Regulation and performance of Islamic banking in Bangladesh

Abu U. Ahmad, Kabir Hassan

    Research output: Contribution to journalArticle

    64 Citations (Scopus)

    Abstract

    This article examines current legal and regulatory issues of Islamic banking in Bangladesh. The most important issue in this context is the lack of a well-defined regulatory and supervisory framework for Islamic banks for their effective functioning in line with the tenets of Shariah. Other major issues come from the absence of an interbank Islamic money market, following the same policy and guidelines for Islamic and conventional banking by the Bangladesh Bank, presence of a discriminatory legal reserve requirement for Islamic and conventional banking, prevalence of a restrictive environment in the capital market, and the lack of legal support and protection of Bangladesh Bank to avoid the associated risks of Islamic banks. For this purpose, it is suggested that Islamic banks in Bangladesh should have an independent banking act that controls, guides, and supervises their functions and provide legal support to the parties concerned.
    Original languageEnglish
    Number of pages27
    JournalThunderbird International Business Review
    Publication statusPublished - 2007

    Keywords

    • Bangladesh
    • Islam
    • bank management
    • banks and banking
    • law and legislation
    • religious aspects

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