Development of the Islamic Banking System

Al-Harbi, Ahmad

doi:10.15640/jibf.v3n1a2

Cited by 54 publications

(71 citation statements)

References 1 publication

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“…He proposes the equitybased instrument to replace the open market operation. Al Harbi (2015) described the historical evolution of Islamic Banking in a different region of the world. Yasin and Khan (2016) It can be summed up on the above discussion that these studies did not initiate the issue of Islamization of Islamic banking and monetary policy in the 27 OIC Muslim countries from Asia.…”

Section: Literature Reviewmentioning

confidence: 99%

Islamization of Monetary Policy of 27 OIC Muslim Countries in Asia: The Successes, The Barriers and The Future Directions

Hossain

2020

GReviewIEB

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The Islamization of banking, monetary policy, and the financial system began in 1975 after the setup of the Islamic development bank (IDB). Firstly, this paper discusses a concise framework of Islamic monetary policy. Then it presents the success and obstacles of the Islamization process of the monetary policy among the 27 OIC member Muslim countries in Asia and provides future directions to enhance the Islamization process. This paper employed secondary data and used the three criteria to measure the Islamization process: 1) Islamization of commercial banking; 2) making Islamic banking guidelines & regulations; 3) innovation and starting the Islamic monetary policy instruments. This paper finds that more than 154 Islamic commercial banks are operating under the Conventional monetary policy in 23 countries with very few Islamic monetary tools. On the contrary, Iran follows full-pledged Islamic monetary policy with 30 Islamic commercial banks. More precisely, in these countries, only 17% of total banks are Islamic bank, whereas 83% are still interest-based banks. Regrettably, two countries (Turkmenistan and Uzbekistan) do not have any tools of Islamic monetary policy. This paper also finds that though 64% of Islamic banks were established during 1970-2000 periods in 27 countries, only 25% of countries prepared Islamic banking regulation at this period. On the other hand, 75% of Islamic banking regulations were made during 2000-2015 periods. Most common Islamic monetary instruments are project-based Sukuk, project-based debt instruments, etc. Finally, this paper recommends six steps to enhance the Islamization process.

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Section: Literature Reviewmentioning

confidence: 99%

Islamization of Monetary Policy of 27 OIC Muslim Countries in Asia: The Successes, The Barriers and The Future Directions

Hossain

2020

GReviewIEB

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“…Islamic banking emerged as a parallel financial system to conventional banking system in 1970s with an aim to serve the Muslim customers banking needs across the world (Alharbi, 2015;Khattak, 2010). Islamic banking is the system that offers an interest free banking to customers, thus facilitating Muslims to comply with their religious obligations while fulfilling their banking needs (Khattak, 2010).…”

Section: Impediments To Access Banking Servicesmentioning

confidence: 99%

“…Thus, any bank labeling itself as Islamic bank must focus on business risk based profit and loss sharing deposits and business transactions with their customers (Abraham, 2010;Lodhi & Kalim, 2005). The international infrastructure Islamic bank (i.e., Islamic development Bank) was established in 1970s (Alharbi, 2015). Meezan bank was the first Islamic bank that started its operations in Pakistan in 2002 (Ahmad & Baloch, 2006).…”

Section: Introductionmentioning

confidence: 99%

Exploring the Impediments Faced by the Banking Customers to Adopt Islamic Banking Services in Pakistan

Yaseen¹,

Kamran²

2019

J. Islam. bus. manag.

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“…In the year 1998, the United Bank of Kuwait (UKB) offered Ijarah Wa Iqtina (leasing and acquisition) Islamic financing product in the United States. The product involves a net residential lease to own a house (Alharbi, 2015). Apart from the foreign bank that operates Islamic home finance in the United States, the American based Devan Bank is the dominant player in Islamic home financing (Ranzini, 2007).…”

Section: Overview Of Islamic Home Financing In the United Statesmentioning

confidence: 99%

The Influence of Interest Rates on Rental Rate in the United States Islamic Home Financing

Salihu¹,

2018

IJET

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The purpose of this paper is to investigate, whether the rental rate is free from the influence of interest rates on Islamic home financing. The study considers some selected macroeconomic variables to analyze the influence of interest rates on the rental rate. The study focuses on the United States data covering from the first quarter of 1990 to the last quarter of 2016. The study adopts Autoregressive distributed lags (ARDL) model to analyze the long-run and short-run relationships between the rental rate and the macroeconomic variables. The study finds consistent evidence that rental rate is free from the influence of short term and long term interest rates in both long-run equilibrium and short-run dynamic results in the United States Islamic home financing. Hence, the rental rate could be accepted as an alternative to interest rates in Islamic home financing. The result contributes towards finding that the rental rate is free from the influence of interest rate in Islamic home financing. To the best of the author’s knowledge, the present study is the first of its kind which empirically investigates the influence of interest rates on the rental rate in Islamic home financing.

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Development of the Islamic Banking System

Cited by 54 publications

References 1 publication

Islamization of Monetary Policy of 27 OIC Muslim Countries in Asia: The Successes, The Barriers and The Future Directions

Islamization of Monetary Policy of 27 OIC Muslim Countries in Asia: The Successes, The Barriers and The Future Directions

Exploring the Impediments Faced by the Banking Customers to Adopt Islamic Banking Services in Pakistan

The Influence of Interest Rates on Rental Rate in the United States Islamic Home Financing

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