The Roles of Ombudsman Scheme to Solve Customers Disputes in Islamic Finance

The primary objective of this research is to evaluate the effectiveness of the Ombudsman Scheme under the Islamic Financial Services Act 2013 (IFSA 2013), particularly in its role in reducing complaints from clients of Islamic financial institutions to the Ombudsman for Financial Services (OFS). The study examines the statutory and regulatory framework and analyzes trends in OFS usage as a redress mechanism. Employing a doctrinal legal research approach, it reviews relevant literature, primary and secondary legal sources, field observations, and judicial decisions on Islamic finance disputes. Findings show a decline in OFS complaints, linked to the scheme’s conciliatory processes and expanded Alternative Dispute Resolution (ADR) options, providing practical alternatives to litigation. This reflects IFSA 2013 compliance and confirms the scheme’s intended function. The study advances knowledge in Islamic and conventional finance, regulatory compliance, enforcement, ADR, and capital markets, with implications for judicial authorities and Shariah Advisory Councils of Bank Negara Malaysia and the Securities Commission. Addressing limited scholarship on OFS performance in Islamic finance, it assesses the scheme’s facilitation of fair, confidential, timely, and Shariah-aligned dispute resolution.