Muslim nation and is subject to the nation's rules and regulations.5. Potential conflict between domestic banks, foreign banks and Islamic banks - It seems that domestic and foreign banks will experience continuing difficulty in adopting Islamic banking practices, including the PLS scheme, until they become more confident of the results of investing ventures.6. Lack of deposit insurance system - The lack of such a system becomes of a greater concern because Islamic banks have standard measures of reserve requirements or liquidity ratios.7. Legislation - The depositors’ funds are one of the basic asset acquiring methods of Islamic banks. The existing banking laws, however, do not permit banks to engage directly in business enterprises using these funds. Therefore new legislation and banking laws need to be established.8. Re-training of staff - The bank staff will have to acquire substantial knowledge and skills for new procedures to operate the Islamic banking system. This seems to be a very time consuming process as a large number of persons have to be re-trained.9. Taxation - The bank is comparatively a big business and thus needs to disclose its profits and losses every year. The Government requires banks to perform an audit for its financial statements and determine the result of the operations. Once this is done, the taxation authorities commence to claim the taxes due from the bank.10. Uneasy questions of morality - The practices in use by the Islamic banks have aroused questions of morality. Some argue that the practices that involve interest have simply changed names to appear in an interest-free manner. It is questionable whether the Islamic banking system is truly adopted by Islamic banks and institutions or not. CONCLUSIONIslamic banking is a new system yet it has already been implemented many Muslim and a few non-Muslim countries. Despite the successful acceptance there are problems which are mainly in the area of finan...
