Regulating the conversion of conventional banks to Islamic: the 4 Quadrants Conversion (4-QC) framework
This research paper proposes a framework for converting conventional banks to full-fledged Islamic banks as a catalyst for propelling the Islamic finance industry to Islamic Finance 2.0 by addressing the paucity of a regulatory framework for Central Banks to regulate this conversion. To address this...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Bank Indonesia
2023
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/105918/7/105918_Regulating%20the%20conversion%20of%20conventional%20banks.pdf http://irep.iium.edu.my/105918/ https://jcli-bi.org/index.php/jcli/issue/view/8 https://doi.org/10.21098/jcli.v2i2.158 |
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| Summary: | This research paper proposes a framework for converting conventional banks to full-fledged Islamic banks as a catalyst for propelling the Islamic finance industry to Islamic Finance 2.0 by addressing the paucity of a regulatory framework for Central Banks to regulate this conversion. To address this, the paper proposes the “4Quadrants Conversion (4-QC) Framework” as a model framework for Central Banks to regulate the conversion process, consisting of twenty four
components classified into four quadrants. The proposed conversion involves leaving Shari’ah non-compliant activities and adopting Shari’ah permissible alternatives. This paper
adopts a qualitative research method based on content analysis. The research findings suggest that the proposed regulatory framework can facilitate successful conversion, resulting in a dual result of creating new Shari’ah-compliant entities and eliminating non-compliant entities.
The proposed regulatory framework can also guide banks to plan, implement, and self-assess their progress to ensure a timely and less cumbersome conversion. |
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