Shariah Compliance Practice: An Analysis of Trends among Islamic Banks in Nigeria

  • Ibraheem Alani AbdulKareem Faculty of Business and Management, Universiti Sultan Zainal Abidin (UNISZA), Malaysia
  • Mohd Sadad Mahmud Faculty of Business and Management, Universiti Sultan Zainal Abidin (UNISZA), Malaysia
  • AbdulFattah AbdulGaniyy Department of Accounting, Federal Polytechnic, Zamfara State, Nigeria
Keywords: Islamic banks, Shariah compliance, Advisory committee of experts and Nigeria


The objective of this study is to examine the trends related to the Shariah compliance practice among Islamic banks in Nigeria. It is also conducted to establish the loopholes in the existing Islamic banking system and to suggest measures to remove Shariah non-compliance in Islamic banks in Nigeria. The study is based on primary data. The data was gathered through a questionnaire survey with the employees, researchers, and Islamic banking experts. The study is based on descriptive findings by analysis of mean, standard deviation, and variance to examine the trends of Shariah compliance practice in Islamic banks in Nigeria. The study found that Islamic banks in Nigeria are doing well in terms of Shariah compliance practice relating to their products and services. Besides, the advisory committee of experts are quite knowledgeable in determining fatwa and rulings in all Islamic banking matters in Nigeria. This is because Shariah compliance is considered as the backbone of Islamic banking as it gives legitimacy to their products and services. The study has implications for all the banks, customers, Shariah Advisory Committee, regulatory bodies, and other stakeholders in Nigeria to further checkmate the various factors that could prevent Shariah non-compliance. The study, therefore, recommends extensive efforts via Shariah knowledge and seriousness of the bank employees as well as regulatory authorities to enforce Shariah compliance thereby guiding customers to choose Islamic banking products in a better and improved way.


Abbas, M. H., & Ali, H. (2019). An Empirical Study of Shariah compliance in Islamic Banks of Pakistan. Journal of Islamic Finance, 8(2), 21-30.

Abbas, M., Zuha, S., Abdul Rahman, R., & Mahenthrian, S. (2009). Ultimate ownership and performance of Islamic Financial Institutions in Malaysia. In Asian Finance Association Conference, July.

AbdulKareem, I. A., & Mahmud, M. S. B. (2019). Infrastructure Project Financing Through Sukuk as an Alternative to Conventional Bond Financing. Journal of management and operation research, 1(19), 1-11.

AbdulKareem, I. A., Mahmud, M. S., AbdulGaniyy, A., & Yazid, A. S. (2020a). Shariah Issues in the Application of Repurchase Undertaking in Sukuk Mudarabah. International Journal of Business and Technopreneurship, 10(2), 173-182.

AbdulKareem, I. A., Mahmud, M. S., & AbdulGaniyy, A. (2020b). Thematic Review of Sukuk Ijarah Issued in Nigeria: An Opportunity for Economic Development. Jurnal Iqtisaduna, 1(1), 61-80.

Ab Ghani, N. L., & Rahman, A. R. A. (2015). An analysis of Shari'ah audit practices in Islamic banks in Malaysia. Jurnal Pengurusan (UKM Journal of Management), 43, 107-118.

Adam, N. L., & Bakar, N. A. (2014). Shariah screening process in Malaysia. Procedia-Social and Behavioral Sciences, 121, 113-123.

Ahmad, I. M. (2016). Operational challenges in the Shari'ah governance of Islamic Financial Institutions (IFIs) in Nigeria: Issues and solutions. Journal of Islamic Economics, Banking and Finance, 113(5818), 1-20.

Ahmed, H. (2014). Islamic banking and Shari'ah compliance: a product development perspective. Journal of Islamic finance, 3(2), 15-29.

Ahmed, E.R., Islam, A. and Amran, A.B. (2019). Examining the legitimacy of Sukuk structure via Shariah pronouncements. Journal of Islamic Marketing, 10(4), 1151-1166.

Alkali, M. B., & Buang, A. H. (2017). Legal Aspects of Islamic Banking and Finance in Nigeria. Jurnal Syariah, 25(2), 311-362.

Arwani, A. (2018). Issues and Challenges of Shariah Auditing in Islamic Financial Institution and Corporate Governance Compliance. Media Riset Akuntansi, Auditing & Informasi, 18(2), 169-186.

Central Bank of Nigeria. (CBN) (2019). List of Deposit Money Banks and Financial Holding Companies Operating in Nigeria as at September 30, 2019.

De Costa, M. F. S., & Hassan, M. A. M. (2020). Understanding the Concept of Riba and the Measurement of Riba-based Components of Shariah-compliant Securities in Malaysia. Asian Journal of Research in Education and Social Sciences, 2(2), 141-148.

Dogarawa, A. B. (2011). An Exploratory Study of the Economic Viability of and Opportunities for Islamic Banking in Nigeria. International Journal of Management, Economics and Commerce, 2(1), 1-16.

El-Gamal, M. (2008) Incoherence of Contract-Based Islamic Financial Jurisprudence in the Age of Financial Engineering. Wisconson International Law Journal, 25(4), 605-623.

Hamman, A. M. (2016, August 28-30). The Role of Advisory Committee of Experts and Product Development in Nigerian Islamic Banks. 4th International Conference on Accounting, Business and Economics, Primula Beach Hotel, Kuala Terengganu, Malaysia.

Hamman, M. A., Obafemi, O. A. & Yero, I. J. (2013). The need for a robust non-interest Banking Legal Framework in Nigeria. Nigerian Journal of Accounting and Finance, 5(2), 118-150.

Hassan, R., Triyanta, A., & Yusoff, A. (2011). Shariah compliance process in Malaysian Islamic banking. Malayan Law Journal, 5(l), 1-16.

Injas, M. M. Y., Haron, M. S., Ramli, R., & Injas, R. A. (2016). The importance of the Shari'ah supervisory boards (Ssbs) in the Islamic banking system. South-East Asia Journal of Contemporary Business, Economics and Law, 9(2), 25-31.

Iqbal, M., Ahmad, A., & Khan, T. (1998). Challenges Facing Islamic Banking, Islamic Research and Training Institute, Islamic Development Bank (Occasional Paper No. 1, 1st ed.). ISBN: 9960-32-065-0.

Ishaaq El-Mubarak, A. M. O., Mustapha, Z., Mohamed, A. M. T. B., & Ibrahim, G. (2020). Laws of Islamic Banking in Nigeria: Critical Review and Best Practice Proposal. International Journal of Academic Research in Business and Social Sciences, 10(3), 29-42.

Mahmud, M. S., AbdulKareem, I. A., Ali, M. O., Fadah, I., & Arifin, A. A. (2021, November). Shariah Governance in Islamic Financial Institutions in Nigeria: An Empirical Study (pp. 168-179). Proceedings of the International Conference on Management, Business, and Technology (ICOMBEST 2021).

Mohd Noor, N. S., Mohd. Shafiai, M. H., & Ismail, A. G. (2019). The derivation of Shariah risk in Islamic finance: a theoretical approach. Journal of Islamic Accounting and Business Research, 10(5), 663-678.

Mohd Noor, N. S., Ismail, A. G., & Mohd. Shafiai, M. H. (2018). Shariah Risk: Its Origin, Definition, and Application in Islamic Finance. SAGE Open, 8(2), 2158244018770237

Moses, E., Che-Ahmad, A., & Abdulmalik, S. O. (2020). Board governance mechanisms and sustainability reporting quality: A theoretical framework. Cogent Business & Management, 7(1), 1771075.

Muhamed, N. A., & Radzi, R. M. (2012). An International Comparative Study on Shariah Governance Supervision of Sukuk Defaults. Journal of Islamic Economics, Banking and Finance, 113(467), 1-24.

Rammal, H. G. (2006). The importance of Shari'ah supervision in Islamic financial institutions. Corporate Ownership and Control, 3(3), 204-208.

Rashid, U. S. A., Rahman, A. A., & Markom, R. (2018). The Regulatory Framework on Liquidity Risk Management of Islamic Banking in Malaysia. International Journal of Business and Society, 19(S3), 332-352.

Rizqiani, D., & Yulianto, A. (2020). The implementation of sharia audit process, implication of sharia regulatory and human resource aspects. Journal of Islamic Accounting and Finance Research, 2(1), 51-68.

Sanusi, L. S. (2011). Islamic Finance in Nigeria: Issues and Challenges. (A Lecture delivered at Markfield Institute of Higher Education, UK., 17 June 2011).

Sava, D., & Valery, S. (2019). Risk Management in Dual Banking Systems: Islamic Ethical and Conventional Banking. Review of Business and Economics Studies, 7(4), 6-12.

Sa'id, H. (2020). Exploring the development of Islamic banking in Nigeria using an actor-network theory perspective. Journal of Islamic Accounting and Business Research, 11(5), 1083-1099.

Sekaran, U., & Bougie, R. (2013). Research Methods for Business: A Skill-Building Approach (6th ed.). John Wiley and Sons.

Siddiqi, M. N. (2006, April 21). Shariah, economics and the progress of Islamic finance: The role of Shariah experts. Paper presented at Pre-Forum Workshop on Select Ethical and Methodological Issues in Shari'a-Compliant Finance. Cambridge, Massachusetts, USA.

Ullah, H. (2014). Shari'ah compliance in Islamic banking: An empirical study on selected Islamic banks in Bangladesh. International Journal of Islamic and Middle Eastern Finance and Management, 7(2), 182-199.

Usmani, M. T. (2008). Sukuk and their contemporary applications.

Zulkhibri, M. (2015). A synthesis of theoretical and empirical research on sukuk. Borsa Istanbul Review, 15(4), 237-248.

How to Cite
Ibraheem Alani AbdulKareem, Mohd Sadad Mahmud, & AbdulFattah AbdulGaniyy. (2022). Shariah Compliance Practice: An Analysis of Trends among Islamic Banks in Nigeria. International Journal of Business and Society, 23(1), 137-151.