Tag: Financial Inclusion

Islamic Banking: Looking Beyond Shariah Compliance

The awareness sessions conducted by banks focus on the prohibition of Riba, justified by Qur’anic verses and Ahadith, and explain how Islamic banks avoid it in their operations. This fosters a sense of religious superiority among those who begin to assume that the inherent beauty of the faith renders Islamic banking nearly flawless. Consequently, there is a growing belief that the employees of Islamic banks are more truthful, empathetic, and attentive to inquiries than those of mainstream banks. However, upon becoming customers of Islamic banks, they often observe that interactions with Islamic banking personnel at the front end are nearly identical to those with employees of conventional banks.

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Islamic Financial Inclusion and Economic Growth in OIC Countries: Panel Quantile Regression Analysis

The authors argue that by expanding the network of Islamic banks and enhancing the technological infrastructure for financial access, policymakers can harness the transformative potential of Islamic finance to promote sustainable economic growth and development in the OIC countries. The authors urge policymakers to prioritize initiatives aimed at expanding the network of Islamic banks and enhancing technological infrastructure for financial access.

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Issuing Licenses for Digital Banking to Conventional Financial Institutions

It is suggested that the SBP makes amendments in the Digital Banking License Framework so that only Islamic licenses will be issued. This will ensure that future digital banks that are established in the country also operate under Islamic banking principles. Deposits in Islamic banking have grown more swiftly than in conventional banking. Hence, it is in the best interest of any new player in this market segment to offer Shari’ah compliant financial services than otherwise.

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