Shariah Compliance is All About Ethics all Around the Process

Even though standard’s has been developed by IFSB and much theoretical work is done by AAOIFI, much more is required to be done in real life of Islamic Financial Institutions.
The report should be based on 3X3 matrix and should cover all spheres of institutions and stakeholders.
Shari’ah Compliance – It should cover all details related to Shari’ah compliance of the company.
o       Processes adopted,
o       Procedures adopted
o       Responsibilities and accountabilities
Shari’ah compliance should be evaluated from the product development stage to exit. It should also include the operation of the institution as whole.
  • Product Development
  • Product life cycle
  • Institution Practices
This is very important to structure a product according to Shari’ah principles, at the same time it must be very clear that the type of contract used, methods and methodology all must comply with Shari’ah. Product development is just start of the journey and whole path and road traveled during the life of product must comply with Shari’ah not just initial declaration that we will travel Islamic Path. That is the reason why compliance and evaluation is must across the life cycle of the product.
Islamic Finance and Shari’ah is name of philosophy, life style and way of life. It is not just another name of system which governs your accounting. It is complete way of life and this way of life must percolate down from top to bottom. The commitment to Islamic concept of social justice through economic upbringing and distribution of wealth in society is most important. Justice to your people and transparency to all your stake holders is what Islamic System wants. This is what must be evaluated as an institution, its philosophy and its commitments as whole. This Islamic Institution must be socially committed and this commitment should come from top and should be seen in practice.
Ethics and Corporate Social Responsibility
Ethics and social responsibility is core of Islamic Economics.  All investment must pass the basic Islamic Tenets of wealth distribution, social justice and sustainable development. The audit must cover all aspects of ethics and corporate social responsibility, how it is going to make difference to the lives of the all stake holders. Charity is good deed but ethics and CSR is much wider concept and goes beyond this and covers all stake holders including society and how you plan to affect their lives positively. All investment must pass these criteria of evaluation of stakeholder.
  • Product Development
  • Product Value Chain
  • Institution as whole
The product should be developed looking at its benefit to the society and how this investment will change life of the people and stakeholder.
Islamic Finance Institution should develop product which shows commitment to society at large and this commitment should clearly be mentioned in offer documents.
During product value chain and life cycle the actual outcome and its stated goal and target should be evaluated. This will provide the insight into real success of the product. The product value chain analysis is very important to declare success of the product.
Ethics and CSR of the Institution
Ethical Audit and CSR has become now standard practice and procedures. We just need to mould it to our needs and Islamic Principle so we will be able to find real compliance of Islamic Institutions to Islamic Ethics and Social Responsibility.
Transparency and Corporate Governance
Even though IFSB (Islamic Financial Services Board) has already issued guidelines on transparency and corporate governance it is rarely followed. It is very important to follow the guideline so that investors in particular and society in general will have confidence in the Islamic Institution.


  1. Equality in Islam, nice joke.
    Hadith 37%
    Sira 81%
    Koran 64%
    Total 60%
    Amount of Text Devoted to the Kafir.
    It is very simple: if you don’t believe Mohammed and his Koran, you are a Kafir. CH.9, VS.5
    It is all about Non-Muslims. You must know it.

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