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Problems and challenges facing the Islamic banking system in the West: The case of the UK

Karbhari, Yusuf, Naser, Kamal and Shahin, Zerrin 2004. Problems and challenges facing the Islamic banking system in the West: The case of the UK. Thunderbird International Business Review 46 (5) , pp. 521-543. 10.1002/tie.20023

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This study investigates the main problems, challenges, and opportunities facing Islamic banking in the United Kingdom. The study reports the results of interviews that were undertaken with senior officials of several key financial institutions who have had many years of experience in dealing with Islamic banking. Our interviews revealed that, although by strict definition Islamic banks do not currently exist in the UK, London is one of the major centers for Islamic banking and finance. It is apparent that the experience of previously established Islamic institutions, such as Al-Baraka, has made other institutions realize that it is possible to provide Islamic banking services in the UK under nonbanking regulations. The interviews also revealed that the main problem that Islamic banking faces in the UK is heterogeneous clients and potential clients. Moreover, regulatory hurdles, competition from conventional banks, and lack of adequately qualified and trained personnel exacerbate the situation. The study concludes by identifying opportunities such as e-banking that may have a significant impact on the future of Islamic banking in the UK.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: B Philosophy. Psychology. Religion > BP Islam. Bahaism. Theosophy, etc
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
H Social Sciences > HT Communities. Classes. Races
Publisher: Wiley Blackwell
ISSN: 1096-4762
Last Modified: 10 Oct 2017 14:51

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