“Issues, challenges and progress of Sukuk Bonds in Pakistan...”

Abstract

Purpose: The main purpose of this study was to evaluate the “Opportunities of Islamic modes of banking and finance in Pakistan” and want to know that how sukuk bonds captured almost the entire market in Malaysia and they are working there successfully then why we cannot apply fully in Pakistan. The perception of Pakistani people is that Islamic banking and conventional banking is the same this perception is very strong in Pakistan that many of the investors who wanted to invest in Islamic bonds are confused and unable to invest in Islamic bonds. Methodology: This study is based on the Exploratory research methodology, where secondary data from different sources like different research articles, research papers and journals etc., was j collected and the primary data was directly collected in banks from the bank officials. Statistical data have been taken from different official websites just to analyze the past, present and future position of sukuk bonds in Pakistan and all other countries. Findings: The study makes it clear that Sukuk bonds are not a negligible or merely temporary phenomenon. Islamic bonds are here to stay and there are signs that they will continue to grow and expand. Even if one does not subscribe to the Islamic restriction against the institution of interest, one may find in Islamic bonds some innovative ideas which could add more diversity to the current financial network. One of the main selling points of Islamic bonds, at least in theory, is that, unlike conventional securities, these are concerned about the viability of the project and the profitability of the operation but not the size of the security. Good projects which might be turned down by conventional banks for lack of security would be financed by Islamic bonds on a profit-sharing basis. It is especially in this sense that Islamic bonds can play a productive role in the growing economic development. Practical Implications: The outcome of the research might be helpful for the general public and professional students to get the clear concept about the direction of the Sukuk Bonds and the benefits that they can avail from the sukuk bonds.