CHALLENGES IN CULTIVATING SHARIAH COMPLIANCE CULTURE IN MALAYSIAN ISLAMIC FINANCIAL INSTITUTIONS
DOI:
https://doi.org/10.53840/ijiefer213Keywords:
Corporate Governance, Governance Challenges, Islamic Financial Institutions, Regulatory Framework, Shariah Compliance CultureAbstract
The study examines the challenges Malaysian Islamic financial institutions (IFIs) face when building a robust Shariah compliance culture in accordance with guidelines set by Bank Negara Malaysia (BNM). Using an exploratory qualitative method that merges semi-structured interviews with thematic analysis of secondary data, it assesses how leadership commitment, organisational structures, and regulatory factors shape Shariah adherence. Findings reveal inconsistencies in Shariah interpretation, conflicts between ethical mandates and commercial objectives, and complexities in balancing competitiveness with Islamic principles. These gaps call for stronger leadership, targeted training, and transparent governance to embed authentic Shariah values. While the focus on Malaysian IFIs may limit broader applicability, the research underscores the crucial role of an integrated Shariah compliance culture in bolstering Islamic finance’s identity and competitiveness.
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