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De-Secularizing Finance: Islamic Banking in Pakistan

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posted on 2012-07-20, 00:00 authored by Sarah Shafiq

Finance is conventionally associated with modernity and secularization, yet in recent decades Pakistan has seen the institutionalization of shari'a ? observant, desecularized banking services. How and why did Islamic Banking and Finance emerge in Pakistan? How did Islamic economic theory begin to challenge conventional economic theory, and what were the barriers to its implementation? What role did various religious groups play in this process? How does Islamic banking function, and what does it mean to Islamic bankers themselves? I explore these questions using content analysis of the earliest publications of Islamic theory, semi-structured interviews with Islamic bankers and shari'a board members, and participant observation at an Islamic bank.

I found that there were two historical cultural discourses that gave rise to two norms of exchange. The first norm was to strive for halal income for individual Muslims. It was generated by the traditional Islamic discourse focusing on following the eminent Islamic jurists of the past and deliberately avoiding engagement with Western thought. The second norm was to provide a socially just economic system. This norm was formed by non-traditionalists who also take into account the spirit of the law and directly engaged with the West, albeit in a reactionary manner within a colonial context. The traditional approach has successfully institutionalized because it was able to align smoothly with the conventional financial system. There are a number of implications of these observations. Although political concerns play an important role, they work alongside cultural processes. De-secularism does not work if it is enforced but, as a social process, it takes a pragmatic and non-confrontational route. Period and level of analysis are important for any understanding of de-secularization processes, as Pakistan's economic system has been secular, de-secular, then re-secularized in the past three decades. Now, Islamic finance is successfully institutionalized at the meso-level i.e. the market. As well as studying institutionalization at the macro level, I examine institutionalization 'on the ground'. The form focused industry is primarily institutionalized by regulative mechanisms like shari'a audits but some normative aspects exist. IBF is a modern institution that enables Muslims to lead a meaningful life while participating in the un-precedently globalized world.

History

Date Modified

2017-06-02

Defense Date

2012-07-02

Research Director(s)

Lynette Spillman

Committee Members

Terence McDonnell David Sikkink Omar Lizardo

Degree

  • Doctor of Philosophy

Degree Level

  • Doctoral Dissertation

Language

  • English

Alternate Identifier

etd-07202012-162021

Publisher

University of Notre Dame

Program Name

  • Sociology

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