Issues and Challenges of Financial Management Practices in Islamic Financial Institutions: Empirical Evidence From Bangladesh

Abstract

Studies suggest several issues and challenges of financial management practices in Islamic banks and insurance companies and Islamic non-bank financial institutions (INBFIs) in Bangladesh. The purpose of the research is to examine the issues and challenges of Islamic Financial Management (IFM) from an empirical perspective. The study relies on a structured questionnaire survey in prominent Islamic financial institutions (IFIs) of Bangladesh for achieving its objective. After confirming data reliability based on Cronbach's alpha, the study proceeds to analyse by applying descriptive statistics and principal component factor analysis using correlation, Kaiser-Meyer-Olkin (KMO) and Bartlett's Test and VARIMAX Rotation. The study finds that there is no separate regulatory framework to supervise and monitor IFIs in Bangladesh rather the central bank regulates the Islamic financial system based on the existing laws and regulations of the conventional financial system. The findings of this study suggest that the government should establish a separate regulatory body for monitoring the IFI’s functions so that they can perform their activities smoothly in the congenial environment in Bangladesh.
 JEL Classification Codes: G10, G21, G23.

Exploring the dynamics of Bangladesh bank's monetary policy: A factor analysis approach

“…The study has addressed the concerns of all stakeholders in the money market as to the practical impact of monetary policy on economic development and the determinants of monetary policy. The study has identified the seven significant determinants that influence the monetary policy of Bangladesh Bank, such as the price risk factor, the factor of market operations, political and economic factors (Farooq et al, 2023;Dogru et al, 2019;Işık et al, 2017;Işık, 2015Işık, , 2013, governance factors, SDG factors (Dam et al, 2023;Han et al, 2023), fiscal and risk factors (Işık et al, 2023a(Işık et al, , 2023b, and factors of price stability and market liquidity (Islam et al, 2023a, Sarıgul et al, 2023Singh, 2022). By statistical analysis, these are the determinants that substantially impact monetary policy.…”

Financial Literacy of Financial Institutions in Bangladesh

“…In conclusion, the literature review highlights the evolving discourse on financial literacy within financial institutions and the importance of bridging gaps in existing research. By situating this paper within the broader literature, we lay the foundation for a critical analysis of financial literacy in Bangladesh's financial institutions, addressing unsolved issues and contributing to the ongoing dialogue in this vital field of study (Islam, 2015;Islam, 2016a;Islam, 2016b;Islam, 2016d;Islam, 2016e;Islam, 2016f;Islam, 2016g;Islam, 2016h;Islam, 2016i;Islam & Salma, 2016a;Islam & Salma, 2016b;;Islam & Salma, 2016c;Islam & Barghouthi, 2017a;Islam & Barghouthi, 2017b;Islam & Barghouthi, 2017c;Islam & Barghouthi, 2017a. ;Islam & Barghouthi, 2017b.…”