OVERCOMING IMPLEMENTATION CHALLENGES FOR SHARIAH GOVERNANCE IN THE MALDIVES

Abstract

Since its introduction to the country in 2003, Islamic finance has found its place in the Maldives. However, it was only recently that a comprehensive Shariah Governance Framework (SGF) was enacted by the Maldives Monetary Authority (MMA) for the Islamic financial institutions. This study delves into the landscape of Shariah governance prior to the framework's establishment, while also examining the key gaps and challenges encountered during the implementation of this framework. By utilising qualitative methods, the study uncovers that the objectives of the SGF primarily focus on ensuring Shariah compliance, closely resembling Malaysia's framework. Noteworthy challenges encompass a lack of independence, awareness, transparency, competency, and consistency. To address these issues, the study puts forth several recommendations. These include leveraging a proactive regulatory approach through the involvement of the MMA, seeking governmental support, formulating external Shariah audit prerequisites, strengthening fit and proper criteria, enforcing more stringent requirements, allocating funds for continuous training initiatives, creating standardised operating procedures and templates, and systematically evaluating the implementation of the Shariah governance framework.