Diversification of Islamic Financial Insturments
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system and possible approaches for further development; market micro-structure and
practices; product range and product development; nature and preferences of market players;
identification and development of support institutions; market performance evaluation; cost
benefit analysis of market expansion and integration; designing of incentive and corporate
governance system; evaluation of the nature and role of Islamic capital markets in the overall
Islamic financial system; and many other dimensions. Priority must be given to the creation of
an enabling financial infrastructure consisting of common international standards for
development, supervision and regulation of Islamic capital market that may facilitate not only
continuous development of a sound, resilient and stable Islamic capital market industry, but
also one that promotes innovation and growth.
Islamic Capital Market sector has high potential in Bangladesh. But this potential needs proper
nourishment from both the organizations and regulatory body. The government should take
some major steps for the betterment of this sector. The government itself can establish an
Islamic Capital Market organization to improve the faith of people in this sector. This will also
encourage people to get more aware of the products and scopes of Islamic Capital Market
sector. This will drastically improve the condition of Islamic Capital Market sector in
Bangladesh. More regulatory framework should also be developed, by the government, in favor
of this sector.
3.6.4 TAKAFUL (ISLAMIC INSURANCE) IN BANGLADESH
The factors preventing the development of Islamic insurance and its financial instruments
diversification are investment system, financial instruments’ interest, gambling, absence of
Islamic insurance rules and regulations and ambiguity in Insurance Act. This is a big obstacle
to promote the Islamic insurance industry in the country. However, the growth and
development of the Islamic Insurance sector is being held back by several factors. The
prominent factors are: a) Inadequate regulation: There’s no separate regulatory body for
overseeing Islamic Insurance sector. An increased number of government policies and
government intervention in this sector can be proved as very beneficial for its growth and
development. b) Lack of awareness: The target group is unaware concerning this sector. Many
believe that Islamic Insurance is not compliant with Islamic Shariah and thus reluctant to
subscribe. c) Lack of industry knowledge: There is also a lack of training and knowledge
regarding this sector in our economy. Training must be provided to the new entrants of this
sector so that they can get well identified with their future duties and responsibilities for
performing their job. d) No integration of financial technology in the sector: A very small
amount of technologies are being introduced by the practitioners of the Islamic Insurance. The
table below shows the Islamic insurance companies present in Bangladesh.