Successful development of Islamic Banks

Abstract EN

The Islamic banking system is currently spreading fast through many Arab and Muslim countries.

The success of this new system is indicated by the rapid growth in number of banks, branches, accounts, and sums of money it handles.

This enormous success has caused some Western style commercial banks, in Sudan for example, to consider changing to the Islamic banking system.

It is also drawing the attention of the governments of some Muslim countries to seriously supporting the system.

Although the main reason for these successes is believed to be the Islamic beliefs of the people of these countries, an empirical study conducted with the customers of Faisal Islamic Bank of Sudan (FIBS) identifies other more important and entirely non-religious factors.

Surprisingly these factors not only focus on the reasons for the current success of Islamic banks but also highlight the dangers that future operations of the Islamic banking system might encounter.

This paper presents these factors and discusses their managerial implications to the successful development of Islamic banks.

A brief summary of the principles and operations of Islamic banks is presented first.