Issues and challenges on the practices of gold certificate financing in Islamic financial institutions in Sri Lanka: special reference to Amana Bank PLC

Abstract

Sri Lanka is a Multi-cultural country which practices Islamic banking and finance in most successive way along with operations of Islamic banks and financial institutions. As a result of rapid growth of Islamic banking and finance industry, the Islamic pawning system has been introduced to provide shari’ah based experience to the community who need micro credit facility. Amana bank PLC introduced Gold certificate financing as an alternative for Conventional pawning and is the first of its kind to be introduced to the nascent Islamic banking and finance industry in Sri Lanka. The objective of the study is to identify Issues based on Legal and General Issues as well as Challenges based on Operational and Promoting Challenges. This study is designed as qualitative research. The sources of data is primary, collected by way of interviews. Research finding indicates Gold certificate financing is the best and successful alternative product to conventional pawning along with some identified issues and challenges which can be mitigated in future of its sustainable development.