The epidemic of COVID-19 has been emerging as a threat not only to a global health system and draining of economic resources but it is also contributing to increase the level of poverty with a fear and chaos that prevent us from making the right decision at right time. The COVID-19 has exponentially spread across the world and led to 29 million cases with 933 thousands deaths till September 2020 around the globe. Shari’ah compliant microfinance solution for poverty eradication is considered as one of the acceptable and suitable way-outs to alleviate poverty but now it is facing numerous types of challenges like lack of capital and funding, sustainability, high cost of funds, innovation and diversification of products, availability of human resource with Islamic financial expertise etc. The objective of the study is to find out the impact of COVID-19 on Islamic Microfinance Institutions (IMFIs) in terms of income, risk and portfolio. Further, to find out the impact of regulatory steps toward sustainability of IMFIs, we have collected data through self-administrated questionnaires consisting of seven parts. Descriptive and frequency analysis have been used to describe the results. Results depict that the portfolio and income of the IMFIs have decreased. Further, operational cost and productivity of the employees have also decreased. Therefore, industry demands relief package from regulators for growth and sustainability to save the Shari’ah compliant poverty eradication solutions. This might be helpful to compensate the losses of deferment and diversification of products. The findings of the study hope to contribute toward sustainability of IMFI’s, which have been damaged due to COVID-19.
Keywords: Islamic Microfinance, COVID-19, Regulator, Poverty, Challenges

One of the core differences between conventional and Islamic Financial institutions is that the products, services, and operations Islamic Financial institutions offered are completely certified by the Shariah board while the conventional institutions don’t require any such Shariah certifications. In addition, the conventional financial institutions depend upon the financial and economical transactions while the Islamic financial institutions cover the moral, social, ethical, and spiritual dimensions to improve the justice system of the society. Furthermore, in both conventional and Islamic banking system, governance practices play a key role to ensure that businesses are run smoothly and soundly. Islamic banks are the institutions inspired from the Islamic law of business transactions wherein the Shariah supervisory board has the responsibility to govern and implement Shariah pronouncement. The competency of a Shariah board is a matter of concern especially for Islamic banking institutions in any country because the regulatory environment varies from one region to another. The purpose of this study is to develop an ideal Shariah competency framework (iSCF) for Islamic banking institutions and then to evaluate the competency level of Shariah board members that serve Islamic banks in Pakistan. To meet the objectives of this research, data has been collected from 71 Shariah board members that serve 22 Islamic banking institutions in Pakistan. The methodology adopted in the study is purely qualitative where the case study approach is applied as a research strategy. It is concluded from the analysis that Shariah knowledge is not the only parameter to define adequate Shariah competency of a Shariah advisor. The policy implications of the study are much broader in scope and equally recommended to the regulator (SBP), banks, and customers to measure the Shariah competency level of each Islamic bank based on the Shariah board member’s competency. It will help the regulator as well as each individual Islamic bank to develop a well-designed policy framework for the affiliated Shariah scholars.
Keywords: : Shari’ah governance framework, Shari’ah scholars, Implementation, Islamic banking institutions

There are two main international standard setting bodies which provide shariah, accounting and auditing standards for global Islamic financial industry. These two institutions are the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Bank Negara Malaysia (BNM). The objective of the current study is to provide an analysis of Mudarbah financing by comparing the standards of the AAOIFI and BNM. Qualitative method of research is used to analyze the content from archival sources. It is established that there are a lot of clauses between the two standards which need to be highlighted for the development of a comprehensive and uniform Islamic financial system. This study will help to achieve this goal by minimizing the gap between AAOIFI and BNM.
Keywords: Style timing; Volatility Timing; Shariah-compliant funds; Equity funds; Pakistan

The essential precondition of efficient markets is desired if funds need to be owed to the highest-valued projects. This is only conceivable Stock prices are well priced and replicate the ultimate value of future free cash flows. The current study is directed to examine Weak Form Efficiency (WFE) by using the indices of Karachi Meezan Index - KMI-30 and Karachi Stock Exchange KSE-30 as proxies on daily data set for the last ten years. The weak form efficient hypothesis was examined through the Random Walk Hypothesis (RWH) in the return series of closing. The statistical results were estimated with the Unit Root Tests namely Augmented Dickey Fuller Test and Philip Perron Test. The results exposed that the stocks of both the indices at levels is non-stationary and a trend is present in the movement and do not follow random walk thus the market is weak form inefficient. But at differenced level significantly rejected the null hypothesis and thus revealed the presence of randomness and market becomes weak form efficient. Furthermore, the estimated results demonstrate that Islamic stock index posted better results in terms of profits but is more volatile than their conventional counterpart. As regards to the informational efficiency, both the indices bear the same situation and are weak form inefficient thus the proper allocation of financial resources is not possible in PSX.
Keywords: EMH, WFE, RWH, Karachi Meezan Index (KMI), Karachi Stock Exchange (KSE)

Classical sharia compliant tools of Islamic finance i.e., trade, rental, participatory and service modes, supported with ancillary non-compensatory contracts are tactfully adapted to satisfy market demand of banking and finance industry. The classical structures of these contracts with careful sharia compliant modification such as independent hybrid contracts are whole-heartedly accepted by majority of sharia scholars and sharia conscious stakeholders but some modifications and extensions in murabaha and tawarruq named as organized tawarruq (OT) are a matter of concern, particularly in the academic and scholarly world.This study aims to look into the sharia interpretation of classical tawarruq (CT) and organized tawarruq (OT). Thematic analysis is conducted comparing various regulations and market practices of OT in different jurisdictions to elaborate the interpretation of tawarruq variance in the context of Sharia. CT and OT can be adopted with some adaptations and precautionary measures to validate these transaction from both aspects i.e., ‘substance’ and ‘form’ until the time some better solution is devised to substitute current objectionable structure of OT.
Keywords: Ina, Commodity Murabaha (CM), Tawarruq, Organized Tawarruq (OT)