Practice of Pool Management Effect on Profitability: A study of Shariah Compliance and Challenges in Islamic Banking Industry

Islamic banking is covering the major part of Islamic finance. To ensure banking on Islamic laws there are some methods and contracts purposed by shariah. Pool Management is the process to use those contracts and establish the profit distribution by ensuring the shariah laws and regulations. The purpose of this study is to investigate the effect of pool management on profitability under shariah compliance, liquidity management and asset diversification. The study is primary in nature and uses the quantitative research approach to gather and analyze data. Exploratory research is used to examine the independent variables relationship. The target audience for the study is professionals of Islamic banking. The study reveals the weak relationship of liquidity management, furthermore findings also reveals that shariah compliance and asset diversification have a direct relationship with pool management to effect on profitability. The study suggests that diversification in asset portfolio and following of shariah guideline in pool management will lead effect on profitability of bank.