ASSET-LIGHT HYBRID SUKUK: LESSONS FROM INTERNATIONAL MARKETS FOR PAKISTAN'S RIBA-FREE ECONOMIC TRANSFORMATION
Khawaja Masood Razaa, Imran Abdul Azizb, Muhammad Asimc
- aManagement Sciences Department, Al-Kawthar University, Karachi, Pakistan
- bVisiting Faculty – KSBL / IoBM, Karachi, Pakistan, Head of Sales-Spectrum Securities Ltd
- cWing Head - Treasury Operations - NBP Islamic, Visiting Faculty – KUBS – University of Karachi, Pakistan
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Abstract
The role of Global Practices and Regulatory Readiness in Market Development and Riba Transformation in the context of Asset Light Hybrid Sukuk has been examined in this study and the moderating effect of Institutional Support has been analyzed in this study. A cross-sectional design was employed to collect data from 400 professionals from different regulatory agencies, Islamic financial institutions, capital-market organizations, institutional investors and academia. PLS-SEM was used to analyze the model. It was found that Global Practices and Regulatory Readiness had a significant impact on Market Development, which in turn affected Riba Transformation. Both Market Development and Institutional Support mediated both relationships, and Institutional Support amplified the impact of Market Development on Riba Transformation. The model was shown to be reliable, valid, explanation and predictive. The study reveals that coordinated regulation, institutional commitment, market liquidity, standardization of structure and investor participation are all essential for a successful and a riba-free transition in Pakistan.