Towards an Objective Assessment of the Evolution of Islamic Banks

Abstract

This study aims to examine and evaluate Islamic banks after four decades of banking business. To achieve this objective, the study provides a brief account of the emergence and development of Islamic banks. Then, it presents the most prominent achievements of Islamic banks indicating the challenges and obstacles faced. Finally, it reviews and discusses the criticisms addressed to Islamic banks. The results of the study confirm that Islamic banks are a real and effective addition to the banking system in general as they play an important role in serving the economies in which they operate. However, the achievements of Islamic banks practically are less than expected and aspired to by their stakeholders. There are imbalances and apparent shortcomings that do not commensurate with the prestige, reputation, and capabilities of these banks. Nonetheless, it should be emphasized that the reasons behind the imbalances and shortcomings cannot be attributed to Islamic banks alone. The official regulatory authorities together with the scientific and academic bodies share the blame as well. On the other hand, there is a vital need for a supreme Sharia board in the field of Islamic banking in particular, and Islamic finance in general.