This paper discusses the critical role of regulators in the successful conversion of conventional banks into Islamic banks, particularly in emerging markets such as Central Asia. It emphasizes that effective regulatory approval, oversight, and engagement are essential at every stage of the transformation process.
The study outlines key steps in conversion, starting from regulatory consent and strategic planning by bank management, followed by market assessment, capacity building, and development of a clear conversion roadmap. It highlights the importance of early involvement of Shariah experts to guide compliance and ensure proper governance throughout the transition.
The paper also addresses technical challenges, especially in restructuring conventional financing into Shariah-compliant instruments, requiring flexibility and collaboration between scholars and practitioners. It stresses that successful conversion depends on a coordinated effort between regulators, Shariah boards, and bank leadership.
