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The present era has witnessed intensive changes in last few decades. The transformation of conventional financial system to Islamic financial system is one of these drastic changes the world has faced. Islamic banking is the major constituent of the Islamic finance. In line with these transformations, Islamic banks and financial institutions are facing several problems due to non-existence of comprehensive framework. However, some prominent issues are convergence issues, stability and regulatory issues, existence of different schools of thought and sensitivity towards role of religion in commercial and financial sector. A careful analysis of these issues can lead to sort out the solutions. The approach to overcome these challenges will determine the future success or failure of the industry. Therefore, this study shed a light on some major challenges that can hinder the progress and benefits of Islamic finance promises.

This study reviews the role of different financial theories such as, trade off theory, pecking order theory and free cash flow theory in the decision making of corporate cash management practices. The review also shed a light on the ground breaking study of Modigliani and Miller (1958) in the field of corporate financial behavior. Majority of the literature depicts the prominence of trade off theory and pecking order theory in the cash management practices of firms. However, some empirical and theoretical studies also described the significance of free cash flow theory. Because, the managers desires to hold the distinctive power in the firm’s financial and investment policies through holding higher cash level. Most importantly, based on the previous empirical findings, this study warrants the need to empirically extent the significance of financial theories in the future at sector level.

The present era has witnessed intensive changes in last few decades. The transformation of conventional financial system to Islamic financial system is one of these drastic changes the world has faced. Islamic banking is the major constituent of the Islamic finance. In line with these transformations, Islamic banks and financial institutions are facing several problems due to non-existence of comprehensive framework. However, some prominent issues are convergence issues, stability and regulatory issues, existence of different schools of thought and sensitivity towards role of religion in commercial and financial sector. A careful analysis of these issues can lead to sort out the solutions. The approach to overcome these challenges will determine the future success or failure of the industry. Therefore, this study shed a light on some major challenges that can hinder the progress and benefits of Islamic finance promises. Keywords: Islamic Banks, Regulatory Framework, Financial Regulation, Governance, Financial Stability, Risk Management JEL Classifications: G21, G28, G32, O16, P15

This study reviews the role of different financial theories such as, trade off theory, pecking order theory and free cash flow theory in the decision making of corporate cash management practices. The review also shed a light on the ground breaking study of Modigliani and Miller (1958) in the field of corporate financial behavior. Majority of the literature depicts the prominence of trade off theory and pecking order theory in the cash management practices of firms. However, some empirical and theoretical studies also described the significance of free cash flow theory. Because, the managers desires to hold the distinctive power in the firm's financial and investment policies through holding higher cash level. Most importantly, based on the previous empirical findings, this study warrants the need to empirically extent the significance of financial theories in the future at sector level. Keywords: Cash Management, Financial Theories, Financial and Investment Policies. JEL Classifications: G32, G02, G11

The present era has witnessed intensive changes in last few decades. The transformation of conventional financial system to Islamic financial system is one of these drastic changes the world has faced. Islamic banking is the major constituent of the Islamic finance. In line with these transformations, Islamic banks and financial institutions are facing several problems due to non-existence of comprehensive framework. However, some prominent issues are convergence issues, stability and regulatory issues, existence of different schools of thought and sensitivity towards role of religion in commercial and financial sector. A careful analysis of these issues can lead to sort out the solutions. The approach to overcome these challenges will determine the future success or failure of the industry. Therefore, this study shed a light on some major challenges that can hinder the progress and benefits of Islamic finance promises. Keywords: Islamic Banks, Regulatory Framework, Financial Regulation, Governance, Financial Stability, Risk Management JEL Classifications: G21, G28, G32, O16, P15

This study reviews the role of different financial theories such as, trade off theory, pecking order theory and free cash flow theory in the decision making of corporate cash management practices. The review also shed a light on the ground breaking study of Modigliani and Miller (1958) in the field of corporate financial behavior. Majority of the literature depicts the prominence of trade off theory and pecking order theory in the cash management practices of firms. However, some empirical and theoretical studies also described the significance of free cash flow theory. Because, the managers desires to hold the distinctive power in the firm's financial and investment policies through holding higher cash level. Most importantly, based on the previous empirical findings, this study warrants the need to empirically extent the significance of financial theories in the future at sector level. Keywords: Cash Management, Financial Theories, Financial and Investment Policies. JEL Classifications: G32, G02, G11

The present era has witnessed intensive changes in last few decades. The transformation of conventional financial system to Islamic financial system is one of these drastic changes the world has faced. Islamic banking is the major constituent of the Islamic finance. In line with these transformations, Islamic banks and financial institutions are facing several problems due to non-existence of comprehensive framework. However, some prominent issues are convergence issues, stability and regulatory issues, existence of different schools of thought and sensitivity towards role of religion in commercial and financial sector. A careful analysis of these issues can lead to sort out the solutions. The approach to overcome these challenges will determine the future success or failure of the industry. Therefore, this study shed a light on some major challenges that can hinder the progress and benefits of Islamic finance promises. Keywords: Islamic Banks, Regulatory Framework, Financial Regulation, Governance, Financial Stability, Risk Management JEL Classifications: G21, G28, G32, O16, P15

This study reviews the role of different financial theories such as, trade off theory, pecking order theory and free cash flow theory in the decision making of corporate cash management practices. The review also shed a light on the ground breaking study of Modigliani and Miller (1958) in the field of corporate financial behavior. Majority of the literature depicts the prominence of trade off theory and pecking order theory in the cash management practices of firms. However, some empirical and theoretical studies also described the significance of free cash flow theory. Because, the managers desires to hold the distinctive power in the firm's financial and investment policies through holding higher cash level. Most importantly, based on the previous empirical findings, this study warrants the need to empirically extent the significance of financial theories in the future at sector level. Keywords: Cash Management, Financial Theories, Financial and Investment Policies. JEL Classifications: G32, G02, G11