Shariah Compliance and Governance in UAE Islamic Banks: An Analytical Assessment of Regulatory Frameworks and Practices

Abstract

The structural design of Shariah governance frameworks, focusing on three lines of defense, board and senior management accountability, the independence and composition of ISSCs, and the interaction with the HSA  .This study critically examines the regulatory infrastructure and governance mechanisms ensuring Shariah compliance in Islamic banks operating in the United Arab Emirates (UAE). Drawing upon the Central Bank of the UAE’s Standard Re. Shari’ah Governance for Islamic Financial Institutions (STA‑LFI‑GOV‑2020), updated in April 2020, the research outlines the prescribed roles and responsibilities of the Higher Shari’ah Authority (HSA), institutional Internal Shari’ah Supervisory Committees (ISSCs), and supporting control and audit divisions  . Ultimately, the paper evaluates how effectively current governance mechanisms safeguard Shariah compliance while balancing financial stability, market innovation, and regulatory transparency in the UAE context. It concludes with recommendations to enhance governance effectiveness, strengthen institutional accountability, and bridge gaps between international standards and national enforcement practices.