Legal and Regulatory Frameworks For Sharī’a Governance Practices in the Islamic Banking Industry of Bangladesh

Abstract

This paper aims to explore the regulatory arrangements for sharī’a governance practices in the Islamic banking industry of Bangladesh and to identify the issues and challenges faced in this regard. Despite notable advancements, the necessity for a more robust regulatory framework, separate from the modified Banking Companies Act of 1991, which currently integrates Islamic banking regulations, remains apparent. A conspicuous challenge lies in the lack of a dedicated department within Bangladesh Bank responsible for overseeing Islamic banking activities. The article suggests an independent government-supervised Sharī’a board. This study enhances Bangladesh's Islamic banking regulation and promotes an understanding of sharī’a governance. The research is based on the review of existing literature but lacks empirical evidence. It has been stated in previous studies that a survey method can be used to examine real scenarios. This paper discusses the effectiveness of the Islamic Law Rules in the current practices of Islamic banks in Bangladesh, shedding light on their deficiencies.