Sacred immunity and ethical laundering in religious financial systems
DOI:
https://doi.org/10.15282/jgi.9.1.2026.13648Keywords:
Ethical accountability, Public trust, Religious governance, Financial integrity, Islamic finance, Maqasid al-ShariahAbstract
This narrative review examines ethical accountability and public trust in religious financial governance. It proposes a conceptual framework that embeds financial integrity within faith-based institutions, with a particular focus on Islamic finance. Despite their significant moral authority, many religious organisations operate in governance vacuums that expose them to financial misconduct, operational opacity, and severe reputational risk. While global regulatory frameworks, such as the Financial Action Task Force (FATF), classify religious charities as high-risk entities, academic inquiry into this intersection remains siloed within either theological or compliance-centric discourses. To bridge this divide, we conducted a structured narrative review of peer-reviewed literature (2020–2025) across Scopus, Web of Science, Dimensions AI, and Google Scholar. Studies were selected based on their focus on institutional oversight, fiduciary ethics, stakeholder trust, and Shariah-aligned governance, supplemented by backward snowballing to achieve theoretical saturation. The review identifies five core governance challenges: (1) ethical leadership and administrative dissonance; (2) internal control and structural deficiencies; (3) regulatory pluralism; (4) digital ethics; and (5) the behavioural underpinnings of public trust. Furthermore, concepts such as "sacred immunity" and "ethical laundering" highlight how religious symbolism can be weaponised to obscure financial wrongdoing. Grounded in these findings, the paper proposes an integrated framework aligning Maqasid al-Shariah with global governance standards. By shifting the discourse from normative ideals to enforceable institutional structures, this review offers an actionable reform agenda for policymakers, regulators, and religious leaders to restore legitimacy, resilience, and public trust in religious finance.
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