An assessment of standard regulatory framework for Islamic Banking System in Bangladesh
Keywords:
Regulatory framework, Operation of Islamic banking (OIB), Bank Control Law (BCL), Profit-Loss Sharing (PLS)Abstract
Regulatory framework for Islamic banking system has been theoretically explored in the existing literature in different parts of Muslim countries including Bangladesh. Islamic banking has been growing in Bangladesh since few decades ago. Scholarly researches have investigated different theoretic bases for the operation of Islamic baking in the country. However, theoretical assumptions are no longer viable or sufficient in establishing standard regulatory framework for Islamic banking system in predominant Muslim countries. This paper primarily aims at assessing Quantitative research method was employed. The population comprised promoters of Islamic banking. As regards to sample, the researcher used convenient sampling technique in distributing 180 survey questionnaires online to the promoters of Islamic banking system in Bangladesh in order to collect data for this research. Descriptive statistics by using frequencies, percentage, means and standard deviations were used via Statistical Package for Social Science (SPSS) version 16.0 for data analysis. Three factors of standard regulatory framework (SRF) (i.e. Operation of Islamic banking (OIB), Bank Control Law (BCL); Profit-Loss Sharing (PLS) were assessed in this study. The findings showed that the majority of the respondents strongly agreed with underlining indicators (i.e. OIB, BCL and PLS) of standard regulatory framework in the context of Bangladesh. In conclusion, the three identified factors of regulatory framework could complement the existing regulations in Bangladesh. It is therefore recommended that the country should expand the scope of regulatory framework by exploring the regulatory framework being provided in countries like Saudi Arabia and Malaysia in order to effectively standardise it in the country.
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