An Empirical Study of Shari'ah Compliance in Islamic Banks of Pakistan
Keywords:Shari'ah compliance, Islamic banks, Islamic finance industry
The study is aimed to find out the need of Shariâ€™ah compliance in general and specifically in Islamic banking. It is also to identify the loop holes in the existing Shariâ€™ah compliance system and to recommend some measures to remove Shariâ€™ah non-compliance in Islamic banks in Pakistan. The study is based on both primary and secondary material. Primary data is gathered through a survey and personal interviews with the Islamic banking experts, employees and researchers. This study is based on descriptive method, related testing tools like weighted average, standard deviation and variance. These methods are applied to ensure the reliability of data and research. Shariâ€™ah compliance is regarded as the foundation of the Islamic banking. Though Islamic banks give priority on Shariâ€™ah compliance, a number of factors hinder Shariâ€™ah compliance. Shariâ€™ah knowledge, efforts, and seriousness of the bank authorities and bank employees are the prerequisites for complying appropriately with Shariâ€™ah. Regulatory bodies, executives, and employees of Islamic finance industry are expected to get the idea of the present situation of Shariâ€™ah compliance and to identify their weaknesses. Clients are expected to get guidelines to choose and study Islamic banking products in a better way. The researchers are expected to find new issues and get a more comprehensive statistical and analytical study regarding Shariâ€™ah compliance in Islamic banking which was not done so far.
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