Abstract
Islamic economics and finance is a practice that existed several decades ago but improved with time in terms of the products and services offered to the public. This proves that the Islamic banking has been growing globally. Unlike conventional banks, the participatory approach and risk-sharing are the basis of which Islamic financial system follows. Therefore, Islamic banks have in-depth relationship with their customers. In addition, Islamic banks face several challenges when complying with international rules and guidelines to the underlying risks that Islamic banks bear. There are several similar risks that both conventional and Islamic bank face, but there are also some other unique risks only Islamic banks are exposed to such as Shari’ah non-compliance risk. The main objective of this chapter is to study the regulation of capital adequacy requirements proposed by IFSB and compare it with Basel standards for commercial banks. The analysis suggests that financial authorities should direct all Islamic financial institutions particularly, Islamic banks in the UAE to implement IFSB standards and guidelines for capital adequacy requirements.
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Onagun, A.I. (2019). Capital Regulatory Requirements for Islamic Banks in the UAE: A Comparative Analysis. In: Zulkhibri, M., Abdul Manap, T. (eds) Islamic Finance, Risk-Sharing and Macroeconomic Stability. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-05225-6_5
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DOI: https://doi.org/10.1007/978-3-030-05225-6_5
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Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-05224-9
Online ISBN: 978-3-030-05225-6
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