Challenges of Islamic Banking in Gulf Corporation Council

Abstract

The purpose of this article is to identify major challenges for Islamic banking  in the Gulf Corporation Council (GCC) context. 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. The interviews revealed that, lack of differentiation between Islamic and conventional banking is the bigest challenge facing Islamic banks in GCC and is fostered by the second challenge which is lake of standardization of rules about Islamic financial products. Finding staff having the required technical expertise of Islamic banking is not a serious challenge according to respondents, but awareness of the basic principles and the ultimate goals of Islamic banking is the problem.

Keywords: Islamic Banking, Challenges, Islamic-conventional Differentiation, standardization of Islamic products, Islamic banking regulation, Shariah law, Shariah-compliant.