Strengthening the Governance of Islamic Banks

Although the Islamic finance industry is growing at a rapid rate, researchers have highlighted areas of governance that must be reformed. In 2007, the market price of Islamic- compliant bonds – or sukuk – fell sharply after Taqi Usmani of the Accounting and Auditing Organization for Islamic Finance Institutions, a regulatory body in Bahrain, said that 85% of the bonds were not compliant with Islam’s sharia laws, highlighting growing concerns over the governance of Islamic finance. A decade later, the industry is growing at a rapid rate and its products and services are widely offered across the world. According to the Malaysia International Islamic Financial Centre, the industry had assets of US$2.1 trillion