Islamic Finance
Identifier
A
A strategic design of Islamic banking regulations
A set of prudential regulations are essential for the sound operation of the Islamic banking system. Such regulations should not just protect and promote fundamentals of Islamic banking. They should also bridge the gap between the Islamic and the conventional banking systems. The two systems have a lot in common. This makes it easier to apply some principles of conventional banking supervision to Islamic banks. While devising the regulatory framework for Islamic banks, regulators must also recognize the difference between the theory and practice of Islamic banking.