The effects of the financial crisis have to be considered by the policy makers while making plans for the future and improving the management systems internal to the organizations. It is important that banking and financial sector of the gulf economies have to be transformed and integrated in to the main stream financial system of the globe. It is, therefore important that the challenges in these economies are identified and the future prospects are determined with reference to the resources available to the economies for dealing with the challenges. In this regard, past experiences regarding failure of the banking industry have to be truly accounted for. The system of Islamic banking has spread from the gulf region and entered the practice of banking of the other developed countries in the world, such as Australia, the United Kingdom, the United States of America and Canada (Venardos, 2006). After the financial crisis, this system has become more concerned about the ethical values of financial transactions and has simultaneously increased its flexibility; so as to compete with the conventional interest based financial system. As a whole, the banking and finance industry in the gulf region has undergone certain developments and has become an exemplary finance practice in the global market (Khan and Bhatti, 2008).