As part of IFB fast Global growth, leaders in Ethiopia are responsible to remain competent to run Sharia-compliant products irrespective religion. In this regard the research aimed at assessment of leadership gaps and challenges in the implementation of IFB in Ethiopia. An exploratory research design is applied, with mixed research approach. Census sample strategy is utilized to choose banks, with the purposeful exclusion of banks that do not provide IFB services. Sample units of 75 managers were conveniently drawn, and the content of the responses and documents was thoroughly analyzed quantitatively and qualitatively, SPSS is used to tabularize the data summary and presentation. The analyses and interpretation yielded perception, knowledge, legal, and project management gaps and challenges: attention given by leaders to IFB found very minimal, leaders and employee lacks IFB personality and appearance, it happens in some cases due to fear of the unknown tailored to the IFB. Sustainable training and development programs are not placed properly, there lacks adoption of appropriate technology. The legal framework of IFB viewed through the lens of a typical conventional context. Leadership along the hierarchy should cultivate personality that favor to the success of IFB, perception should be surveyed to rectify and leaders should involve to IFB decision making to create IFB-friendly atmosphere that reflects its values. It requires to craft rigorous and diverse training program and public awareness. Establish a clear IFB institutional structure with appropriate technology adoption. NBE should look for ways to adopt internationally accepted IFB standards, reinforce and revisiting the current NBE directives and legal framework