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Synopsis As the Islamic banking industry grows, challenges faced by it also grow at a faster pace. Many public policy issues have been raised in the jurisdictions in which they operate and at the international organizations, international standard setters, national regulatory authorities, policymakers, and academia to examine various aspects of Islamic financial intermediation, each from their own perspective. The main objective is to build uniform risk management practices and arrive at a standard regulatory framework governing them. The establishment of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), International Islamic Rating Agency (IIRA), Islamic Financial Services Board (IFSB), and the Liquidity Management Center was aimed at achieving this objective. The main issues of concern are: the divergence between theory and practice, need for Islamic financial institutions to adapt to their environment to compete with conventional counterparts, combination of each institution’s Shariah board and local legal tradition and interpretations with the market’s competitive pressure to shape the activity of each Islamic financial institution, need for IFIs to comply with the regulations governing conventional financing, etc. Shariah compliance and PLS depositors’ protection are two important special Islamic features. Hence the corporate governance issues take a special place in Islamic banks. The role of Islamic promoters is mainly to design, support, implement, discuss, monitor and evaluate Shariah compliant alternatives to conventional banking. We hope this book would be helpful for the readers to obtain the necessary insight into the prudential regulatory norms that are currently available and the necessary changes that need to be brought about in future.