Islamic Banking in Pakistan: A Critical Analysis
AbstractIslamic banking in Pakistan has completed one decade of operations in Pakistan and now there are 5 full-fledged Islamic banks and more than 15 conventional banks with Islamic banking windows. Due to the consistent double digit growth in total assets, the market share had steadily risen to 7% by the end of 2011. However, meaningful assessment of Islamic banking requires looking at how far they have contributed to uphold Islamic principles, values and bringing about or at least working towards equitable distribution of income. But, Islamic banking industry continues to use debt based financing modes which are priced using KIBOR as the benchmark. Equivalence of means test confirms that Islamic banking spreads are higher than conventional interest rate spreads. The paper analyzes the Islamic banking philosophy, principles and practices and identifies the shortcomings which need attention of Islamic scholars as well as the regulators.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42497.
Date of creation: 31 Jul 2012
Date of revision:
Islamic Finance; Islamic Banking; Takaful; Murabaha; Ijarah; Mudarabah; Musharakah; Salam; Istisna;
Find related papers by JEL classification:
- A1 - General Economics and Teaching - - General Economics
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
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- Imran Tahir & Mark Brimble, 2011. "Islamic investment behaviour," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 4(2), pages 116-130, June.
- Adel Ahmed, 2010. "Global financial crisis: an Islamic finance perspective," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 3(4), pages 306-320, November.
- Abbas Mirakhor & Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 91/88, International Monetary Fund.
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