Abstract
Studies suggest several issues and challenges of financial management practices in Islamic banks and insurance companies and Islamic non-bank financial institutions (INBFIs) in Bangladesh. The purpose of the research is to examine the issues and challenges of Islamic Financial Management (IFM) from an empirical perspective. The study relies on a structured questionnaire survey in prominent Islamic financial institutions (IFIs) of Bangladesh for achieving its objective. After confirming data reliability based on Cronbach's alpha, the study proceeds to analyse by applying descriptive statistics and principal component factor analysis using correlation, Kaiser-Meyer-Olkin (KMO) and Bartlett's Test and VARIMAX Rotation. The study finds that there is no separate regulatory framework to supervise and monitor IFIs in Bangladesh rather the central bank regulates the Islamic financial system based on the existing laws and regulations of the conventional financial system. The findings of this study suggest that the government should establish a separate regulatory body for monitoring the IFI’s functions so that they can perform their activities smoothly in the congenial environment in Bangladesh.
 JEL Classification Codes: G10, G21, G23.
Highlights
The Islamic Financial Management (IFM) is the application of Shariah (Islamic law) to banking, insurance, and non-bank financial institutions (Khan, 2007)
The findings of this study suggest that the government should establish a separate regulatory body for monitoring the Islamic financial institutions (IFIs)’s functions so that they can perform their activities smoothly in the congenial environment in Bangladesh
Since the Islamic financial industry of Bangladesh is growing markedly, the empirical investigation on the issues and challenges of IFM practices faced by Islamic banks, Islamic insurance companies and Islamic non-bank financial institutions (INBFIs) in Bangladesh is the demand of time to help policymakers to take policies inappropriate directions
Summary
Financial Management (IFM) from an empirical perspective. The study relies on a structured questionnaire survey in prominent Islamic financial institutions (IFIs) of Bangladesh for achieving its objective. After confirming data reliability based on Cronbach's alpha, the study proceeds to analyse by applying descriptive statistics and principal component factor analysis using correlation, Kaiser-Meyer-Olkin (KMO) and Bartlett's Test and VARIMAX Rotation. The study finds that there is no separate regulatory framework to supervise and monitor IFIs in Bangladesh rather the central bank regulates the Islamic financial system based on the existing laws and regulations of the conventional financial system. The findings of this study suggest that the government should establish a separate regulatory body for monitoring the IFI’s functions so that they can perform their activities smoothly in the congenial environment in Bangladesh.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have