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Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations

Shariah Governance Framework (SGF) is a structural process by which Islamic banks monitor, control and conduct their activities. This study describes the overall scenery of SGF of Islamic banks in Bangladesh. The paper also reviews the current practices, problems, legal and regulatory issues by usin...

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Main Authors: Alam, Md. Kausar, Ab Rahman, Suhaimi, Mustafa, Hasri, Mohammed Shah, Sabarina, Hossain, Md Shamim
Format: Article
Language:English
Published: Asian Economic and Social Society 2019
Online Access:http://psasir.upm.edu.my/id/eprint/82103/1/Shariah%20governance%20.pdf
http://psasir.upm.edu.my/id/eprint/82103/
http://www.aessweb.com/journals/January2019/5002/4472
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spelling my.upm.eprints.821032021-09-08T10:16:08Z http://psasir.upm.edu.my/id/eprint/82103/ Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations Alam, Md. Kausar Ab Rahman, Suhaimi Mustafa, Hasri Mohammed Shah, Sabarina Hossain, Md Shamim Shariah Governance Framework (SGF) is a structural process by which Islamic banks monitor, control and conduct their activities. This study describes the overall scenery of SGF of Islamic banks in Bangladesh. The paper also reviews the current practices, problems, legal and regulatory issues by using a deductive procedure and provides some propositions for the enhancement of SGF. The main objective of this paper is to understand the SGF, its current practices, problems and challenges which will be helpful to develop a SGF for Islamic banks in future. The study reveals that the Shariah governance system in Bangladesh is mainly voluntary rather than regulatory and there is an absence of full-fledged SGF. It seems that the Board of Directors (BOD) uses the Shariah Supervisory Board (SSB) in accomplishing their objectives and responsible for overall Shariah activities rather than the SSB. In order to improve the SGF, Bangladesh government should enact a law for the operations of Islamic banks. Besides, Bangladesh Bank (BB) should come out with a comprehensive Centralized SGF by outlining the roles, powers, and functions of all stakeholders to ensure the accountability of their works and improve the quality of the Shariah compliance. Moreover, the central bank can set up a Central Shariah Supervisory Board (CSSB) in its head office or can recognize existing Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) along with power so that they can supervise and monitor overall activities of Islamic banks and solve the disputes among the stakeholders regarding the Shariah issues of Islamic banks. Asian Economic and Social Society 2019 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/82103/1/Shariah%20governance%20.pdf Alam, Md. Kausar and Ab Rahman, Suhaimi and Mustafa, Hasri and Mohammed Shah, Sabarina and Hossain, Md Shamim (2019) Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations. Asian Economic and Financial Review, 9 (1). pp. 118-132. ISSN 2305-2147; ESSN: 2222-6737 http://www.aessweb.com/journals/January2019/5002/4472 10.18488/journal.aefr.2019.91.118.132
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Shariah Governance Framework (SGF) is a structural process by which Islamic banks monitor, control and conduct their activities. This study describes the overall scenery of SGF of Islamic banks in Bangladesh. The paper also reviews the current practices, problems, legal and regulatory issues by using a deductive procedure and provides some propositions for the enhancement of SGF. The main objective of this paper is to understand the SGF, its current practices, problems and challenges which will be helpful to develop a SGF for Islamic banks in future. The study reveals that the Shariah governance system in Bangladesh is mainly voluntary rather than regulatory and there is an absence of full-fledged SGF. It seems that the Board of Directors (BOD) uses the Shariah Supervisory Board (SSB) in accomplishing their objectives and responsible for overall Shariah activities rather than the SSB. In order to improve the SGF, Bangladesh government should enact a law for the operations of Islamic banks. Besides, Bangladesh Bank (BB) should come out with a comprehensive Centralized SGF by outlining the roles, powers, and functions of all stakeholders to ensure the accountability of their works and improve the quality of the Shariah compliance. Moreover, the central bank can set up a Central Shariah Supervisory Board (CSSB) in its head office or can recognize existing Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) along with power so that they can supervise and monitor overall activities of Islamic banks and solve the disputes among the stakeholders regarding the Shariah issues of Islamic banks.
format Article
author Alam, Md. Kausar
Ab Rahman, Suhaimi
Mustafa, Hasri
Mohammed Shah, Sabarina
Hossain, Md Shamim
spellingShingle Alam, Md. Kausar
Ab Rahman, Suhaimi
Mustafa, Hasri
Mohammed Shah, Sabarina
Hossain, Md Shamim
Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations
author_facet Alam, Md. Kausar
Ab Rahman, Suhaimi
Mustafa, Hasri
Mohammed Shah, Sabarina
Hossain, Md Shamim
author_sort Alam, Md. Kausar
title Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations
title_short Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations
title_full Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations
title_fullStr Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations
title_full_unstemmed Shariah governance framework of Islamic banks in Bangladesh: practices, problems and recommendations
title_sort shariah governance framework of islamic banks in bangladesh: practices, problems and recommendations
publisher Asian Economic and Social Society
publishDate 2019
url http://psasir.upm.edu.my/id/eprint/82103/1/Shariah%20governance%20.pdf
http://psasir.upm.edu.my/id/eprint/82103/
http://www.aessweb.com/journals/January2019/5002/4472
_version_ 1710677156146708480
score 13.211869

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