Standardization Efforts in Islamic Finance

Though Shari’ah is flexible in nature, the growing number of Islamic financial institutions (IFIs) across jurisdictions and the sophistication of Islamic finance instruments require having standardisations to regulate the markets to promote their transparency and improve their stability (to create a fair and equitable financial system). As part of this effort, several international Islamic standard-setting bodies, including AAOIFI, IFSB, and IIFM, have issued numerous standards covering Shari’ah Governance, Islamic accounting and auditing, etc. Furthermore, the guidelines and resolutions are introduced at the local level.