|Under the sponsorship of the International Finance Corporation (IFC) of World Bank (WB) and other international funding agencies such as European Union (EU) and Development for International Development (DFID), the Investment Climate Research Unit (ICRU) of the American International University-Bangladesh (AIUB) spearheaded in organizing a Research Colloquium. Under the Investment Climate Fund Project, AIUB is one of the five universities selected to implement the project. This project is an innovative approach in promoting investment climate with the participation of the academic community. AIUB-ICRU in collaboration with the stakeholders of the university designed and conducted 3 important research topics focused on specific business dimensions of investment.
The first research topic is on “Islamic Finance in Mobilizing Financial Resource of Bangladesh”.with Mr. Md. Zakaria Masud as the principal investigator and Prof. Dr. Anwar Hossain as the Technical Adviser. This research was anchored on the certain conditions obtaining about Islamic Finance. This is a form of ethical investment and lending; loan and investments are made without interest; it is equity sharing; and it prohibits investment in companies engaged in gambling, alcoholic beverage or porcine food products. There is a growing demand for Islamic Finance in Bangladesh in view of the significant success and prospects experienced by Bangladesh economy during the last 2 decades. This study attempted to answer the following questions: how Islamic Finance conforms with available forms of financing instruments as per Islamic Sariah? how can Islamic Finance be mobilized to enhance financial resources of Bangladesh? identify problems and issues that beset Islamic Finance? and find out how these problems and issues be addressed for expansion and sustainability of Islamic Finance. The study revealed that International Banks are offering different deposit schemes and for lending money the IPLS or Profit Loss Sharing can work best; most of the cases return sharing ratio has been determined under negotiation between bank and client; people do not like to deposit in IBs as these banks failed to offer fixed rate of return to its depositors and if they operate under Shariah based structure it can better mobilize deposit; lack of market awareness although the most preferred banking feature is the banking under Islamic Shariah and religious belief but requires positive interference from the government and formation of a unified Shariah Council. Therefore, it was recommended that a Motto of the Business: “Banking under Islamic Shariah and Religious Belief”; prioritize nature of resource mobilization; boost confidence level of the market about Islamic Finance; IBs and Bangladesh Bank provide training to upgrade knowledge on Islamic Finance; government amend existing financial laws and regulations taking into consideration the Islamic Shariah and adopt PLS in all Islamic Financial Institutes of Bangladesh.