Implementing monetary policy with application of Sukuk: challenges and policy directions

Authors

  • Md. Aminul Islam Faculty of Business & Communication, Universiti Malaysia Perlis, 01000, Perlis, Malaysia.
  • Md. Golzare Nabi Bangladesh Bank Training Academy (BBTA), Dhaka 1216, Bangladesh.
  • Rafiun Nabi Robi Axiata Limited, Dhaka 1212, Bangladesh.
  • Md. Sharif Hassan Faculty of Business & Communication, Universiti Malaysia Perlis, 01000, Perlis, Malaysia.

DOI:

https://doi.org/10.24200/jonus.vol8iss2pp27-43

Abstract

Each market economy uses monetary policy to attain certain macroeconomic goals of price stability, higher growth and employment. A market economy having an interest-based conventional banking system applies mainly interest-based tools to attain the objectives of monetary policy. In contrast, a market economy with interest-based and interest-free banking needs to apply Shariah-compliant monetary instruments vis-à-vis conventional tools for attaining the goals of the monetary policy. As there is a paucity of quality research on Sukuk-based monetary policy, the current paper will explore Shariah compliant monetary instrument ‘Sukuk’ for use as a monetary tool in dual banking, examining experiences of Shariah-based monetary operations in different countries. The paper will also examine the challenges of monetary policy operating in the dual banking system of Bangladesh with policy options for addressing the challenges.

Keywords: Dual banking system, monetary policy, Shariah based monetary operations, Sukuk, Qard-al-Hasan.

Author Biographies

  • Md. Aminul Islam, Faculty of Business & Communication, Universiti Malaysia Perlis, 01000, Perlis, Malaysia.

    Dr. Md. Aminul Islam is a Professor in Finance at Faculty of Business & Communication of Universiti Malaysia Perlis. He received PhD in Finance from Universiti Sains Malaysia. He has authored and co-authored more than 214 journal papers and 63 conference papers. He has also authored and co-authored five books. His research area of interest includes: FinTech, Blockchain, Econometrics, Islamic Banking, Sukuk and Management.

  • Md. Golzare Nabi, Bangladesh Bank Training Academy (BBTA), Dhaka 1216, Bangladesh.

    Dr. Md Golzare Nabi obtained BSS (honors) and MSS (Economics) from University of Dhaka, MS in international Economics from North South University and PhD (finance) from Universiti Malaysia Perlis. Currently, Dr. Md Golzare Nabi works as Director (Research) and Senior Faculty at Bangladesh Bank Training Academy (BBTA), Bangladesh Bank, Central Bank of Bangladesh, Dhaka, Bangladesh and he also works as Executive Editor of BBTA Journal ‘Thoughts on Banking and Finance’. He has more than 30 publications on banking, finance, Islamic finance, sukuk, takaful, mobile financial services, remittances, zakat, waqf, SDGs, GDP-Finance nexus and micro finance published in local and foreign journals.

  • Rafiun Nabi, Robi Axiata Limited, Dhaka 1212, Bangladesh.

    Rafiun Nabi obtained Bachelor of Business Administration (BBA) from North South University Bangladesh. Now he is pursuing EMBA at United International University, Dhaka, Bangladesh. As a professional, he started his career as Territory Officer at bKash Limited, leading mobile financial service provider in Bangladesh. Currently, he works as Manager (Marketing) at Robi Axiata Limited, the second largest mobile network operator in Bangladesh. So far, he published three articles as co-author in referred journals.

  • Md. Sharif Hassan, Faculty of Business & Communication, Universiti Malaysia Perlis, 01000, Perlis, Malaysia.

    Md. Sharif Hassan is a PhD Scholar at Faculty of Business & Communication of Universiti Malaysia Perlis. He is also a Lecturer at Department of Business Administration of University of Asia Pacific, Bangladesh (currently on study leave). He completed his BBA in Finance from East West University and MBA in Accounting Information Systems from University of Dhaka. His research interest areas include: FinTech, Financial Statement Analysis, Islamic Finance, and Technology Management.

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Published

2023-06-30

Issue

Vol. 8 No. 2: Journal of Nusantara Studies (JONUS)

Section

Articles

How to Cite

Implementing monetary policy with application of Sukuk: challenges and policy directions. (2023). Journal of Nusantara Studies (JONUS), 8(2), 27-43. https://doi.org/10.24200/jonus.vol8iss2pp27-43