Abstract
This article discusses the move for conversion of a conventional
bank into Islamic one taking the Bank of Khyber (BoK), Pakistan as a
case study. It provides an in-depth and emprical narrative of how Islamic
banking has been introduced at the Bank of Khyber particularly motivated
by political and social incentives to reconstruct the current conventional
banking model. Initially, BoK was operating on conventional model of
financial intermediation and gradually, an Islamic banking division, a
Shar¯i‘ah Board, and multiple Islamic depository and financing processes
have been introduced and institutionalized to establish social and political
legitimacy within the context. This case highlights the core challenges to the
BoK team and value creation of the institutional intervention, particularly
shared value creation and collaborative efforts across the industry, from an
institutional theory perspective. This case carries multiple implications for
the Islamic banking professionals and offers practical insights on the process
of business model reconstruction within the context of Islamic banking.
Muhammad Mohsin Khan, Muhammad Atiq, Karim Ullah. (2018) Institutionalizing Islamic Banking: The Case of Bank of Khyber, Pakistan, Journal of Islamic Business and Management, Volume 8, Issue S.
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