The Development of Shariah Risk Management Model (SRM-i) for the Use of Shariah Compliance Organizations

Abstract

The Bank Negara Malaysia introduced Shariah Governance Framework (SGF) in 2011, does not state the needs to have proper risk management. The personal observation as a Shariah Manager and at the same time as the Shariah auditor, the experience has taken me to the other side of the world. Throughout the journey, I found that risk management has been dependent and assigned to the conventional risk management team as well as to the risk coordinator. Concludes that no qualified Shariah risk officer has been given to do so because according to what has been depicted from IFSA or SGF, Shariah risk is something that was co-existing along with the conventional risk. There is not acceptable because Shariah risk has its unique criteria and terminologies despite the use of normal risk appetites. This issue has become an Area of Concern (AOC) in the recent audit finding in a few organizations. There is no proper Shariah risk management in place and deemed the important Shariah Risk Management model (SRM-i) to rectify the non-compliance recorded.