![]() It generally impacts the industry’s reputation as well as the reputation of the financial institution and thus, it may deteriorate reliance of the depositors, investors, customers and stakeholders in the long-term.This risk is unique to the Islamic banking and finance industry, and it is particularly significant to it for the following reasons: Failing to fulfill Shariah compliance requirements would generate a risk called ‘the Shariah non-compliance risk’. Shariah compliance is what distinguishes an Islamic bank from a conventional bank as the former observes certain rules and prohibitions not observed by the latter. One of the unique characteristics of Islamic banking and finance is compliance with Shariah principles and rulings. Islamic banking and finance has the responsibility to ensure compliance with Shariah principles in its products, instruments, operations, practices, management etc. Shariah governance is a component of corporate governance, and it is peculiar to Islamic banking and finance. ![]() Islamic Finance Program – Qatar Foundation
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