Modan, Carino and Hassan, Rusni,(2018), The possible inclusion of legal provisions in Islamic banking and finance (The case study of the Mozambican regulatory framework). , International Journal of Law and Management, UNSPECIFIED
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Abstract
Purpose – This paper aims to thoroughly examine the extent to which the current legal and
regulatory framework is inclusive towards Islamic banking and finance (IBF) practices in the
attempts to introduce IBF as a significant component in the Mozambique’s financial system. This is
achieved by providing a critical review on the Mozambican current legal and regulatory framework
including the court and arbitration system, as well as the country’s financial institutions law and
regulations.
Design/methodology/approach – The methodology used in this study is the qualitative approach. The
analysis made is based on descriptive and analytical approach whereby the study examined and critically
analysed the banking regulations in Mozambique with the purpose of finding the legal gap in the existing
legal and regulatory framework that allows the introduction of IBF in the country.
Findings – This study finds that whilst some legal provisions in the current legal and regulatory
framework are conflicting with the Sharï’ah principles such as the definition of loans and the concept of
interest, there is also a certain number of enabling features that can be immediately explored, including
deposits (with no interest), leasing operations, investment funds or venture capital.
Research limitations/implications – At present, to the best of the authors’ knowledge, this is the first
attempt ever made to assess the compatibility of the existing Mozambican commercial laws with the Islamic
principles hence identifying the challenges that might arise due to the implementation of IBF practices in
Mozambique.
Practical implications – This paper has several practical implications in the sense that it helps the
financial market authorities in Mozambique to be able to foresee possible inclusion of provisions on Islamic
transactions in the country’s existing financial regulations.
Social implications – The contributions of this paper lie in the valuable recommendations made on the
insertion of Islamic principles in the current regulatory framework as well as assisting in overcoming some of
the conflicting aspects in medium to long term. Mozambique should explore and benefit from the experience
and lessons learned by the neighbouring countries that have successfully adopted the IBF practice. It is
recommended that the Central Bank should establish a “task force team”, comprising of multi-skilled
professionals and experts in Islamic finance from various internal areas ranging from licensing to supervision
together with Sharï’ah scholars and representatives from the Muslim Community, to study the required
process for adoption of IBF in the country.
Keywords : | Mozambique, Islamic banking and finance, Legal and regulatory framework, Potential adoption, UNSPECIFIED |
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Journal or Publication Title: | International Journal of Law and Management |
Volume: | 60 |
Number: | 2 |
Item Type: | Article |
Subjects: | Ekonomi Islam |
Depositing User: | Users 15 not found. |
Date Deposited: | 27 Dec 2019 06:13 |
Last Modified: | 27 Dec 2019 06:13 |
URI: | https://repofeb.undip.ac.id/id/eprint/1042 |