Fees and demand the key to sustainability

Despite the establishment of dedicated global Islamic banking units by J.P. Morgan Chase and Deutsche Bank, considerable apprehension exists that the promise of Islamic banking is not being fulfilled. Instead of quality investment and deal flows, product innovation, and financial reforms, there is a perceived lack of product innovation, capital flows, regulatory bureaucracy, and quality deal flows. At least two law firms in London have cut back drastically. Another target of blame is the failure of Muslim countries to open up their financial service markets and enact needed reforms. Still another is the exorbitant fee structure for documentation, custodial services for funds, accounting and auditing, consultancy, and market research. Registration rules in major locations are blamed for discouraging asset-management deals. There are indications that much marketing is done without going through the regulatory requirements. It is suggested that stock be taken of fee structures and