The Internationalization of Islamic Banking and Finance: The Co-Evolution of Institutional Changes and Financial Services Integration

Abstract

The basis for Islamic finance lies in the Shariah. In this paper we point out the co-evolution of institutional change and the banking expansion in Islamic countries; there are certain parallelism between the quantitative and qualitative developments of the Islamic financing industry and the emergence of supportive institutions. There are certain convergences of Islamic banking products and institutions towards traditional banking functioning but keeping their principles. The Islamic financial institutions are effective instruments towards financial and economic integration at regional and global level. The Islamic economy has also showed a lesser impact of the global crisis than the western economy.