DefinePK

Abstract

Purpose – This study takes the insight of all the stakeholders on how and when the banking system of Pakistan can be converted into full-fledged Islamic one?
Design / Methodology / Approach – Qualitative Research Methodology is used for this study. For the data collection, “Open-Ended Questions” were designed, semi-structured Interviews were conducted with banking experts (including Islamic), regulators, lawyers, shariah scholars and relevant persons from the academia.  A total of 30 interviewees were contacted, out of which twenty-three (23) out of 30 were interviewed. The data was managed and analyzed by using the Content Analysis Technique.
Practical / Research Implications – This study will be definitely beneficial for all the stakeholders, policymakers, and researchers of the financial system. It will help them in understanding the actual challenges of the conversion process and their solutions, in making new policies regarding Islamic banking and finance, and in the implementation of those policies.
Finding – The study reveals that there are a lot of problems and hurdles in the conversion of the Banking System of Pakistan into an Islamic one. In the past, the most influential hurdles were the lack of combined efforts of governments, constitutional and regulatory bodies, judiciary, bureaucracy, elites, and financial monopolies. However, after the decision of the Federal Shariaht Court of Pakistan, the State Bank and Securities and Exchange Commission of Pakistan have demanded proposal from all the banks regarding their conversion plans.
Originality / Value – Although there are several researches about the challenges of Islamic banks in Pakistan but as per the researchers’ knowledge, there is lack of a comprehensive study that discusses as to how can the banking system of Pakistan be converted into Islamic one and when can it be made possible.
Keywords:, Banking system, Conversion Conventional banking, Islamic Banking, Pakistan