Abstract
The growing awareness of the systemic importance of Islamic banking and finance to the development has prepared the ground for the work of upgrading the existing Islamic banking practices. Hence, this study aims to evaluate the Islamic Financial Management (IFM) practices of Islamic banks in Bangladesh. In line with the objective of the study, several ratio analyses were conducted based on ANNOVA test and the sample size includes 8 Islamic banks from 2007 to 2013.The findings revealed that the Islamic banks in Bangladesh are homogenous; however, they are not financially healthy when liquidity measurements are concerned. Additionally, capital structure efficiency results revealed that most of the Islamic Banks in Bangladesh are practicing debt-based financing rather than equity. While the study has observed that the practices of IFM in Bangladesh are promising, however, there are numerous challenges encroaching the industry. Hence, immediate attention from the respective authorities, including practitioners and policy makers are indeed vital.
Highlights
In the recent era, Islamic banking and finance becomes an important topic both in the academic literature and among practitioners since it represents a new reality to the conventional banking practices (Sundararajan &Errico, 2002; Khan & Ahmed, 2001)
This indicates that working capital management of Islamic banks in Bangladesh is not at the optimum level if conventional parameters are considered
The findings show that the average debt ratios over the period of 2007 to 2013 of ArafahIslami Bank Limited (AAIBL), Export Import Bank of Bangladesh Limited (EXIM), Islami Bank Bangladesh Limited (IBBL), First Security Islami Bank Limited (FSIBL), SIBL, ShahjalalIslami Bank Limited (SJIBL), and ICB Islami Bank Limited (ICBIBL) banks are 85%, 91%, 94%, 94%, 89%, 92% and 118% respectively
Summary
Vol 3, No 1; 2019 global integration of financial markets, and the introduction of innovative and new Islamic financial products. Mohiuddin (2004) identified ten important constrains related to Islamic banking and finance concept and its practices in the global arena Among these constrains, absence of Islamic administration in the state level, scarcity of research outcomes on Islamic management, lack of research-based publications, lack of integration of Islamic banking and finance curricula at the university level, lack of ideal Islamic banking and finance organizations, and almost no effort to combine the conventional and Islamic management. 795), Imam Ahmad ibn Hambal (778-855) and al-Shafil (767-820) during this phase The views of these jurists, on Muamalat, have been used as a reference for taking any decision pertaining to Islamic financial activities. After the second phase, the revolutionary modern era of banking and finance has started (Sudin&Nursofiza, 2009) In this era, the first Islamic financial institution has been established in the Indian subcontinent during the. The list of Islamic banks in different countries with establishment year is in the following Table 1
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