Corporate governance and effective dispute management in Islamic financial institutions
The increasing growth of the Islamic finance industry and the proliferation of Islamic financial products in the global economy necessitate a framework for managing corporate disputes arising from internal differences and contractual relationships with third parties, particularly in banker customer...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
INSI Publications
2012
|
| Subjects: | |
| Online Access: | http://irep.iium.edu.my/27858/ http://irep.iium.edu.my/27858/ http://irep.iium.edu.my/27858/1/Corporate_Governance_and_Effective_Dispute_Management_in_IFIs.pdf |
| Summary: | The increasing growth of the Islamic finance industry and the proliferation of Islamic financial products in the global economy necessitate a framework for managing corporate disputes arising from internal differences and contractual relationships with third parties, particularly in banker customer relationships. Quality management in Islamic financial institutions can be sustained through
appropriate measures in managing such disputes effectively through some Sharī'ah-based mechanisms. This study examines corporate governance and dispute effective dispute management within the framework of Islamic financial institutions and the need to revive the administrative dispute resolution office of muhtasib (ombudsman). The study presents a model for fusing such an independent office
into the corporate structure of the financial institutions in order to promote effective governance. It is argued that instead of litigating petty claims against the financial institutions, the internal mechanism of muhtasib should be able to resolve such claims amicably without unnecessary escalation into full blown disputes. The paper concludes that such an office, which serves the purpose of corporate self regulation integrated into the corporate structure of the financial institution, will promote sustainable excellence. |
|---|