Important characteristics of Shari'ah compliance
Shari'ah compliance has three key characteristics: (A) ensuring that all contractual obligations must be met; (B) avoiding any unlawful acts or terms; and (C) maintaining compliance during the course of the product's lifespan. One of these regions, or, in the worst case, all three, may be the site of a potential breach. The failure to maintain ongoing compliance, however, usually constitutes the most likely breach. It is possible to recommend a product as compliant if it satisfies all requirements and is free of all banned phrases, such as mortgage finance. If a customer were to default, an IFI might want to make an additional payment to the consumer that isn't legal. The approach and the result both need to reflect shari'ah conformity. As mentioned above, it should begin with the product design, continue through product execution, and address all auxiliary services like accounting, IT, marketing and advertising, legal documents, risk management, application forms, and other paperwork.
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