Understanding Islamic Finance - Doha Academy of Tertiary Studies

480 Understanding Islamic Financeand practically involve themselves in real business activities. In the words of Zubair Hasan,an economist at the International Islamic University of Malaysia: “One must see Islamicbanking as an on-going process in a social milieu characterized with mass poverty and grossinequalities in the wealth, income and opportunities”. 13The regulators, authorities in governments and the practitioners in Islamic banking haveto work together in order to take care of areas like education, training and public awarenessabout the Islamic financial system, effective enforcement of contracts, strengthening recoverysystems and conducting internal and external Sharī´ah compliance audit of IFIs’ operations.Strengthening the regulatory set-up, facilitating IFIs to offer suitable products, designingprudential rules to reflect the specific risk characteristics of Islamic financial contractsand application of well-thought-out risk management and accounting standards will beinstrumental in deepening and widening the financial sector. Regulators need to providean enabling environment and ensure that proper procedures for good corporate governance,transparency and ensuring Sharī´ah compliance are in place.The use of Islamic finance principles for public sector financing needs more attention, asit could be helpful in ensuring fiscal discipline and thus giving a just basis for monetarymanagement.13 Hasan, 2005, pp. 229–248.