Inside-Out: Perception of Key Finance Professionals about Theory and Practice of Islamic Banking

Islamic banking has shown tremendous growth in the first decade of 21st century. By the end of 2008, global volume of assets under Islamic banking reached US$951 billion. In Pakistan, Islamic banking has displayed a tremendous annual average growth of 76% during the last seven years and accounts for 6% of the market share (SBP-2010). However, keeping in view the religious ideologies of the significant majority of Pakistanis, Islamic banking industry has expanded at less than its expected potential. This study documents the perception of key players in finance industry about Islamic banking, to highlight the underlying issues directly responsible for slower-than-potential-expansion of this industry. Findings suggest, although theoretically, that the industry perceives Islamic banking correctly, however professionals do not feel content with its practice.