Integrating Islamic Law into Iraqi Legislation:

A Study of the Islamic Banks Law No. 43 of 2015

Abdulrassol Abdulridha Shawka

Ahmed Shawka

 

Abstract: Islamic banks function as a parallel financial mechanism to conventional commercial banks, serving as a key instrument for the circulation of capital and its redistribution across various segments of society in accordance with the principles of Islamic law. Recognising the deep-rooted religious sensibilities of the Iraqi populace, the Iraqi legislature enacted the Islamic Banking Law with the aim of mobilising both savers and investors within a Shari’ah-compliant framework. The law aims to promote economic integration by aligning savings, investment, and consumption in a manner that fosters financial inclusion and discourages interest-based transactions, which are prohibited in Islamic jurisprudence. This model, however, demands a higher degree of administrative and financial proficiency than that typically required in the operation of conventional banks. Successful implementation necessitates managerial personnel who possess not only technical expertise but also a nuanced understanding of Islamic legal principles. In practice, the Iraqi banking sector currently suffers from a deficit in this dual competency. Furthermore, Islamic banks in Iraq face significant challenges in effectively marketing their services, both in terms of public outreach and operational transparency. These limitations hinder their ability to realise the full potential of Islamic financial instruments within the national economy.