An Analysis of the Islamic and Conventional Banking Regulatory Bodies and Legislation in Thailand

Abstract

An Analysis of the Islamic and Conventional Banking Regulatory Bodies and Legislation in Thailand Asma Sitthivanich, Dr Rusni Hassan Abstract Islamic banking in Thailand is offered in the form of specialised financial institutions (SFIs) with the Islamic Bank of Thailand (iBank) as the only full-fledged Islamic bank. This research is carried out in the form of a documentary research with the purpose of examining the regulatory environment that the Islamic banking operates in and to provide solutions or recommendations to improve the current operational limitations. It was found that operating in the form of an SFI under close government monitoring and a restrictive operational structure, limits the bank’s true potential, as the objective is to serve the government as its economic tool without being commercialised or maximising profit. Thus, the iBank can be taken out of the SFIs and treated as a commercial bank. An iBank-specific act and the applicable laws need to be amended to be supportive of Islamic banking’s unique operational mechanisms. Furthermore, a centralised shariah advisory body should be constituted to provide a standard for Islamic banking in Thailand. These would facilitate the provision of Islamic banking services. Hence, competition among Islamic banking service providers will be created, and subsequently, the efficiency and growth of Islamic banking and the financial industry in Thailand will improve. Full Text: PDF DOI: 10.15640/jibf.v5n2a9