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Is Islamic banking truly Islamic, or is it just cosmetically-enhanced conventional banking?
Islamic banking is differentiated from conventional banking through the application of shariah compliant product concept and contract, business process, disclosure and operating module. Those component enables the establishment of policies, guidelines and standards that governs the operation and control of islamic banking. The process to established the said governance is rigorous. Each islamic bank is guided by a panel of shariah scholars and deliberate and discuss each components and ensure it is in-line with the shariah.
The above practise makes islamic banking a highly regulated industry and not merely copying conventional banking. Apart from complying to regulator's requirement which also applies to conventional banking, islamic banks would need to observe additional compliance to their shariah council. However, such controls have not dampen the development of islamic banking. Shariah councils of banks are willing to explore various definitions put forward by many earlier shariah scholars and not limiting themselves to a single definition have enable islamic banking to flourish.
