Shariah compliance function in Malaysian islamic bank : case study of Bank Kerjasama Rakyat Malaysia Berhad

Abstract

The aim of this study is to explore how Shariah Compliance Function is practised in Malaysian Islamic bank and how different are the practices between pre and post implementation of Shariah Governance Framework for Islamic Financial Institutions which was issued by Bank Negara Malaysia. The study is a qualitative and exploratory research. The research utilises a combination of library-based study and semi-structured interview to achieve its objectives. Bank Kerjasama Rakyat Malaysia Berhad (afterwards will be referred as Bank Rakyat) was chosen for case study of this research. This study revealed that the implementation of Shariah Governance Framework for Islamic Financial Institutions produces significant positive impact to Shariah Compliance Function in Malaysian Islamic Bank. Nonetheless, it is not accurate to assume that only after the implementation of Shariah Governance Framework for Islamic Financial Institutions, Shariah Compliance Function exists in Malaysian Islamic Bank. In addition, there are good practices which the researcher believed should also be followed by other Islamic banks which are among others in term of capacity of manpower and competency of officers which implement Shariah Compliance Function.