Abstract
This study investigates the lived experience of the development of Islamic banks in Pakistan and examines the influence of colonization, the colonial banking system, and the colonial regulations on the development of Islamic banks institutions and regulations. The study also examines the roles played by key stakeholders in the development of Islamic banks in Pakistan, including regulators, Shariah experts, bank branch managers, and internal bank process managers. Finally, the research examines how the customers have felt after interacting with Islamic banking through its different products and services. Critical constructionist epistemology and theory of postcolonialism were employed to theorize the development of Islamic banks in Pakistan. Primary data was collected by using focused interviews with 89 respondents from the State Bank of Pakistan, branch managers, sales managers and process managers in Islamic banks, Shariah scholars involved in the development of Islamic banking regulations, products, and providing shariah compliance and customers. The interviews were transcribed verbatim in Urdu, and then translated in English language. The data was analyzed using thematic analysis. NVIVO was extensively used in data analysis.According to the findings, the role of the State Bank of Pakistan is central to the development of Islamic banks in Pakistan, that started to take shape in 2002. My research illustrates that Shariah scholars acted as consultants in Islamic banks, this suggested a bottleneck with respect to the Islamicisation process as they have a limited role in strategic goal setting for Islamic banks. The definition of riba is still legally contested among the Shari’ah scholars and the State Bank of Pakistan. There is emerging evidence of a power struggle between the shariah scholars and the State Bank of Pakistan in regulating Islamic banks in Pakistan through the Shari’ah governance framework. Use of hila, agency contracts, and mimicking conventional banking products and practices are widespread. While customers were generally dissatisfied and skeptical with Islamic banking, the word of the Shari’ah scholar laid many of their apprehensions to rest. The use of KIBOR (the Karachi Interbank Offering rate) continues to raise questions in the minds of the customers, though several scholars have issued fatwas in favor of using the KIBOR rate. In the context of Pakistan, there is significant evidence of the colonial influence in constraining the development of Islamic banks as financial intermediaries, as the focus is on Islamicising colonial banking systems and regulations.
| Date of Award | 2023 |
|---|---|
| Original language | English |
| Supervisor | David CARTER (Supervisor) & Barbara Voss (Supervisor) |