Regulatory compliance and supervisory system of Islamic banks in Mogadishu Somalia

This study focuses on the current regulatory and oversight structure for Islamic banks in Somalia, including their
adherence to and capacity to efficiently supervise that framework. There are many challenges involved in Somalia's move to conventional banking. The banking restrictions in place are insufficient. In order to make suggestions on how to best accommodate this financial system, the purpose of this study was to look into the regulatory and supervisory history of Islamic banking in Somalia. In this study, the importance of depth of experience and individual insight is stressed. Additionally, we used interviews to collect information from clients of the Premier, Dahabshil, Amal, and Salama banks. The study also revealed that Islamic banking has its own set of risks. The two most notable examples are market risks that affect sales-based deals and credit risks that affect P&L transactions. The study also shown how Islamic banking poses significant challenges to the nation's mechanisms for banking regulation and oversight. In the end, bank regulation promotes economic stability by ensuring the safety of depositors' funds and averting systemic breakdowns in the banking industry. Thus, the importance of it to Islamic banking cannot be emphasized. The study indicates that new regulatory and supervisory rules are required since Islamic banking operates on distinct rational grounds than conventional banking.