CHALLENGES OF ADOPTING ISLAMIC FINANCE WITHIN CONVENTIONAL BANKING SYSTEMS
DOI:
https://doi.org/10.5281/zenodo.18278026Keywords:
islamic finance, commercial banks, Islamic finance compliance, Islamic banking products, dual banking system.Abstract
The growing interest in ethical and alternative financial models has increased the relevance of Islamic finance
within commercial banking systems. This article examines the key issues associated with the implementation of Islamic
finance products in commercial banking practice. Using a qualitative analytical approach, the study explores institutional,
regulatory, and operational challenges that influence product adoption and performance. The findings indicate that
commercial banks tend to prioritize Islamic finance instruments that closely align with conventional banking structures,
while risk-sharing products remain limited in practice.
References
Chapra, M. U. Islam and the Economic Challenge. Leicester: Islamic Foundation, 1992.
Beck, T., Demirgüç-Kunt, A., & Merrouche, O. “Islamic vs. Conventional Banking: Business Model, Efficiency and
Stability.” Journal of Banking & Finance, 2013, 37(2), pp. 433–447.
Khan, M., & Mirakhor, A. Theoretical Studies in Islamic Banking and Finance. Houston: Institute for Research and
Islamic Studies, 1987.
Aggarwal, R., & Yousef, T. “Islamic Banks and Investment Financing.” Journal of Money, Credit and Banking, 2000,
(1), pp. 93–120. [5] Hasan, M., & Dridi, J. “The Effects of the Global Crisis on Islamic and Conventional Banks.” IMF
Working Paper, No. 10/2010.
Čihák, M., & Hesse, H. “Islamic Banks and Financial Stability.” IMF Working Paper, No. 08/16, 2008.
Sundararajan, V., & Errico, L. “Islamic Financial Institutions and Products in the Global Financial System.” IMF Working
Paper, No. 02/192, 2002.
Iqbal, Z., & Mirakhor, A. An Introduction to Islamic Finance: Theory and Practice. Singapore: Wiley, 2011.
Islamic Financial Services Board. Guiding Principles on Risk Management for Institutions Offering Islamic Financial
Services. Kuala Lumpur, 2005.
Archer, S., & Karim, R. A. A. Islamic Finance: The Regulatory Challenge. Singapore: Wiley, 2007.
