Shariah Compliant Model of Islamic Banking

16 Pages Posted: 27 Jan 2021

See all articles by Imran Hussain Minhas

Imran Hussain Minhas

Securities and Exchange Commission of Pakistan; Islamic International University

Date Written: November 17, 2020


Purpose – The purpose of this paper is to assess perception of the stakeholders about Islamic banking and find out approaches to make it closer to the Shari’ah.

Methodology – The paper adopts direct survey approach to find out perception of stakeholders about the Islamic banking. The survey results have been evaluated using Ordinary Least Square method.

Findings – The paper reveals that respondents have negative perception about the present form of Islamic banking due to multiple similarities in conventional and Islamic banking products and operations. The respondents supported the idea of different model of Islamic banking.
Research limitations – The study relies solely on the opinion of limited number of respondents, living in few major cities of Pakistan. It does not provide any empirical evidence for the proposed model of Islamic banking.

Practical Implications – Riba is significantly condemned and prohibited in Islam. Therefore, avoiding riba in all business transactions is very important for our faith. Islamic world has started practicing banking under the branding of Islam which has approval of a large group of Islamic scholars but still there is no consensus. This paper helps in addressing perception issues and suggests a future direction of Islamic banking for the regulators.

Originality – Many researchers have questioned the Shariah compliance and perception issues of Islamic Banking but most of them have suggested only awareness programs. This research proposes a new model for Islamic banking which has not been witnessed in any other research.

Keywords: Islamic Banking and Finance, Islamic Capital Market, Perception, Criticism, Islamic Banking Regulations, Regulator, New Model of Islamic Banking.

JEL Classification: G21, G23, G24, G38

Suggested Citation

Minhas, Imran, Shariah Compliant Model of Islamic Banking (November 17, 2020). Journal of Islamic Banking and Finance - Asia - Vol. 37, No. 3, 2020 , Available at SSRN:

Imran Minhas (Contact Author)

Securities and Exchange Commission of Pakistan ( email )

National Insurance Corporation Building
Jinnah Avenue
Islamabad, 44000


Islamic International University ( email )

Islamabad, 44000


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