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The debate on the topic of Corporate Governance (CG) witnessed a substantial boost in the wake of the unprecedented financial crisis of 2008, and previously, the collapses of big corporations and banks in 1990s.The governance failure has been found as the key factor behind this debacle. The CG in Islamic perspective got attention from the scholars and researchers soon after the Islamic Banking Institutions (IBIs) emerged. Nevertheless, Islamic CG faced some issues such as incompetency of the board of directors, absence of effective risk management policies, moral hazards, and non-compliance of Shar¯ı‘ah principles. The goal of compliance with Islamic law has also been added to the CG and the State Bank of Pakistan (SBP), as regulator, issued a Shar¯ı‘ah Governance Framework (SGF) in this respect. However, a separate statutory law for the governance of IBIs is non-existent. Hence, the IBIs follow conventional regime, which failed to cater the specific requirements of IBIs. The research adopts qualitative inquiry method for deeper analysis. The governance of the IBIs should be in the hands of such competent CG players, who comply with the principles of am¯anah (trusteeship) and mas’¯ul¯ıyah (accountability) in addition to other capabilities. There are certain provisions in the existing CG regime, compatible with these principles, but the same do not ensure good governance. Further, to the best of our knowledge, no CG player is punished for non-compliance with the provisions of the SGF. We suggest proper punitive actions for the Shar¯ı‘ah non-compliances. Various scholars have discussed CG principles, but they did not check any legal regime to verify the degree of compatibility of its provisions with those principles. This study is an effort to fill the gap by assessing the compatibility of the provisions of the existing SGF with the Islamic principles of Am¯anah and Mas’¯ul¯ıyah with respect to IBIs in Pakistan.

Mohammad Ayaz, Mohammad Tahir Mansoori. (2017) Strengthening Corporate Governance Regime for Islamic Banks in Pakistan: Focusing on the Principles of Amana ¯ and Mas’¯ul¯ıyah, Journal of Islamic Business and Management, Volume 7, Issue 2.
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