Operational Shariah Framework of Islamic Banking. A Research on Bangladesh Perspective

Abstract

This research examines the operational Shariah framework within the Islamic banking sector in Bangladesh, focusing on its effectiveness, challenges, and areas for enhancement in ensuring full compliance with Islamic financial principles. By employing a mixed-methods approach that integrates qualitative interviews with industry experts and quantitative analyses of banking performance metrics, the study offers a comprehensive evaluation of current Shariah governance practices, regulatory oversight, and operational procedures adopted by Islamic banks in the country. The findings will reveal that while significant progress has been made towards establishing a robust Shariah-compliant framework, inconsistencies in interpretation and application remain across institutions. Key challenges identified include regulatory ambiguities, a shortage of specialized Shariah advisory personnel, and difficulties in harmonizing traditional Islamic banking practices with modern financial technologies. These issues contribute to operational inefficiencies and potential risks that could undermine stakeholder confidence and the long-term viability of the sector. The study will conclude by recommending targeted policy reforms, enhanced capacity-building initiatives, and the development of standardized guidelines to ensure a more uniform application of Shariah principles across the industry. The insights provided are expected to assist policymakers, banking practitioners, and scholars in fostering a more resilient and competitive Islamic banking environment in Bangladesh, ultimately contributing to the broader goals of financial inclusion and ethical finance in emerging markets.