What are five main issues should be taken into consideration to boost the development of Islamic Banking and Finance today?
Regulatory, product development, shariah compliance, human resource, etc...
Following article discusses on Islamic banking in the context of social priorities...
Hasan, Z. (2004). Measuring efficiency of Islamic banks: criteria, methods, and social priorities.
Another discusses on broader corporate governance model that identifies the issues and priorities of stakeholders …
Platonova, E., Asutay, M., Dixon, R., & Mohammad, S. (2018). The impact of corporate social responsibility disclosure on financial performance: Evidence from the GCC Islamic banking sector. Journal of Business Ethics, 151(2), 451-471.
In matter of fact, due to the restrictions of Shariah banks can not cover the risk of Exchange fluctuation by forward contract as Forward Booking is not permitted by Shariah. As per Shariah, currency, transaction is to be made under certain terms and conditions laid down for “sarf” by Shariah, such as spot possession of both the currencies by both the parties which is not available in forward Booking. It is also prohibited to deal in the forward money market even if the purpose is hedging to avoid loss of profit on a particular transaction effected in a currency whose value is expected to be declined. This problem requires a solution by Shariah experts.
Compliances, external factors (kode etik/law, environment, competitors, disaster, government ), internal factors ( management, loyality, standar mutu untuk berjalannya prosedur masing-masing bank syariah).
1. In my opinion, the first priority is educating the masses about conventional banking products in comparison with Islamic banking (Shariah-compliant) products, clearing their doubts and wrong perceptions (of back end procedures and mechanisms staying the same and there is only change in name of a particular product)
2.Gain support from government and regulatory authorities
3. Develop innovative, competitive and customer-friendly products supporting high penetration and financial inclusion. (an investment or banking product that is understandable to a layman, different and better from conventional counterparts
4. Make use of the technology (trends in Blockchain & cryptography)
5. Compliance with Local and International Standards