Level of shariah compliance in the operation of Islamic banks in Bangladesh : an empirical study

الملخص EN

This paper has tried to assess the level of Shariah compliance in the operation of the Islamic Banks in Bangladesh.

The data were collected from questionnaire survey on 400 respondents from six Islamic banks regarding banking operations and from personal interview with bank officials & regulators of the banks in the month December 2019.

Other data were attained from different journals, books, Qur’an, Sunnah and the websites of the sample banks.

Descriptive statistics are used to analyze the data.

Although most of the Islamic banks have policy for shariah deposit, they offer fixed profit rate which is violation of shariah.

In case of investment, significant non-compliance is found in Musharakah contact although moderate level of compliance is found in Mudarabah, Ijarah and Quard Hasanah contracts.

Highest level of non-compliance is found in shariah based annual audit.

The underlying reasons for the non-compliance are the absence of mandatory Shariah guidelines, lack of Shariah scholarly officials, dual audit compliance, absence of penalties for non-compliance and some other external factors.

If the Central bank and other regulatory bodies are concerned enough to form a uniform guideline for all the Islamic banks operating in Bangladesh, it will be easier for the Islamic banks to comply with Shariah.

This is the sole study that deals with different areas of operations in the Islamic Banks to assess the shariah compliance.

It has incorporated both survey and interview findings to assess the real picture.