The impact of the Basle capital adequacy ratio regulation on the financial and marketing strategies of Islamic banks

Rifaat Ahmed Abdel Karim (Secretary‐General, Accounting and Auditing Organization for Islamic Financial Institutions, Manama, State of Bahrain)

International Journal of Bank Marketing

ISSN: 0265-2323

Publication date: 1 December 1996

Abstract

Reports that, unlike Western commercial banks, Islamic banks are prohibited by Islamic precepts to receive or pay interest, inter alia, in all their transactions. Argues that the Basle capital adequacy ratio (CAR), which was implemented in 1992 by regulatory authorities in many countries, is irrelevant to Islamic banks because it does not accommodate, among other things, one of the major instruments ‐ investment accounts ‐ through which Islamic banks mobilize funds on the basis of profit sharing. Develops four possible scenarios for the treatment of these accounts in the calculation of CAR and examines their impact on the financial and marketing strategies of Islamic banks in the light of the risk‐return relationship between the funds contributors of these banks.

Keywords

Citation

Ahmed Abdel Karim, R. (1996), "The impact of the Basle capital adequacy ratio regulation on the financial and marketing strategies of Islamic banks", International Journal of Bank Marketing, Vol. 14 No. 7, pp. 32-44. https://doi.org/10.1108/02652329610151368

Download as .RIS

Publisher

:

MCB UP Ltd

Copyright © 1996, MCB UP Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.