4. Concluding remarks
In spite of the exponential growth of the Islamic finance industry and its geographic expansion around the globe, the systemization of the underlying ICG still suffers from a large number of deficiencies. Although business experts, industrialists, and practitioners claim that the shariah-based sector is one of the most successful niches of the global finance industry seeing its double-digit growth rates over the last two decades, the IFIs’ business practices need be clearly compliant to shariah. All stakeholders must make sure that the offered IFPs and solutions do not violate the shariah maxims and, simultaneously, protect the rights.
This paper focuses on the ICG, which can play a significant role in the IFIs’ business activities. It promotes the stability of the financial system and sustains the growth and resilience of the Islamic finance industry. The new paradigm of ICG aims at supporting the competitiveness of IFIs through an exhaustive approach. Regulators have a crucial supporting role to reduce all forms of shariah violations that bring forth unfair outcomes. It also concentrates on the protection of stakeholders’ rights and the convergence toward the best business practices are at the core of the new ICG paradigm. The shariah boards should not only focus on the apparent consistency of the IFIs’ operations with shariah requirements, but on anchoring them to the substance of shariah. Although the fulfillment of the objectives of Islamic law is the strategic objective, the ICG must focus on the long run; its tactic counterpart consists of the improvement of best business practices. For example, the issue of recovery, resolution, and bankruptcy can be explored through a benchmarking analysis to find out how ICG might face the distortionary impact on stakeholders’ interests and the deteriorating effects that must be eluded.
