Islamic Banking Regulation and Supervision: Survey Results and Challenges

The growing presence of Islamic banking needs to be accompanied by the development ofeffective regulation and supervision. This paper examines the results of the survey conducted bythe International Monetary Fund to document international experiences and country practicesrelated to legal and prudential frameworks governing Islamic banking activities. Although anumber of countries have made considerable progress in creating legal, regulatory, andsupervisory frameworks that accommodate Islamic banking, there are substantial differences. Thispaper also identifies a number of challenges faced by regulatory and supervisory agenciesregarding Islamic banking.