Governance in Islamic Finance

Governance in Islamic finance refers to the systems, rules, and practices that ensure financial institutions operate ethically, transparently, and in accordance with Islamic principles. This includes overseeing activities to avoid earning money through forbidden (haram) practices like excessive interest (riba) or gambling. Islamic finance institutions typically have a Shariah board—comprising scholars knowledgeable in Islamic law—that guides and supervises their operations. Good governance ensures that the institution remains true to Islamic values, maintains trust with customers and regulators, and promotes responsible, ethical financial practices.