Variety in the Rules of Islamic Financial Institutions

Industry is believed to be constantly evolving with an estimated convergence of the practice of Islamic financial intermediation with its conceptual foundations. Consequently, the paper contrasts the risks and the regulations considered necessary in the case of the IFIs operating according to the core rules and current practice. Moreover, the paper deals with the implications of approaches to the capital adequacy, licensing requirements and reliance on MARKET discipline. This paper proposes an organization of the industry which would enable to expand in conformity with its principles and prudent risk management and ease its regulation.

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