Islam has rules and obligations that are compulsory to be followed by the practitioners of the religion. And it is believed that those who do not abide by them, surely have to face the repercussions and consequences of it in time. Even when it comes to banking, the religion has set rules and procedures to be followed, and while it is beneficial in many ways, there are certain challenges this industry has to face. Here are some of them.
There generally is a misconception amongst the people that islamic insurance and banking are only meant for the Muslims. This however is untrue in every way. While it is primarily aimed at serving the Muslim niche, it isn’t restricted for the use of others. Such conceptions have also led to many confusions in the minds of the normal people, leading to this industry gaining very little attention and hype. And so the lack of knowledge on this aspect is considered to be one of the biggest challenges these banks are facing and striving to overcome.
Lack of liquidity instruments
Islam has strict rules against interest and the involvement with interest. And it is primarily because of this reason that Islamic banking of Hejaz Financial Services mainly deals in terms of real assets rather than liquid monetary instruments and this has also become a challenge for them too mainly because such instruments are rarely maintained.
Lack of legal rules
When it comes to the conventional banking, there is always a standard set of rules that controls such banks from exploiting customers and engaging in malpractices. And since these are also published on a global basis (more or less), it allows the firms to even expand beyond seas. However, when it comes to the Islamic kind, the set rules are purely religious based ones, thus creating a lack of legal rules and regulations allowing expansions to take place. This too is a huge challenge when it comes to spreading the word on the bank throughout the entire globe!
Lack of awareness
Even amongst the Muslims, there is a very less percentage that is aware of such banking facilities customized for the community. This too is a huge barrier these institutions have to face when it comes to establishing themselves in the industry.
As a bank operating in this field, remember that you need to work on establishing your firm better in the industry and spread the word on your services through proper marketing, in order to gain the expected outcomes. And if you are a customer, keep in mind that whether you are a Muslim or not doesn’t matter at all when it comes to selecting the right kind of bank to deal with, what matters is that you make the right choice!