Shariah Non-Compliance Risk Management in Islamic Bank Boot Camp (Beginner.Intermediate.Advance)

This session provides the big picture of Shariah governance and Shariah risk management framework. It covers the impacts of Shariah non-compliance incidents on the reputational and financial aspect of Islamic banks. It will further discuss the roles of monitoring the Shariah non-compliance incidents in terms of rectification and recurrence prevention.

Training Outlines


Basic Concept of Islamic Banking

  • Position of banking activities in Islam
  • Key differences between Islamic and conventional banks
  • Prohibited elements in Islamic banking business
  • Selected key Shariah contracts applied in the Malaysian Islamic banking industry

Shariah Compliance as the Foundation of Islamic Bank

  • Shariah compliance in the Islamic Financial Services Act 2013
  • The importance of Shariah compliance
  • Impacts of Shariah non-Compliance

Shariah Governance Framework & Requirements on Shariah Non-Compliance Risk Management - Part 1

  • Introduction of Shariah Governance (recommendation by IFSB and AAOIFI)
  • BNM’s Shariah Governance Framework for Islamic Financial Institutions (SGF)

Shariah Governance Framework & Requirements on Shariah Non-Compliance Risk Management Part 2

  • Shariah Risk Management Requirements under SGF
  • Main Functions of Shariah Risk Management as required by SGF
  • Shariah non-Compliance Risk as part of Operational Risk
  • Causal Factors of Shariah non-compliance
  • Collective Responsibility in Managing Shariah non-Compliance Risk

Risk Management in Islamic Banking

Shariah Non-Compliance Risk Management Framework

  • Processes of Shariah Risk Management & Their Tools
  1. Risk Identification
  2. Risk Assessment and Measurement
  3. Risk Control and Monitoring
  4. Risk Reporting

Simulation Workshop – ‘Shariah Non-Compliance (SNC), where are you?’
Shariah non-Compliance Reporting Requirements within operational risk integrated reporting network

Simulation Workshop - Managing Shariah Non-Compliance Event Management of Shariah non-Compliance Income


Introduction to Shariah Non-Compliance Risk Management

  • Shariah Risk Management Requirements from Malaysian Experience
  • Main Functions of Shariah Risk Management as required by Shariah Governance Framework
  • Shariah Risk as part of Operational Risk
  • Causal Factors of Shariah non-Compliance

Analyzing Process of Shariah Non-Compliance Risk Management

  • Risk Identification
  • Risk Assessment & Measurement
  • Risk Control and Monitoring
  • Risk Reporting

Familiarizing With Tools & Enablers in Managing Shariah Non-Compliance Risk Management

  • Risk & Control Self-Assessment
  • Shariah Non-Compliance Management & Reporting
  • Shariah Key Risk Indicator
  • Shariah Process Risk Mapping New Product and Service Approval Process


Management of Shariah Non-Compliance Incidents

  • Reporting Requirements
  • Rectification Strategies
  • Shariah Non-Compliant Income Management

Areas of Shariah Non-Compliance Risk in Islamic Banks

  • Deposit and investment based products
  • Financing
  • Other processes and activities


Risk Governance and Shariah Governance Framework

  • Risk Governance
  • Shariah Governance Framework 
  • Role distinction between control units i.e. Risk Management, Internal Audit, and Compliance division 

Developing a Robust Shariah Non-Compliance Risk Management Framework 

  • Risk Strategy 
  • Organisational Strategy
  • Reporting
  • Building Blocks
  • Information Technology 

The Building Blocks 

  • Incidence Management and Data Collection (IMDC) - Loss Events Data
  1. Product process approval 
  2. Highlight possible are which may lead to Shariah non-compliance risk
  3. The impact of non-approval of Islamic products from the Shariah perspectives. 
  • Risk and Control Self-Assesment (RCSA)
  • Key Risk Indicator (KRI) 

Internal Capital Adequacy Assessment Process on Shariah Non-Compliance Risk Management - Pillar II 

  • Capital Computation 
  • Supervisory Review and Evaluation 

Disclosure Requirement - Pillar III

  • How comfotable and confident is the Shariah Committee to attest that the bank is fully Shariah compliant or otherwise. 


Risk Managers' Relationship with the Regulator 

Risk Manager and Balance of Power in the Bank 

Leveraging on Teamwork of Risk Management, Compliance and Internal Audit

  • Strategic Alliance

Leveraging on Teamwork of Risk Management, Compliance and Internal Audit 

  • Example of Islamic banking products 
  1. Contract 
  2. Structure 
  3. Operational 
  • Highlight possible area which may lead to Shariah non-compliance based on case studies of other institutions. 

Shariah compliance moving forward by Datuk Dr. Mohd Daud Bakar 

  • The perspective of global Shariah scholars on the issues and challenges of Shariah non-compliance risk. 


Learning Outcome:

After completing this session, participants should be able to:

  • Mitigate any possibilities of Shariah non-compliance event in the Islamic financial institutions;
  • Comprehend the processes of Shariah risk management and explore experience in implementing the processes which include identifying and assessing Shariah risks;
  • Propose possible questions for each of Shariah risk management processes;
  • Appreciate the importance of an effective risk governance and Shariah governance framework;
  • Develop a sound and robust risk management framework to manage Shariah non-compliance risk; and
  • Leverage on the smart alliance of Risk Management, Compliance and Internal Audit.

Event Properties

Event date: 04-12-2017 9:00 am
Event End Date: 08-12-2017 5:00 pm
Capacity 30
Cut off date 01-12-2017
Individual Price RM5,000.00
Location Kuala Lumpur
We are no longer accepting registration for this event
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Subject Matter Experts



 dr daud


Datuk Dr. Mohd Daud Bakar 

Datuk Dr. Mohd Daud Bakar is the Founder and Executive Chairman of Amanie Group that deals with many facets of global Islamic finance from Shariah advisory to structured training to media and to Big Data Analytics. Amanie Advisors, one of the companies under the Group, has presence in ten major cities in the world. He currently sits as a Chairman of the Shariah Advisory Council at the Central Bank of Malaysia, the Securities Commission of Malaysia, the Labuan Financial Services Authority and the International Islamic Liquidity Management Corporation (IILM). He is also a Shariah board member of various financial institutions, including the National Bank of Oman (Oman), Noor Islamic Bank (Dubai), Amundi Asset Management (France), Morgan Stanley (Dubai), Bank of London and Middle East (London), BNP Paribas (Bahrain), Dow Jones Islamic Market Index (New York), First Gulf Bank (UAE), amongst many others. 



Mohd Zikri Mohd Shairy

Zikri holds a Bachelor of Laws (LL.B) and Master of Comparative Laws (MCL) from International Islamic University Malaysia in 2006 and 2013 respectively. His journey in the Islamic banking industry began in January 2007 after graduated from his first degree. He served Bank Muamalat Malaysia Berhad and RHB Islamic Bank Berhad as financing executive who based at several branches of the banks. During such period, he primarily deals with retail products of the banks such as mortgage, hire purchase, bancatakaful, Islamic wills and deposit. He later joined Shariah Division of Bank Islam Malaysia Berhad in September 2009 and served the bank until January 2015 where he led Shariah Risk Management Department for about 4 years. Currently, he is the Chief Executive Officer of Amanie Advisors Sdn. Bhd. and involved in Shariah audit as well as Shariah advisory for local and international clients.


Puan Rohani

Puan Siti Rohani

Siti Rohani is the former Chief Risk Officer (CRO) of a Development Financial Institution (DFI) and a finance company in Abu Dhabi. She has over thirty (30) years of banking experience starting with Trade Finance operations, commercial banking, corporate banking and Islamic banking. During her stint with a full-fledged Islamic bank, she has pioneered product development and credit assessment. Her extensive banking experience has put her in a good stead to head the Risk Management team and finally a position of CRO. Siti graduated from University of Western Australia (UWA) with Bachelor of Commerce, majoring in Accounting. Her interest in Islamic Banking has seen her pursuing a Postgraduate Diploma in Islamic Banking and won the Best Student Award. Being in the senior management team, Siti has regular engagement with the Board of Directors, Shariah Committee, Regulators, shareholders and various stakeholders.


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