Shariah Governance Systems of Islamic Banks in Bangladesh

Abstract

This chapter explores the Shariah Governance (SG) of Islamic banks in Bangladesh as compared to global SG practices. Applying semi-structured face-to-face interviews, this study finds that Bangladesh is not far behind the global SG system. Most of the countries have enacted Islamic banking regulations, but Bangladesh does not have any separate banking legislation for Islamic banks. Islamic banks are working on their own instead of centralized functioning under the regulations of the central bank. Islamic banks in Bangladesh are mainly dominated by the ‘buy and sell mode' which is diminishing the real sense of Islamic finance. Islamic banks are not practicing true Islamic banking because of the predetermined profit rate and violation of the Shariah principles. But the central bank has accepted it due to social demands and people's expectations. The corporate social responsibility functions are broader and more focused in Bangladesh as compared to global practices.