrying on unauthorized business. This
carries imprisonment for a term not exceeding eight years or to a fine not exceeding RM25m
or to both upon conviction. Meanwhile, Section 259 of IFSA, 2013 provides for the offence in
relation to false entries in documents such as books, records, reports, slips and statements.
This carries a penalty of imprisonment for a term not exceeding eight years or to a fine not
exceeding RM25m or to both (Yusoff and Hassan, 2022).

Al-Siyasah al-Shar‘iyyah as key factor of the development for Islamic financial institution
and its impact for other sectors
Regarding IR1 and IR3, they said that there is no denying the role of al-Siyasah
al-Shar‘iyyah in the growth of IFIs in Malaysia. Through the implementation of mandatory
Sharī’ah reviews, risk assessments, secretariats and audits in all licensed IFIs, these
institutions have achieved remarkable worldwide performance, positioning Malaysia at the
top of the global Islamic financial rankings.
Regarding IR3, it is intriguing to observe how the use of al-Siyasah al-Shar‘iyyah in IFIs
has affected other regulatory bodies, inspiring them to incorporate a similar aspect into their
own operations. This covers the microfinance sector, hotels, tourism, and the State Islamic
Religious Council (SIRC). Since SIRCs impose the necessity of auditing the organization, the
influence of adopting al-Siyasah al-Shar‘iyyah in various sectors may be interpreted as how
they handle zakat or waqf monies to be more responsible and literate. For example, the
Selangor Islamic Religious Council (MAIS) has developed and made public its annual report,
which provides donors and stakeholders with access to information about MAIS’s financial
literacy, activities and performances.
Challenging aspects to implement al-Siyasah al-Shar‘iyyah during decision-making process Al-Siyasah
in Islamic financial institutions al-Shar‘iyyah’s
Every respondent acknowledged that although Malaysia is a front-runner in the IFI sector consideration
and has demonstrated exceptional performance in this area, it is impossible to deny the fact
that decision-makers in this sector face a number of obstacles. The respondents claim that
disagreements over perspectives among the industry participants themselves are one of the
things creating these problems. Certain industry participants share their thoughts on a
given topic, whereas others have different opinions. Usually, this event takes place between
industrial participants. For instance, the Board of Directors has always placed a higher
priority on the results of items that have the potential to be profitable. For individuals
participating in the Sharī‘ah division, adherence to Sharī‘ah norms will always be the first
concern.
The societal conjecture and perception present additional barrier, according to IR3. Not
every individual agrees with how an IFI conducts business. Furthermore, there is
occasionally conjecture generated by certain individuals who hold differing views about the
notion of IFIs. They have been indoctrinated with the lie that the Islamic financial system is
bad. Because of this, Muslim depositors choose the products offered by IFIs over
conventional ones, unaware of the potential risks involved.
It may be difficult to apply al-Siyasah al-Shar‘iyyah during the decision-making process
in IFIs because of a lack of expertise as well as societal perception and conjecture. Too many
scholarly arguments have been sparked by the disparities in professional and educational
backgrounds among the researchers working in this field. The rationale is because, contrary
to what the curriculum and syllabus indicates, they do not share the same concern.
Consequently, this snag occasionally results in academics becoming entangled in protracted
discussions instead of bridging the divide by standardizing the curricula of all professions
or coursework.
Furthermore, Sharī‘ah committees may have to accept unpopular viewpoints and even
contradict the majority’s viewpoint. This occurs when Malaysian IFIs choose to adopt
scholarly viewpoints that are deemed contentious. This became apparent when Malaysian
IFIs accepted and incorporated tawarruk, bay‘al-‘innah, ujrah and conditional hibah into
their operations. In the meanwhile, the vast majority of academics in this subject have
severely critiqued all financial products. But given the circumstances, IR1 and IR3 decided
that putting these divisive ideas into practice may be a stopgap measure to establish
Shari‘ah values-based in IFIs. They claim that even though these viewpoints are debatable,
they still rely on Sharī‘ah evidence drawn from the Qur’an and the Prophetic tradition.

Discussion
The first study’s outcome makes it evident that applying al-Siyasah al-Shar‘iyyah has been
achieved and elevated to the top of the list of factors taken into account when making
decisions by IFIs. The idea of al-Siyasah al-Shar‘iyyah never abandons the Maqasid
al-Shari‘ah ideal, which motivates IFIs to defend humanities against any damage. By tying
every choice to the principles of al-Siyasah al-Shar‘iyyah, the governors examine the
concerns of all those engaged in IFIs. This involves monitoring each IFI’s operations to
make sure they adhere to Sharī‘ah laws and protect customers’ rights, as well as ensuring
that their businesses continue to generate healthy profits.
Al-Siyasah al-Shar‘iyyah is demonstrated by the efforts made to strengthen the roles of
all stakeholders in the Islamic financial sector, including organizations, industry players and
consumers. The board is required to institutionalize a strong Sharī‘ah governance structure
JIMA that is appropriate for the size, complexity and kind of the IFI’s operation. (Bank Negara
Malaysia, 2019). To accomplish this effort, the board must:
 approve policies relating to governance structure and reporting arrangements,
Sharī‘ah non-compliance risk management and other areas that are material to the
effective implementation of Sharī‘ah governance within the IFI;
 oversee the implementation of SAC rulings and decisions or advice of the Sharī‘ah
committee within all business and functional lines, including any business or risk
implications arising from such implementation;
 oversee the implementation of the internal control framework to prevent Sharī‘ah
noncompliance and any rectification measures to resolve incidences or
circumstances that may result or have resulted in Shariah noncompliance;
 oversee the performance of senior management and other officers entrusted to
implement Sharī‘ah governance framework such that the board is satisfied that the
measures of their performance are aligned with Sharī‘ah governance objectives; and
 promote a sound corporate culture that reflects the importance of adhering to
Sharī‘ah requirements in product development and marketing, strategy formulation,
business operations, risk management practices and other aspects that promote end-
to-end compliance with Sharī‘ah.

Furthermore, the governors convey their apprehension regarding al-Siyasah al-Shar‘iyyah,

as evidenced by their adherence to risk management protocols inside IFIs. In addition to
monitoring IFIs’ operations and transactions to ensure they adhere to Sharī’ah
requirements, this aids the governors in recognizing, assessing and managing liabilities,
earnings and personnel risks.
It is highly recommended that the governors take the initiative to publicly announce the
policy. It makes it easier for individuals to learn about the most recent policies and
contributes to their awareness goals. The researchers would want to offer their support
for this endeavor and make some recommendations for improvements that the governors
could take into account. This is due to the fact that most published items are only accessible
via their official websites or pages. For whatever reason, certain parties are unable to attain
them. The researchers humbly believe that the governors can convey the message more
effectively by using the advancements in communication technology. To raise awareness,
for example, the governors can use platforms for sponsored advertising. Thus, the concept
expressed in the policies might be communicated more simply and orally.
The findings of the second research indicate that the Sharī‘ah committee need to take the
lead to ensure that the IFIs adhere to the regulations put in place by the governors. This
seeks to uphold the IFIs’ full practice of al-Siyasah al-Shar‘iyyah. This is a significant duty
that the Sharī‘ah committee must fulfil. The members of the Sharī’ah committee are well
known for their proficiency in their respective fields, and their selection is predicated on
their familiarity with and comprehension of the financial system and Sharī’ah. To guarantee
the implementation of al-Siyasah al-Shari‘ah, the governors mandated that only qualified
scholars who meet the following criteria might serve on the Sharī‘ah committee:
 providing a decision or advice to the IFIs on the application of any rulings of the
Sharī‘ah Advisory Council or standards on Sharī‘ah matters that are applicable to
the operations, business, affairs and activities of the IFIs;
 providing a decision or advice on matters that require a reference to be made to the
Sharī‘ah Advisory Council;
  providing a decision or advice on the operations, business, affairs and activities of Al-Siyasah
the IFIs, which may trigger a Sharī‘ah non-compliance event; al-Shar‘iyyah’s
 deliberating and affirming a Sharī‘ah non-compliance finding by any relevant consideration
functions; and
 endorsing a rectification measure to address a Sharī‘ah noncompliance event.

From the researchers’ own standpoint, nevertheless, there are other ways to apply al-
Siyasah al-Shar‘iyyah in any IFI than relying too heavily on the Sharī‘ah committee. The
Sharī’ah committee is relying on restricted judiciaries to push the financial industry toward
complete Shari‘ah compliance, notwithstanding this dependence. The Sharī‘ah committee
seemed to advise and oversee the financial organization based on the aforementioned
standards. When the Sharī‘ah committee views things differently from other stakeholders in
that institution, things might occasionally get more difficult. Therefore, all parties inside the
financial institutions, regardless of their department or division, must endorse the
implementation of al-Siyasah al-Shar‘iyyah in the same way.
The third study’s findings show the governors’ perceptions of the effects of carrying out
al-Siyasah al-Shar‘iyyah in IFIs. The notions of takwa and tawhidic have also been
ingrained. The tawhidic idea inspires people to connect with Allah SWT in everything. Allah
SWT has commanded that riba, gambling and any other ambiguous money activity be
avoided. The governors are thus forced to use greater caution while making any decisions
pertaining to Sharī‘ah law. This is presumably what happens when al-Siyasah al-Shar‘iyyah
is applied to humanity.
According to the outcome from fourth study, various organizations and sectors in
Malaysia have been greatly influenced by IFIs’ outstanding application of al-Siyasah
al-Shar‘iyyah to guarantee the competence, efficacy and efficiency of their administration.
The Selangor State Islamic Religious Council has also released its yearly audited financial
report, which guarantees the organization’s ability to handle public funds and its
effectiveness as a Selangor authority. This is adapted from the requirement that IFIs submit
performance reports to the Malaysian Central Bank. It may be concluded that putting
al-Siyasah al-Shar‘iyyah into practice has improved some bodies’ management standards.
In addition, the travel and tourism sector has expressed interest in making al-Siyasah
al-Shar‘iyyah its top priority. Consequently, the Islamic Tourism Centre seized the chance to
launch an accreditation program that acknowledges travel goods, services, venues and
packages with essential components that appeal to Muslims and improve their travel
experiences, particularly in terms of fulfilling their religious requirements (Islamic Tourism
Centre, 2023). Regarding this, according to reports (New Strait Times, 2020 September 3,), 42
hotels will be acknowledged as Sharī‘ah compliant in 2020. Reports state that 5.33 million
Muslim tourists visited Malaysia in 2019. Through research, training, capacity building,
standardization and certification, Malaysian tourism currently aspires to become a globally
renowned center of excellence and reference for Islamic tourism and Muslim-friendly
tourism and hospitality.
The findings of the fifth research point to difficulties and snags, demonstrating that
putting al-Siyasah al-Shar‘iyyah into practice is not an easy process. The difficulties erupted
from several directions. This is due to the fact that no one who can relate to the IFIs has the
same viewpoint. As was already indicated, there have been instances where the governors
and IFI stakeholders have had different viewpoints. This led to the ability of IFIs to advance
mankind via their establishments. Because of this, the researchers recommend that
governors and stakeholders cooperate without prioritizing their personal interests while
striving to enhance IFIs. From a social standpoint, people should be aware that IFIs provide
JIMA a one-stop shop for Sharī’ah compliance initiatives. As a result, it keeps people away from
engaging in any immoral activity like usury, gambling and ambiguity. The mindset that
holds that IFIs ought to endorse a product that is less expensive than the standard ought to
shift. Scholars who made an effort to voice their opinions about the IFI system should be
applauded for their concern with Sharī‘ah issues. But an excessive number of disagreements
on academic discourse stages can be the roadblock impeding IFIs’ progress in serving the
ummah. Furthermore, researchers from different fields of study ought to collaborate to
discover a solution that would enable Malaysia’s IFIs to advance in the future.

Conclusion
The purpose of this study is to draw attention to the significance of al-Siyasah al-Shar‘iyyah
and its effect on Malaysian IFIs as a crucial tool for decision-making authorities and
governors. It draws attention to certain rules that the IFI may have established based on al-
Siyasah al-Shar‘iyyah.
The study discovered that al-Siyasah al-Shar‘iyyah assumes a crucial role for authorities
within IFIs, guiding their decision-making processes. In cases where novel issues arise that
are not explicitly addressed in the Quran, al-Sunnah or existing laws, whether through
specific terms or general principles, al-Siyasah al-Shar‘iyyah is used to develop new rulings
on these specific matters.
The inference drawn from this study suggests that authorities and governors engaged in
structuring Malaysian IFIs may use a framework of rules and regulations infused with
elements of al-Siyasah al-Shar‘iyyah to promote the well-being (masla
ha

h)

of the ummah.
This perspective, which is not extensively explored, despite Malaysia boasting numerous
scholars in this field, prompts the authors to academically delve into the discussion and
articulate the viewpoint from the governor’s standpoint.

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Further reading
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Engku Ali, E.R.A. and Oseni, U.A. (2016), “Towards an effective legal and regulatory framework for
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Ibn Manzur, M.M.A. (1984), Lisan al-‘Arab, 3rd ed., Dar Sadir, Beirut.
Ismail, M.Z., Rosland, A., Mohamad, M.T. and Ahmad, N.H. (2015), “Perbankan Islam di Malaysia:
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Kayadibi, S. (2015), “The theory Syari‘ah oriented public policy”, Ahkam, Vol. 15 No. 2, pp. 171-180. Al-Siyasah
Laldin, M.A. (2008), “Islamic financial system: the Malaysian experience and way forward”, al-Shar‘iyyah’s
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consideration
Mokhtar, H.S.A., Abdullah, N. and Al-Habshi, S.M. (2008), “Efficiency and competition of Islamic
banking in Malaysia”, Humanomics, Vol. 24 No. 1, pp. 28-48.
Salih, F.U. (2012), Al-Qawa’id wa al-Dawabit al-Fiqhiyyah wa Tatbiquha fi al-Siyasah al-Shar‘Iyyah,
Dar al-‘Asimah, Riyadh.

Corresponding author
Ahmad Akram Mahmad Robbi can be contacted at: akramrobbi@iium.edu.my

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