Main Article Content
Following the issuance of Law (No. 1 of 2013) by the General National Congress at a crucial time when the country was undergoing administrative, political, and economic upheaval, banks operating in Libya are now called Islamic banks. It made the transition from traditional to Islamic banking in Libya is challenging. This study intends to identify the obstacles faced by Libyan banks in transition to Islamic banks. A content analysis is a method used for analyzing data gathered from past studies, articles, publications, and legislation published by the Libyan government. The findings revealed that the most important of which is that one of the challenges in Libya's shift from traditional banks to Islamic banks has been the ineffectiveness of Islamic bank legal and legislative regulation, the country's legislative and executive authority being divided and fragmented, control the armed group on the most Libyan Central Bank operation, the political split, the lack of propaganda operation proceed the process of transformation are the prevailing obstacles that encounter Libyan transformation from traditional banking into Islamic banking.