Islamic Bank Safety Net Issues: The Regulatory Challenges for Cross Border Islamic Banking Transactions

Keywords: Safety Net, Islamic Banking, Regulations, Cross Border Activities.


This paper aims to identify major regulatory challenges in the safety net for providing insurances to the depositors in the cross-border transaction over the world. The study found that Islamic banking is facing major challenges to issue appropriate rules and regulations for providing the right safety against the deposit of customers with a conventional counterpart base on the Islamic shariah principles. Especially in the area of “chartering or licensing function, prudential regulation and supervision, deposits in the central bank, intervention and resolution mechanisms and capital adequacy standard” for safety net issues of Islamic Bank. The study recommended that the policymakers need to pay heed in a deliberate and intentional way to solve the above regulatory issues to face the existing challenges for the smooth operation and bright prospect of the Islamic Banking sector in the future.

JEL Classification Codes: G21, G24, L26, P51.

Author Biographies

Abul Bashar Bhuiyan, University of Selangor

Associate Professor, Faculty of Business and Accountancy, University of Selangor, Shah Alam, Malaysia

Abdul Ghafar Ismail, Universiti Sains Islam Malaysia

Professor of Islamic Financial Economics, Universiti Sains Islam Malaysia, Malaysia

K. M. Anwarul Islam, University of Selangor

Associate Professor, Department of Business Administration, The Millennium University, Dhaka, Bangladesh, and PhD Candidate, University of Selangor, Malaysia

Abd Halim Mohd Noor, Universiti Technology Mara

Professor of Economics, Universiti Technology Mara (UiTM) Malaysia, Melaka, Malaysia

Mohammad Solaiman, Comilla University

Associate Professor, Department of Marketing, Comilla University, Cumilla. Bangladesh

Mohammad Abdur Rahman, Daffodil International University

Assistant Professor, School of Business Administration, Faculty of Business and Entrepreneurship, Daffodil International University, Dhaka, Bangladesh


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How to Cite
Bhuiyan, A. B., Ismail, A. G., Islam, K. M. A., Noor, A. H. M., Solaiman, M., & Rahman, M. A. (2020). Islamic Bank Safety Net Issues: The Regulatory Challenges for Cross Border Islamic Banking Transactions. International Journal of Islamic Business & Management, 4(2), 20-31.
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper