A contemporary survey of islamic banking literature

tThis article reviews empirical studies on Islamic banking and concentrates on their main findings whilehighlighting future research directions. The earlier literature on Islamic banking built a foundation usingnormative judgment, descriptive analysis, theoretical development, and appraisal of country experiences.The paper discusses scholars’ concerns that have led to a paradigm shift in the system and highlightpractitioners’ disquiet about recent practices. Subsequent research focuses on empirical investigationswithout extensive analytical and theoretical exploration in the area. Recent studies focus on the financialcrisis, solvency, maqasid, disclosure and financial inclusion, and regulations. Even with the spillover effecton the Islamic banks after the crisis, a few pieces of evidence show that the system performs below itsconventional counterpart. The paper discusses issues that are relevant to Islamic banking and identifiesother avenues for future research.