Challenges Facing Islamic Banking

Posted: November 27th, 2013

Islamic Banking-Annotated Bibliography

Challenges Facing Islamic Banking



Manal AlNoaimi


ASSE 4311 – Learning Outcome Assessment III/BUSI

Dr. Emmanuel Okey Ntui

Islamic Banking-Annotated Bibliography

Iqbal, Z. & Mirakhor, A. (2000). Islamic banking (3 Ed.). Washington, DC: International Monetary Fund.

The authors of this book, Iqbal and Mirakhor, conducted research on the unique features of the Islamic Banking system. The research, carried out in the Islamic republic of Iran and Pakistan, centered on financial institutions their executives, representatives and authorities. The book discusses various unique issues in the Islamic banking systems that are different from the other banks like the prohibition of interest rates, the different forms of transactions encountered and the banking system itself. The differences of the systems in both countries are also discussed. The methods utilized included conducting interviews with various businesspersons, as well as integrating data from various focus groups involved in the banking sector in the two nations. The results yielded information that was then translated into a discussion on transitional issues, asset concentrations and various other issues that shed light on the Islamic banking system. The book also covers various issues about Islamic banking, in addition to how these issues are different from the normal systems of banking. The global economic crisis effect on the both the Islamic banks and the conventional ones is discussed.

El Tiby, A. A. M. (2011). Islamic Banking: How to Manage Risk and Improve Profitability. New York, NY: John Wiley and Sons.

The book discusses the Islamic finance and the Islamic banking. El Tiby discusses perfectly in the book the issues pertaining to the entire Islamic finance sector. The book acts as a reference document to the professionals seeking reference and an introduction to the topic for the non-professionals. A thorough knowledge of the theory and the practical of the Islamic banking sector are discussed at length. Based on information obtained from methods that incorporated surveys and literature searches, the author was able to provide a direct assessment of the topic at hand. Some of the results that were obtained were sufficient in aiding the author to provide details on the history, origin and the most modern developments of these banking and financial systems. Compared to Iqbal, El Tiby portrays a certain level of major understanding of the topic. The book answers questions on the existing regulatory framework for the Islamic banks and if it is sufficient enough to ensure safe banking practices, face any risks and prevent the risks. The relationship between the banking regulators for both types of banks is discussed. The book closes while discussing the challenges that are faced by the Islamic banks and the oppressive regulatory procedures that they face.

Saeed, A. (1996). Islamic banking and interest: a study of the prohibition of riba and its contemporary interpretation. New York NY: BRILL.

Saeed discusses Islamic banking, although on a descriptive point of view rather than a critical one. He discusses various terms as used in the system such as ‘riba’, ‘musharaka’ that mean interest and the sharing of profits and losses respectively. The terms are also discussed as they relate to Islamic Banking. To achieve this goal, the author used methods such as literature searches in order to obtain data that were relevant to the topic at hand. The development of the Islamic banks is also discussed. The author addresses the main objective of his study as the assessment of the ‘riba’ in Islamic banking as it is the core of the system. The study has its research relating to the theorists in banking, bankers and publications by Islamic banks. It was a general inference from the results that ‘riba’ did indeed form the basis of the structures of Islamic banking, as majority of bankers could not go against their doctrines even for the sake of financial gain. The book discusses the Muslim culture in relation to the banking process, in addition to how the two are mutually related.

Al-Omar, F. & Abdel-Haq, M. (1996). Islamic banking: theory, practice, and challenges. Baltimore, MD: Zed Books. The book discusses how the challenges encountered by Islamic banks can be mitigated. These challenges are the problems that banks encounter in trying to meet the requirements that the Islamic world demands in banking services. Al-Omar and Abdel-Haq conduct an investigation on the way in which Islamic banks conduct their operations in different environments. The different environments include financial, social, economic, religious and legal ones. Among the methods utilized, include literature searches and a survey of situations encountered, the matters that arise, the basic principles and the problems that are often encountered. The authors get their information from studies conducted in cities like Jordan, London, Malaysia, Turkey and Pakistan about Islamic Banking. Complex concepts concerning Islamic banking are discussed and the reader is helped to understand them, in addition to how they relate to the financial instruments. Other results that form a basis of discussion include the relationship between Islamic banks and the central banks, their roles in the context of development and their relevance. The book is a good read on the subject for the purpose of information.

Lewis, M. & Algaoud, L. M. (2001). Islamic banking. Northampton, MA: Edward Elgar.

Lewis and Algaoud differentiate their book from any other that discusses the Islamic banking by including the discussion of corporate governance analysis and modern intermediation in Islamic banking. By incorporating information obtained from data analysis, focus groups and interviews of various banking stakeholders, the book also discusses complicated concepts of Islamic banking without complicating them further with mathematical calculations. The book can be used even in an elementary stage to understand the concepts of Islamic banking due to its simple language. From the results that were obtained, a comprehensive discussion on Islamic banking was made and therefore a read of it would provide most of the information one seeks and answer most of their questions. The book also contains case studies that are obtained from Islamic systems of banking and from mixed ones. The development, history and special features of the system of banking are also thoroughly theoretically discussed in the book.

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