Model Proposal for Islamic Supervisory Boards in Financial Institutions
Journal Title: International Journal of Academic Research in Business and Social Sciences - Year 2016, Vol 6, Issue 1
Abstract
Islamic finance is a sector with growth potential. Muslims with religious sensitivity have started to bring their savings which used to be idle into the economy through the participatory banking, trusting them operating in compliance with Islamic principles. They prefer participatory banks over the conventional ones because of their religious values. It is critical not to lose the trust of customers in Islamic finance sector. For this reason, existence of Islamic Supervisory Boards (ISB) which make sure that the participatory banks operate in compliance with Sharia rules. In order for these boards to work independently and efficiently, the overall framework and standards must be developed. Moreover, for the ISB decisions to be consistent and supervisions to be accurate, existence of a national board is important in terms of reliability of the sector. The objective of this thesis is to address the functions and roles of the supervisory boards with the examples in the world and provide suggestions towards the general framework of an ISB model appropriate for the participatory banks in Turkey. This model is developed considering the social, economic, and judicial environment of Turkey and similar applications in the world. As a result of the evaluation of surveys and available sources within the methodology used in this study, it is concluded that the ISBs of the participatory banks in the country are not influential enough in the product development and other corporate processes, the reports are not being published so the system is not transparent enough. This in return, supports the validity of the hypothesis provided at the start of the study.
Authors and Affiliations
Lale Sagbansua, Kursat Yalciner
Keywords
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- EP ID EP183689
- DOI 10.6007/IJARBSS/v6-i1/1990
- Views 152
- Downloads 0
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