INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4114
www.rsisinternational.org
Management of Shariah Non - Compliance Income (SNCI) in Islamic
Financial Institusion
Muhammad Hanifah Haris & Nurul Athirah Mohd Azmi
University Islam Pahang Sultan Ahmad Shah, UnIPSAS
DOI: https://dx.doi.org/10.47772/IJRISS.2025.91100319
Received: 27 November 2025; Accepted: 08 December 2025; Published: 09 December 2025
ABSTRACT
The rapid growth of Islamic finance in Malaysia demonstrates strong demand for Shariah-compliant financial
products, yet the risk of Shariah non-compliance income (SNCI) continue to challenge the credibility of Islamic
financial institutions (IFIs). Such non-compliance, arising from contractual errors, operational weaknesses and
governance limitations, threatens public confidence and raises questions about effective Shariah governance.
This study examines the concept, sources, governance practices and disposal mechanisms of Shariah Non-
Compliance Income (SNCI) in Malaysian Islamic financial institutions (IFIs). Using a qualitative document-
based methodology, the research synthesises regulatory guidelines, academic literature and institutional practices
to identify the challenges and variations in SNCI management. Findings show that IFIs adopt structured
processes of detection, confirmation, reporting and rectification, with purification through charitable allocation
being the most common disposal method. However, significant gaps remain including uneven Shariah expertise
among staff, inconsistencies in interpretation and limitations in disclosure practices. The study highlights the
need for enhanced capacity building, harmonised Shariah interpretation, and stronger governance to maintain
the integrity and sustainability of Islamic finance.
Keywords: Shariah Non-Compliance Income (SNCI); Islamic Financial Institutions (IFIs); Shariah
Governance; IFSA 2013; Risk Management.
INTRODUCTION
The development and expansion of the Islamic finance and banking industry in Malaysia have shown remarkable
progress over the past a few decades. This is evident as the industry’s total assets have captured nearly 50 percent
of the market share compared to the conventional financial and banking sector. Such growth has been driven by
the strong demand for Islamic financial products and services among Malaysians, regardless of race or religion.
The industry’s ability to offer products comparable to conventional offerings has further encouraged customer
loyalty. At the same time, adherence to Shariah-compliant principles ensures that clients remain free from the
prohibited practice in Syariah law.
Despite this Shariah-compliant foundation, the risk of non-compliance may still occur due to failures in meeting
regulatory standards or decisions issued by authorities, such as the internal Shariah Committees of Islamic
financial institutions (IFIs) or the Bank Negara Malaysia (BNM). In line with these developments, BNM
introduced the Operational Risk Reporting Requirement through the Operational Risk Integrated Online
Network (ORION), which took effect on 22 September 2014. This policy requires IFIs to report all cases of
Shariah non-compliance, whether actual or potential, in accordance with prescribed procedures.
In Islamic jurisprudence, wealth or income derived from prohibited elements cannot be retained, and must
instead undergo a process of cleansing (tathir) through restitution or charitable disposal. However, differences
in opinions among scholars, coupled with varying institutional capacities, have resulted in differing approaches
across IFIs in Malaysia.
In Malaysia, authoritative bodies such as the State Islamic Religious Councils, Islamic Religious Departments,
Shariah Advisory Councils, and Shariah Committees within IFIs adopt slightly different approaches to managing
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4115
www.rsisinternational.org
and disposing of non-compliant income or assets. Nevertheless, these differences are relatively minor, allowing
institutions to adopt the most suitable opinion. For IFIs regulated by BNM, every case of Shariah non-compliance
whether actual or potential must first be reported to the Shariah Committee, which will then determine whether
the case truly constitutes non-compliance.
This study aims to: (1) explain the concept and implications of SNCI; (2) identify sources and types of SNCI in
IFIs; (3) analyse current management and disposal practices; and (4) compare variations in institutional
approaches to highlight best practices and challenges.
LITERATURE REVIEW
Shariah non-compliance event is referred to the practice or dealings that involved with interest (riba), uncertainty
(gharar), gambling (maysir) and other prohibited element such as pork, liquor and pornography as stipulated by
Muslim scholars. There are numerous SNC definitions. Al-Ghazali defines SNC event, also known as non-halal
(prohibited) practice, as any property acquired through unlawful means, such as corruption, theft, riba (usury),
hoarding, and gambling (Al-Bez, 2014). The other elements found to be forbidden in Shariah-compliant
commercial dealings include Ghubn (inequality), Ikra (duress), Ghala' (error), Taghrir (deceit), and Jahalah
(deception). In order to effectively implement Shariah risk management, Islamic banks need a comprehensive
understanding of these factors (Hassan, 2016).
Shariah risk has always been central and continues to be the most important aspect of Islamic finance. Islamic
finance is predicated on strict adherence to the Shariah law, which is considered essential. Any deviation from
Shariah compliance will erode the credibility of Islamic finance and shake the confidence of investors and
Muslim customer. To avoid muddying the waters between Islamic and conventional finance, Islamic finance
must ensure that this distinct risk, non-Shariah compliant risk, is audited and properly handled (Syed, 2018). All
IFIs operating in the banking and finance sector must adhere to Shariah standards in order to mitigate the negative
effects of Shariah risks like usury (riba), gambling (maysir), and uncertainty (gharar). Any unethical business
practises within the banking industry will not be tolerated under the current policy (Satkunasingam, 2006).
Every income that been classified as non-compliant with Shariah by the Shariah Committee of an Islamic
financial institution must be reported and managed in accordance with the guidelines and policies issued by
recognized authorities such as Bank Negara Malaysia (BNM), the State Islamic Religious Councils, or other
accredited bodies. According to Sheikh Dr. Yusuf al-Qaradawi (2012), any unlawful income cannot be rightfully
owned but instead should be channelled for public welfare. Such funds may be allocated to charitable causes,
including the care of orphans, the development of Islamic missionary work, the construction of mosques and
Islamic centres, the training of preachers, and the publication of religious works. Similarly, Zaharuddin Abdul
Rahman (2010) emphasized that if the unlawful wealth originates from a known source and the rightful owner
is identified, the disposal should be through returning the wealth to its owner, coupled with seeking forgiveness
and repentance from Allah SWT.
Sheikh ʿAtiyyah Saqar, former head of the Fatwa Committee at Al-Azhar, also highlighted that unlawful wealth
must be disposed of as part of repentance. He outlined two methods, first, returning the wealth to its owner or
their heirs if identifiable and second, if the owner is unknown, the wealth should be given to the needy, not as a
means of earning reward but purely to cleansing the wealth. Imam al-Ghazali (2004), on the other hand, strictly
prohibited the destruction of wealth, while Dr. Yusuf al-Qaradawi (2012) also prohibited leaving unlawful funds,
such as riba, in conventional bank accounts. He argued that doing so would indirectly strengthen institutions that
are fundamentally based on prohibited financial systems.
In this context, Asyraf, Mahbubi, and Lokmanulhakim (2012) explained that the rectification and cleansing
process may vary depending on the source and circumstances of the Shariah non-compliance incident. Some
types of income must be fully purified by channelling towards public welfare, while in other cases, the funds
may need to be returned to their rightful owners. In certain situations, rectification can be achieved without
requiring the total disposal of the non-compliant income, depending on the nature of the incident.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4116
www.rsisinternational.org
In Malaysia, the Islamic Financial Services Act (IFSA) 2013 was introduced as a comprehensive legal
framework to ensure that Islamic financial institutions (IFIs) operate in full compliance with Shariah principles.
The Act consolidates and repeals the Islamic Banking Act 1983 and the Takaful Act 1984, providing an end-to-
end Shariah compliance structure for the industry. Specifically, IFSA 2013 aims to regulate and supervise Islamic
financial institutions, payment systems, and related entities to ensure Shariah adherence in all activities,
products, and services. Also oversee the Islamic money and foreign exchange markets and promote financial
stability alongside strict Shariah compliance. Section 28(1) of IFSA 2013 required all operations, businesses,
and activities of Islamic financial institutions must always comply with Shariah (Kunhibava, 2015). This
indicates that Shariah compliance is not limited to certain stages but must be maintained through entire
contractual process, from inception to completion.
Statutory Requirements on Shariah Non-Compliance Events
The Shariah Governance Framework mandates continuous implementation of core functions such as Shariah
risk management, Shariah review and Shariah audit to ensure compliance within IFIs. Under Section 28(1) and
(2) of the Islamic Financial Services Act (IFSA) 2013, IFIs must ensure that their aims, operations, businesses
and activities are always consistent with Shariah principles. Furthermore, compliance with the rulings of the
Shariah Advisory Council (SAC) is deemed sufficient to establish Shariah compliance.
However, if there is any breach of Shariah principles, a violation of contractual terms, or failure to follow Bank
Negara Malaysia (BNM) guidelines, the institution is considered exposed to Shariah non-compliance (SNC)
risk. To handle this, under IFSA 2013, IFIs must immediately report any Shariah non-compliance event to their
Shariah Committee and notify Bank Negara Malaysia. The institution is required to cease the non-compliant
activity and submit a rectification plan within 30 days. Failure to comply may result in severe penalties, including
heavy fines and imprisonment.
Shariah Governance Framework
Shariah governance provides the structure through which SNC risk is assessed and managed. It includes both
internal and external mechanisms such as Shariah boards, Shariah auditors, and regulatory frameworks. A strong
governance system helps ensure that products and services are alight with Shariah-compliant, while also building
confidence and trust among stakeholders (Ginena & Hamid, 2015). However, one challenge in Shariah
governance is the lack of consistency in interpretation by scholars. Differences in rulings, either within the same
Shariah board or across institutions, may create uncertainty and raise the risk of non-compliance (Ginena, 2015).
Hamza (2013) argues that the effectiveness of governance largely depends on the independence of Shariah
boards and the consistency of their decisions across a country or region.
Compared to conventional corporate governance, Shariah governance adds unique features such as Shariah
supervisory boards and Shariah compliance departments. These bodies oversee Shariah risk management,
Shariah review, and Shariah audit, which must be carried out continuously (Omar, 2019). In Malaysia, for
example, the Islamic Financial Services Act (IFSA) 2013 requires IFIs to ensure that all operations are Shariah-
compliant and in line with the rulings of the Shariah Advisory Council (SAC). Failure to do so could result in
both financial and reputational losses (Chapra, 2022).In short, Shariah governance ensures that Shariah
principles are embedded into every stage of decision-making, providing both accountability and legitimacy for
IFIs (Hidayah, 2014).
Internal Control
Internal control is another important tool for preventing Shariah non-compliance (SNC) in Islamic financial
institutions (IFIs). It play a vital role in preventing operational and Shariah risks. Based on the COSO (2013)
framework, effective internal control comprises control environment, risk assessment, control activities,
communication and monitoring. Weak internal controls have been identified as a major contributor to SNC risks
in IFIs (Darmadi, 2013; Rahman, 2014).
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4117
www.rsisinternational.org
METHODOLOGY
This study employs a qualitative research approach based on an extensive literature review. The primary method
used is a comprehensive reading and analysis of existing academic articles, journal papers, regulatory guidelines,
and institutional reports related to the management of non-Islamic income within Islamic financial institutions.
By critically reviewing past research and documented practices, the study synthesises key insights, identifies
prevailing frameworks and highlights scholarly perspectives on how Islamic banks manage, report and dispose
of non-Shariah-compliant income. This method enables a deeper understanding of theoretical foundations,
regulatory expectations and practical applications without conducting fieldwork, ensuring that the findings are
grounded in established academic discourse and current industry practices.
The process began with the identification and selection of relevant sources through academic databases, library
archives and regulatory publications, including materials from bodies such as Bank Negara Malaysia (BNM),
the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and the Islamic Financial
Services Board (IFSB). Only sources that directly addressed SNCI or related themes in Islamic financial
institutions were included to ensure the study’s focus and relevance. Each selected work was then carefully
reviewed to extract key arguments, findings and recommendations. Thematic content analysis was used to
categorise findings into key themes: definition and concept, sources of SNCI, governance mechanisms and
disposal practices.
ANALYSIS AND FINDINGS
Understanding Shariah Non-Compliance Income (SNCI)
The concept of SNCI is central to the operations of Islamic financial institutions because it highlights income
that is tainted by elements prohibited under Shariah. This includes income that arises either directly from
prohibited activities such as riba (interest) or indirectly from operational weaknesses that result in non-
compliance (Omar & Hassan, 2019). The importance of addressing SNCI goes beyond financial considerations,
as it relates to the ethical and religious obligations of the banks in upholding Islamic principles. The Islamic
Financial Services Act (IFSA) 2013 reinforces this by requiring that all activities, operations, and business affairs
of IFIs always remain Shariah-compliant (Johari, 2022).
The regulatory framework, particularly the BNM Shariah Governance Policy and the Operational Risk Reporting
(ORR) system, further demonstrates the seriousness of SNCI management. By classifying Shariah non-
compliance into Potential SNC and Actual SNC, the framework ensures that all doubtful or confirmed cases are
monitored and reported (Musa, Salleh & Shafii, 2025). This dual classification reflects the principle of ihtiyat
(precaution) in Islamic jurisprudence, where avoiding doubtful matters is encouraged to safeguard compliance.
Types and Causes of SNCI
The findings reveal that SNCI originates from a wide range of sources, both contractual and non-contractual. On
the contractual side, errors in documentation, misapplication of terms, or the structuring of products that
inadvertently incorporate elements of riba, gharar, or taghrir may result in income being categorized as non-
compliant (Omar & Hassan, 2019). For example, issues have been reported in contracts such as Bai‘ Inah, where
certain terms may inadvertently suggest repurchasing arrangements, leading to concerns of resemblance to
prohibited transactions (Musa et al., 2025).
Non-contractual causes are equally significant. These include operational failures such as system errors, delayed
allocation of gold accounts, or zakat payments being routed incorrectly (Musa et al., 2025). Furthermore,
financing without proper Shariah screening has led to banks unknowingly supporting businesses that are not
permissible under Shariah, thereby creating SNCI (Johari, 2022). Another area of concern is sponsorship or
corporate social responsibility (CSR) initiatives that may inadvertently fund non-compliant events or activities.
Underlying these incidents are governance weaknesses, particularly in knowledge and capacity. Several studies
noted that the lack of qualified officers with strong Shariah backgrounds at the operational level hinders accurate
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4118
www.rsisinternational.org
detection of potential non-compliance (Musa et al., 2025). This gap often results in delays or errors in escalating
issues to the Shariah Committee (SC).
Management and Disposal of SNCI
Diagram 1.0 A Systematic Process in The Managing of Shariah Non-Compliance Income
Based on digram 1.0 show that Malaysian Islamic banks generally follow a systematic process in the
management of SNCI, reflecting both regulatory requirements and internal governance practices. The process
consists of four key stages: detection, confirmation, decision and rectification/disposal (Omar & Hassan, 2019).
1. Detection: Potential SNC events may be identified by Shariah review teams, audit functions, operational risk
units, or even external parties such as customers and whistle-blowers. Early detection is critical, as banks are
required to suspend questionable transactions to prevent further exposure (Johari, 2022).
2. Confirmation: Once detected, issues are investigated and assessed by the Shariah control function. Under
earlier regulations, confirmation required a Qualified Shariah Officer (QSO), but under the revised ORR, it
may be undertaken by officers with sufficient Shariah knowledge even if they lack formal Shariah
qualifications (Musa et al., 2025). This regulatory change, however, raises concerns about the consistency
and quality of assessments.
3. Decision and Reporting: The SC deliberates and confirms whether the event constitutes actual SNC.
Following confirmation, the bank must report the incident to BNM and submit a rectification plan within 30
days as mandated under IFSA 2013 (Johari, 2022).
4. Rectification and Disposal: The most common disposal method is purification, where the tainted income is
channelled to charity to ensure that the bank does not benefit from impermissible earnings. Some banks also
strengthen internal policies and procedures to prevent recurrence, such as refining Shariah screening tools or
enhancing IT systems (Omar & Hassan, 2019).
The principle of prudence is evident throughout this process. Malaysian IFIs generally follow a systematic SNCI
management process comprising detection, confirmation, decision and rectification. SNCI disposal is
predominantly executed through purification by channelling tainted income to charitable accounts. However,
disclosure practices remain inconsistent. While some banks provide detailed SNCI disclosures in their annual
reports, others offer only general statements, raising transparency concerns (Johari et al., 2023; Rosman et al.,
2017).
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4119
www.rsisinternational.org
Comparative Approaches and Best Practices
Although all Islamic banks in Malaysia operate under the same regulatory framework, implementation differs
across institutions. Larger banks with dedicated Shariah departments often demonstrate greater capacity to
manage SNCI effectively, employing specialized teams for Shariah review, risk management, audit, and research
(Omar & Hassan, 2019). In contrast, smaller banks sometimes consolidate these functions under fewer officers,
increasing the risk of oversight or delays.
Detection mechanisms also vary. Some banks rely heavily on manual audit and review processes, while others
utilize computer-assisted audit techniques to conduct full-population testing of transactions, which improves
accuracy and efficiency (Johari, 2022). Challenges are consistent across the industry. These include difficulty in
defining parameters for potential SNC, limited Shariah expertise among operational staff, and inconsistencies in
interpretation of Shariah rulings between institutions (Musa et al, 2025). Instances of attempts to conceal SNC
issues, as highlighted by members of the Shariah Advisory Council (SAC), further underscore the need for robust
governance and transparent reporting (Johari, 2022).
The comparative analysis between Malaysia and Bahrain demonstrates that both jurisdictions achieved relatively
high disclosure indices (0.56–0.75), with Malaysia performing better in 2014 and 2015, and Bahrain leading in
2013 (Rosman et al., 2017). Bahraini banks demonstrated more consistent disclosure of SNCI classification,
particularly in allocating such income to charitable accounts, whereas some Malaysian banks failed to disclose
this information altogether. Best practices identified include the establishment of dedicated Shariah Supervisory
Boards, internal guidelines that extend beyond regulatory requirements, and the use of multiple disclosure
platforms such as Shariah Supervisory Board reports, Notes to the Financial Statements, and risk management
disclosures (Johari et al., 2023; Rosman et al., 2017). These practices not only enhance transparency but also
reinforce the stewardship role of Shariah governance mechanisms.
CONCLUSION
The findings of this study affirm that effective management of Shariah Non-Compliance Income (SNCI) is
essential to safeguarding the credibility and sustainability of Islamic finance. Malaysian Islamic financial
institutions have established systematic processes of detection, confirmation, reporting and rectification to
ensure compliance with Shariah principles. The practice of purifying non-compliant income by channelling it
into charitable causes reflects both ethical responsibility and regulatory adherence. Nevertheless, the study
reveals persistent challenges, including limited expertise among operational staff, inconsistencies in interpreting
Shariah rulings, and uneven adoption of advanced audit technologies across institutions.
To strengthen Shariah governance, IFIs must enhance internal capacities by investing in the training of Shariah
officers, adopting more sophisticated risk management tools and improving transparency in reporting practices.
Greater harmonization of Shariah interpretations at the national and institutional levels would also reduce
discrepancies and improve stakeholder confidence.
Future research should extend beyond literature-based studies to include empirical investigations through case
studies or interviews with practitioners, regulators and Shariah scholars. Comparative studies between Malaysia
and other jurisdictions with established Islamic finance sectors, such as the Gulf countries or Indonesia, could
provide valuable insights into alternative governance models and disposal mechanisms. Additionally, exploring
the role of technology such as artificial intelligence and blockchain in detecting and managing SNCI represents
a promising avenue for innovation in Shariah-compliant financial practices.
REFERANCE
1. Abdul Rahman, Z. (2010). Perlukah memulangkan wang sumbangan kerana ia hasil judi? Retrieved from
http://www.zaharuddin.net/senarai-lengkap-artikel/3/963-memulangkanwang-sumbangan-kerana-ia-
hasil-judi-.ht
2. Al-Bez, A. (2014). Ahkam al-mal al-haram wa dawabit al-intifa’ wa al-tassaruf bihi fi al-fiqh Islami.
Jordan: Dar Nafais.
3. Al-Ghazālī. (2005). Iḥya’ ‘ulūm al-dīn. Beirut: Dār Ibn Ḥazmi.
4. Al-Qaraḍāwi, Y. (2012). Al-ḥalāl wa al-ḥarām fī al-Islām (1st ed.). Mesir: Dār al-Kutub al-Misriyyah.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4120
www.rsisinternational.org
5. Bank Negara Malaysia. (2014). Operational risk reporting requirement – Operational Risk Integrated
Online Network. Kuala Lumpur: Bank Negara Malaysia.
6. Bank Negara Malaysia. (2015). Compliance. Kuala Lumpur: Bank Negara Malaysia.
7. Bank Negara Malaysia. (2016). Financial reporting for Islamic banking institutions. Kuala Lumpur: Bank
Negara Malaysia.
8. Chapra, M. a. (2022). Corporate governance in Islamic financial institutions. Islamic Research and
Training Institute/Islamic, (pp. Paper No. 6,). Jeddah.: Islamic Research and Training Institute/Islamic,
Retrieved March 23, 2023.
9. Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2013). Internal Control
– Integrated Framework. Retrieved March 20, 2023.
10. Dusuki, A. W., Mahbubi, M. A., & Hussain, L. (2012). A framework for Islamic financial institutions to
deal with Shariah non-compliant transactions. Kuala Lumpur: ISRA.
11. Darmadi, S. (2013). Corporate governance disclosure in the annual report: an exploratory study on
Indonesian Islamic banks. Humanomics, 29(1), 4-23. doi:10.1108/ 08288661311299295.
12. Ginena & hamid. (2015). Foundations of Shariah Governance of Islamic Banks. West Sussex: John
Wiley & Sons. Retrieved March 12, 2023.
13. Ginena, K. a. (2015). Foundations of Shariah Governance of Islamic Banks. West Sussex: John Wiley &
Sons. Retrieved December 23, 2022.
14. Hamza, H. (2013). Sharia governance in Islamic banks: effectiveness and supervision model.
International Journal of Islamic and Middle Eastern Finance and Management, 6(3), 226-237.
15. Hassan, R. (2016). Shariah non-compliance risk and its effects on Islamic financial institutions. Al-
Shajarah: Journal of the International Institute of Islamic Thought and Civilization (ISTAC), 1(3), 21–
25.
16. Hidayah, N. (2014). Religious compliance in Islamic financial institutions. Doctoral dissertation. Aston:
Aston University. Retrieved March 23, 2023
17. Johari, N. (2022). Prudence in managing and reporting the Shariah non-compliant income by Malaysian
Islamic banks. e-Jurnal Penyelidikan dan Inovasi, 9(2), 75–87.
18. Johari, N., Kasim, N., Mohd Ali, N. A., & Mohd Arshad, R. (2023). Managing and reporting of Shari’ah
non-compliant income in Malaysian Islamic banks: A methodology perspectives. Al Tijarah, 9(1), 26–
34. https://doi.org/10.21111/at.v9i1
19. Kunhibava, S. (2015). Ensuring Shariah compliance at the courts and the role of the Shariah Advisory
Council in Malaysia. Malayan Law Journal, 3(1), 1–40.
20. Lewis, M. (2005). Islamic corporate governance. Review of Islamic Economics, 9(1), 5-29.
21. Lee, M. J. (2017), Islamic Banking in Malaysia: Shariah Theories, the Laws, Current Structures and
Practices and Legal Documentation, Kuala Lumpur: Lexis Nexis.
22. Musa, A. A., Salleh, S., & Shafii, Z. (2025). Criteria of potential Shariah non-compliance event: Analysis
in a full-fledged Islamic bank in Malaysia. Journal of Economics and Muamalat, 8(1), 89–99.
23. Omar, H. N., & Hassan, R. (2019). Shariah non-compliance treatment in Malaysian Islamic banks.
International Journal of Management and Applied Research, 6(4), 221–230.
24. Omar, H. N. (2019). Shariah Non-Compliance Treatment in Malaysian Islamic Banks. International
Journal of Management and Applied Research, 6(4), 220-233. Retrieved from
https://doi.org/10.18646/2056.64.19-016.
25. Quttainah, M. S. (2013). Do Islamic banks employ less earnings management? Journal of International
Financial Management and Accounting, 224(3), 203-233.
26. Rosman, R., Azmi, A. C., & Amin, S. N. (2017). Disclosure of Shari’ah non-compliance income by
Islamic banks in Malaysia and Bahrain. International Journal of Business and Society, 18(S1), 45–58.
27. Rahman, R. a. (2014). Effectiveness of fraud prevention and detection techniques in Malaysian Islamic
banks. Procedia – Social and Behavioral Sciences, 145, 97-102.
28. Satkunasingam, E., & Shanmugam, B. (2006). The consequences of culture on shareholder activism in
Malaysia. Journal of Applied Management Accounting Research (JAMAR), 4(1), 45–56.
29. Syed, A. S. (2018). Shariah non-compliance risk management in the takaful industry. International
Journal on Recent Trends in Business and Tourism, 2(2), 1–9.
30. Safieddine, A. (2009). “Islamic financial institutions and corporate governance: new insights for agency
theory. Corporate Governance: An International Review, 17(2), 142-158.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025
Page 4121
www.rsisinternational.org
31. Zada, N. S. (2017). Islamic banking structures: issues, challenges and future Direction- case study of
Malaysia. ISRA Research Paper, 1-49.
