Sana TawfikFollow

Degree

Master of Science in Islamic Banking & Finance

Department

Department of Finance

Faculty/ School

School of Business Studies (SBS)

Date of Submission

Spring 2024

Supervisor

Dr. Irum Saba, Associate Professor & Program Director MS-IBF, Institute of Business Administration, Karachi

Co-Supervisor

Dr. Ashraf Khan, Research Fellow in Finance, Department of Management, University of Bergamo, Italy

Committee Member 1

Dr. Syed Aun Raza Rizvi, Examiner-I, Associate Professor of Finance, Lahore University of Management Sciences (LUMS)

Committee Member 2

Dr. Ameenullah Aman, Examiner-II, Associate Professor, SZABIST University Karachi

Keywords

Islamic benchmark pricing, Islamic interest rate, Bibliometric Review

Abstract

In economies driven by interest rate mechanisms, these rates significantly influence various economic aspects. However, Islamic finance, founded to avoid the adverse effects of Riba (interest), faces challenges as many Islamic economies now benchmark financial products against interest rates, which is prohibited under Shariah laws. This practice undermines the essence of Islamic finance, as the system still relies on market interest rates due to the lack of widely accepted Islamic alternatives. Scholars have proposed various alternatives over the years, highlighting the need for quantitative research in this area. Chapter one of our research provides a bibliometric review of Islamic benchmark rates, analyzing 163 articles from 1990 to 2023 sourced from the Scopus database. The review identifies key academic contributors and three main research themes: an overview of Islamic benchmark rates, analysis of proposed Islamic alternatives, and existing benchmarks used globally. This analysis highlights research gaps and sets future research agendas, offering a foundation for further study in Shariah-compliant benchmarks. Chapter two proposes an alternative Islamic benchmark rate to reduce reliance on interest-based pricing in Islamic banking. It builds on theoretical concepts like Tobin's q theory, using statistical analysis to demonstrate the alignment of the proposed benchmark with broader economic activity. The findings contribute to developing Shariah-compliant financial instruments, offering a viable alternative to conventional benchmarks and paving the way for a more ethically sound financial framework in Islamic banking.

Document Type

Restricted Access

Submission Type

Thesis

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