THE LIQUIDITY SHORTAGE IN ISLAMIC BANKS: AN EXPLORATORY STUDY OF SAUDI ISLAMIC BANKS

Abstract

This study focused on the reasons for the liquidity problems and clarified its impacts on the Islamic banks and its performances. Regarding the study method, this study is known as a phenomenology and pure qualitative study that seeks in a recent phenomenon. The semi-structure interview was used which common in qualitative measurement with many scholars in the Islamic financial system and the experts in the same context in order to go deeper into the problems and see their roots. These interviews designed to meet the research objectives and to answer all the research questions. This study concluded that Islamic banks in Saudi Arabia have to improve their performances and instruments in many ways in order to serve the clients and the economy in a better way. In addition, the study showed that the Sukuk market in the Kingdom of Saudi Arabia was very weak and need for more improvement. Another finding may be clear in the experience that done in Sudan which may help all Islamic banks to corporate together and come up with a strategy that is applicable to the sharia rule and in the same way it can help the liquidity enhancement among these banks