The main objective of this article is to describe the logical reasons why a Centralized Shariah Governance Framework (CSGF) provided by the Central Bank of Bangladesh (Bangladesh Bank) is essential for the country’s Islamic banks. In doing so, it identifies the major regulatory challenges (self-developed and disparate use of Shariah Governance (SG) practices) faced by Islamic banks in Bangladesh. It considers an analytical approach to explore the significance of a CSGF for Islamic banks in Bangladesh and examines the current diversified procedures of SG practices. This article reveals that the self-developed SG practices of Islamic banks in Bangladesh have created confusion and pessimism among the practitioners, bankers and even to the general people and regulators which is negatively affecting the overall image of Islamic banks. Such incongruent governance practices have led to inconsistencies in SG structures, implementation procedures, monitoring activities. In addition, this article reveals that these deficiencies usually exist due to weak monitoring systems of the Central Bank, ineffective functioning of individual Shariah Supervisory Boards (SSB) and the absence of comprehensive SGF. The article argues that the Central Bank of Bangladesh should initiate to reform its Islamic banking industry by introducing a CSGF aimed to identify the roles, responsibilities, powers, and functions of SSB; thereby improving governance, accountability, and overall Shariah compliance quality. This article is hoped to be beneficial for the regulators and practitioners to consider revising current practices.


Keywords: Centralization, Bangladesh Bank, Islamic banks, Shariah governance framework.


Cite as: Alam, M. K., & Thakur, O. A. (2022). Why does Bangladesh require a centralized Shariah governance framework for Islamic banks?  Journal of Nusantara Studies, 7(1), 24-42. http://dx.doi.org/10.24200/jonus.vol7iss1pp24-42

Author Biographies

Md. Kausar Alam, BRAC Business School, BRAC University, Dhaka 1212, Bangladesh.

Dr. Md. Kausar Alam works as an Assistant Professor in BRAC Business School, BRAC University, Dhaka. He published numerous articles in reputable international journals in the area of Accounting, Islamic finance, business, and corporate governance (indexed in Scopus, ABDC and WOS). His research interest areas are Shariah governance of Islamic finance, Integrating reporting, institutional theory, Islamic banking, corporate governance, and legitimacy theory.

Oli Ahad Thakur, Faculty of Business Studies, International Standard University, Dhaka 1212, Bangladesh.

Oli Ahad Thakur is currently working as an Associate Professor and Chairperson in the Department of Business Administration at International Standard University, Bangladesh. He completed his PhD degree in May 2020 from the Putra Business School, Malaysia. He has more than 15 years of teaching experience at the university level. He produced a good number of research publications in both local and international ranked journals (ABDC, Scopus indexed).


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How to Cite
Alam, M. K., & Thakur, O. A. (2022). WHY DOES BANGLADESH REQUIRE A CENTRALIZED SHARIAH GOVERNANCE FRAMEWORK FOR ISLAMIC BANKS?. Journal of Nusantara Studies (JONUS), 7(1), 24-42. https://doi.org/10.24200/jonus.vol7iss1pp24-42