The purpose of this paper is to analyse key reasons as to why Islamic banks use special purpose vehicles (SPVs) within their transactions, from the perception of industry practitioners.
This research uses a qualitative methodology, and the Kingdom of Bahrain as a case study. Thirty-five industry practitioners (interviewees) took part in this study, where face-to-face semi-structured interviews were conducted to obtain interviewee feedbacks.
The findings reveal that shareholding and bankruptcy remote structures, regulatory and compliance, taxation, legal and Shari’a compliance aspects are among key reasons for Islamic banks to routinely use SPVs within their transactions.
The findings in this research are limited to the Islamic banking industry in the Kingdom of Bahrain. Separate studies are required for different jurisdictions pertaining to the same matter, or for comparative purposes.
This study contributes to knowledge by providing perspectives of industry practitioners in the Kingdom of Bahrain.
