From legalism to value-oriented Islamic finance practices

Humanomics ◽  
2016 ◽  
Vol 32 (4) ◽  
pp. 437-458 ◽  
Author(s):  
Zulkifli Bin Hasan
Keyword(s):  
Ethical Issues ◽  
Case Study Research ◽  
Islamic Finance ◽  
Governance System ◽  
Current Form ◽  
Content Type ◽  
Critical Observation ◽  
Governance Practices ◽  
Islamic Financial Institutions

Purpose This paper aims to provide analysis on the state of Islamic finance through critical appraisal on its current form and practices. This paper argues that the current form of Islamic finance practices is due to its legalistic approach and hence requires value-oriented reform. In this regard, Shari’ah governance system can be one of the mechanisms toward such reformation. Design/methodology/approach This paper uses case study research method and comparative studies of other’s works to develop understanding on the extent of Islamic finance practices. The study utilizes descriptive, comparative and critical analysis approaches in extracting and analyzing the information. Findings The literature has indicated the growing frustration of scholars and proponents of Islamic economics on the failure of Islamic finance in addressing the real economic and ethical issues beyond the legal realm of Shari’ah compliance. Legalism leads to a narrow understanding and ignores certain dimensions of Islamic finance practices. Considering all factors and through critical observation, this paper argues that the current form of Islamic finance practices is due to its legalistic approach and hence requires value-oriented reform. At this juncture, the paper suggests that Shari’ah governance system can be one of the mechanisms toward such reformation. Originality/value This paper provides valuable discussion and fresh and recent information on Islamic finance practices, including Shari’ah governance practices of Islamic financial institutions (IFIs) through case studies. The study shares experience of Malaysia in developing its Islamic finance framework and practices from legalistic toward value-oriented approach.

scholarly journals The Roles of Corporate Governance Towards Value-Oriented Islamic Finance Practices

2019 ◽  
pp. 1-17
Author(s):  
Zulkifli Hasan
Keyword(s):  
Corporate Governance ◽  
Case Study Research ◽  
Islamic Finance ◽  
The Social ◽  
Islamic Financial Institutions ◽  
Financial Growth ◽  
Secular Humanist ◽  
Corporate Social ◽  
Business Morality

This paper argues that while significant concerns have been invoked on the material aspects of Islamic finance such as financial growth and products sophistication, it is nevertheless observed that equal emphasizes have not been given on social objectives of Islamic Financial Institutions (IFIs) as part of its value-oriented frameworks. In the absence of extensive discourse on corporate governance and its roles on CSR, this paper attempts to highlight the importance of corporate governance in stimulating the social function of IFIs within the Islamic ethical dimension paradigm. This paper aims at expanding the normative objective function of IFIs by advocating corporate social responsibility (CSR) via strengthening the corporate governance framework. Unlike the western concept of corporate governance, which is based on the western business morality that derived from “secular humanist”, this paper suggests that corporate governance in IFIs is founded on the epistemological aspect of Tawhid, Shari’ah and ethics. This paper employs theoretical and case study research method to develop understanding and to advocate the notion of value oriented Islamic finance practices. The study utilizes descriptive, comparative and critical analysis approaches in extracting and analyzing the information.

scholarly journals The Roles of Corporate Governance Towards Value-Oriented Islamic Finance Practices

2019 ◽  
Vol 27 ◽  
pp. 1-17
Author(s):  
Zulkifli Hasan
Keyword(s):  
Corporate Governance ◽  
Case Study Research ◽  
Islamic Finance ◽  
The Social ◽  
Islamic Financial Institutions ◽  
Financial Growth ◽  
Secular Humanist ◽  
Corporate Social ◽  
Business Morality

This paper argues that while significant concerns have been invoked on the material aspects of Islamic finance such as financial growth and products sophistication, it is nevertheless observed that equal emphasizes have not been given on social objectives of Islamic Financial Institutions (IFIs) as part of its value-oriented frameworks. In the absence of extensive discourse on corporate governance and its roles on CSR, this paper attempts to highlight the importance of corporate governance in stimulating the social function of IFIs within the Islamic ethical dimension paradigm. This paper aims at expanding the normative objective function of IFIs by advocating corporate social responsibility (CSR) via strengthening the corporate governance framework. Unlike the western concept of corporate governance, which is based on the western business morality that derived from “secular humanist”, this paper suggests that corporate governance in IFIs is founded on the epistemological aspect of Tawhid, Shari’ah and ethics. This paper employs theoretical and case study research method to develop understanding and to advocate the notion of value oriented Islamic finance practices. The study utilizes descriptive, comparative and critical analysis approaches in extracting and analyzing the information.

In search of the perceptions of the Shari'ah scholars on Shari'ah governance system

2014 ◽  
Vol 7 (1) ◽  
pp. 22-36 ◽  
Author(s):  
Zulkifli Hasan
Keyword(s):  
Board Members ◽  
Structured Interviews ◽  
Governance System ◽  
Significant Information ◽  
Content Type ◽  
Governance Practices ◽  
Islamic Financial Institutions ◽  
Points Of View ◽  
Source Of Information ◽  
Practical Implications

Purpose – This purpose of this article is to examine the Shari'ah scholars' perception of the Shari'ah governance system in Islamic financial institutions (IFIs) particularly of its six major areas, namely, issues of Shari'ah governance; internal framework; roles and functions of Shari'ah board; attributes of Shari'ah board members on independence, competency and transparency and confidentiality; operational procedures and assessment of the Shari'ah board's performance. Design/methodology/approach – The study conducted semi-structured interviews with Shari'ah scholars who are members of the Shari'ah boards in various IFIs. All interview questions were generated, structured and arranged in a way that all the data could be analysed easily through a coding and thematic approach. Findings – The study discovers the different points of view demonstrated by the Shari'ah scholars who were interviewed on several issues, and they have also conceded that there are serious gaps and weaknesses prevalent in all the six major areas of Shari'ah governance. This position acknowledges that there are shortcomings and weaknesses to the existing governance framework which need further enhancement and improvement. Practical implications – The study offers a useful source of information that may provide relevant guidelines to policymakers and practitioners for future development of Shari'ah governance practices in IFIs. Originality/value – The study provides fresh data and significant information pertaining to the Shari'ah scholars' perspective on the Shari'ah governance system. This analysis of Shari'ah scholars' opinions of the Shari'ah governance system can also serve to enhance the literature on the topic.

Product development in Islamic finance and banking in secular economies

2020 ◽  
Vol 11 (9) ◽  
pp. 1665-1676 ◽  
Author(s):  
Yusuf Dinc
Keyword(s):  
Product Development ◽  
Development Process ◽  
Product Development Process ◽  
Islamic Finance ◽  
Content Type ◽  
Complex Process ◽  
Islamic Financial Institutions ◽  
Conceptual Research ◽  
Source Materials ◽  
Vital Element

Purpose As the global paradigm in economics shifts, Islamic economics is attracting more attention as an alternative sector. The most common and most active institutional structure of Islamic economics is in the form of Islamic finance and banking. Islamic finance and banking have been the centre of innovation in many economies in recent years. In this regard, product development is a vital element in driving the success of Islamic financial institutions (IFIs). The product development of IFIs is one of the key elements of their overall economic performance. This study aims to fill the gap in the literature concerning the product development process of IFIs in secular economies. Design/methodology/approach Verily, product development is a complex process; it is likely that introducing specific models will be useful for expanding the activities of IFIs. In this study, contemporary source materials are used to develop this conceptual research. Findings It suggests two separate methodologies for the product development process of IFIs in secular economies to overhaul two criticised product-based problems. To the best of the author’s knowledge, it is the first attempt to model the product development process for IFIs in a secular economic setup. Originality/value Recently, this study is the first attempt for modelling product development in IFIs under secular economies. Advances in the field of Shari’ah-compliant product development is important for researchers and professional.

Consumer reactions towards femvertising: a netnographic study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ana Marina Lima ◽  
Beatriz Casais
Keyword(s):  
Design Methodology ◽  
Case Study Research ◽  
Female Empowerment ◽  
Women Consumers ◽  
Cultural Changes ◽  
Content Type ◽  
Online Comments ◽  
Consumer Reactions ◽  
Corporate Social

PurposeThis paper identifies consumer reactions towards female empowerment in advertising in order to explore the supporting arguments for criticisms of lack of authenticity and the figuring of sexist stereotypes.Design/methodology/approachThe authors conducted a multi-case study research with content analysis of 905 coded online comments in a video hosting website towards four femvertising campaigns.FindingsResults indicate that femvertising plays an important role in the emotional connection between women and brands, but consumers may react negatively to femvertising when brands do not show knowledge about the real feminist values, maintaining sexist stereotypes. Consumers also blame companies of hypocrite and exploitation to sell products if there is not authenticity and brand-cause fit.Originality/valueFemvertising appears as a consequence of cultural changes and corporate social responsibility in order to engage women consumers. This paper contributes with explanations to sustain the dichotomic reactions towards femvertising, showing evidence of why some people react favourably and other people react negatively.

scholarly journals PERAN PEMBIAYAAN MURABAHAH DALAM MENINGKATKAN USAHA BATU BATA (STUDI PADA BMT AS-SALAM KANTOR KAS NGERECO KANDAT KEDIRI)

1970 ◽  
Vol 5 (1) ◽  
pp. 64-76
Author(s):  
Muh Khoirul Anam ◽  
Haris Santoso
Keyword(s):  
Financial Institutions ◽  
Case Study Research ◽  
Lower Class ◽  
Qualitative Approach ◽  
Study Research ◽  
Islamic Financial Institutions ◽  
Conventional Banks ◽  
Depth Interviews

Financial institutions are currently needed by all people because financial institutions are considered to be quicker in providing business capital loans. Previously, conventional banks were the only financial institutions operating in the financial sector or loans to the community before Islamic financial institutions, now with the development of financial institutions sharia society mostly prefers sharia finance rather than conventional, plus BMT which operates in the middle to lower class, this is what causes many people to take Islamic financial institutions because they prioritize family systems, so this study focuses on: 1). How is the application of murabahah financing at BMT As-Salam to brick businesses in the Ngreco Kandat Kediri village, 2). What is the role of murabahah financing at BMT As-Salam towards brick business in the Ngreco Kandat Kediri village, 3). How did the brick business increase in the Kandat Kediri Ngreco village after obtaining murabahah financing at BMT As-Salam. Research on the role of murabahah financing in brick business uses a descriptive qualitative approach with a type of case study research that refers to the interpretive postpositivistic thinking paradigm. The technique of collecting data is in-depth interviews, observation and documentation. The results of this study indicate that the application of murabahah financing at BMT As-Salam is very different where loans for business capital of bricks that should use mudharabah or musyarakah at BMT These salads use murabaha. Besides that the role of BMT As-Salam is very influential on brick business and before BMT As-Salam arrived, brick entrepreneurs still had difficulty finding capital to improve their business but after taking murabahah financing at BMT As-Salam, their efforts experienced an increase and prosperity life.

The role of the Troika on the Greek central government accounting reforms

2018 ◽  
Vol 31 (3) ◽  
pp. 316-330 ◽  
Author(s):  
Sandra Cohen ◽  
Sotirios Karatzimas
Keyword(s):  
Financial Reporting ◽  
Financial Management ◽  
Central Government ◽  
Case Study Research ◽  
Extreme Case ◽  
Resource Dependency ◽  
Reform Process ◽  
Content Type

Purpose The purpose of this paper is to explore the role of the Troika’s advent played in the progress of the budgeting and the financial reporting systems reform at the Greek central government level. Design/methodology/approach The approach of an extreme country case study is adopted. The data used in the paper have been identified through document analysis performed on the relevant documents produced by the Troika, the Greek Ministry of Finance, and other relevant sources. The reform process is seen through the lens of the neo-institutional theory and the resource dependency theory. Findings Although both reforms targeted the introduction of best international practices – particularly useful in periods of financial distress and scarce resources – the advent of the Troika affected their progress and changed the priorities. As a result, the reform was redirected toward strengthening the cash budgeting system. Research limitations/implications The study is subject to the limitations of an extreme case study research. Practical implications This is a case where resource dependency changes political priorities and directions and affects the evolvement of state budget and accounting reforms under way. Originality/value The role of external fund providers in public sector financial management reform priority-setting, in the case of a developed Eurozone country, is analyzed. The study contributes to the research agenda on accounting practices in times of austerity.

The “comply or explain” principle in the Republic of Slovenia

2018 ◽  
Vol 18 (5) ◽  
pp. 839-857 ◽  
Author(s):  
Danila Djokic ◽  
Mojca Duh
Keyword(s):  
Case Study Research ◽  
Public Companies ◽  
Gradual Improvement ◽  
Content Type ◽  
Regulatory Frameworks ◽  
The Republic ◽  
The Eu ◽  
Comply Or Explain

Purpose This paper aims to provide an overview of the quality of corporate governance (CG) disclosures in the framework of CGS and the “comply or explain” code principle in Slovenia. It aims to observe the differences among companies of the prime, standard and entry markets in terms of the differences in governance standards and regulatory frameworks. Design/methodology/approach This paper analyzes the historical development, legal approach and methods used in the regulation of the “comply or explain” principle in Slovenia. In the 2014 SEECGAN research – Slovenia, we measured the quality of CG by applying the newly created SEECGAN index methodology covering seven segments of CG and assessing 98 attributes. This paper upgrades the results of this research with additional case study research. Findings The analysis from 2011 to 2014 on the “comply or explain” principle showed a gradual improvement of transparency in Slovenian public companies. The 2014 SEECGAN research – Slovenia revealed that the number of specific and high-quality explanations of deviations has increased. The study in this paper showed that the governance practice in some cases is still not in line with code recommendations and does not disclose the deviations from the code. Originality/value Disclosures of the Slovenian public companies are presented for the period 2004-2018. This paper points out the improvements to be realized to change unsatisfactory practices. The measurement of the quality of CG by the 2014 SEECGAN research – Slovenia introduced a methodology, which could be recognized and improved by the EU and/or its member states.

The actualization of maqāṣid al-Sharīʿah in Islamic finance: a conceptual framework

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abu Talib Mohammad Monawer ◽  
Noor Naemah Abdul Rahman ◽  
Ameen Ahmed Abdullah Qasem Al-‎Nahari ◽  
Luqman Haji Abdullah ◽  
Abdul Karim Ali ◽  
...  
Keyword(s):  
Conceptual Framework ◽  
Product Design ◽  
Qualitative Content Analysis ◽  
Group Discussion ◽  
Islamic Finance ◽  
Content Type ◽  
Finance Industry ◽  
Product Consumption ◽  
Islamic Financial Institutions ◽  
Comprehensive Framework

Purpose This paper aims to formulate a conceptual framework that will facilitate the actualization of maqāṣid al-Sharīʿah in product design and consumption within Islamic financial institutions (IFIs). Design/methodology/approach This paper relies on the classical and contemporary literature on maqāṣid al-Sharīʿah and Islamic finance and adopts a qualitative content analysis method and an inductive approach to outline the constituent elements that formulate the framework. Findings This study determines six vital constituents of maqāṣid al-Sharīʿah, namely, parameters of maqāṣid, particular objectives, appropriate means, micro provisions, level of need and legal maxims to develop a conceptual framework of actualizing maqāṣid al-Sharīʿah in Islamic finance. The framework covers the following three stages: identification of maqāṣid, operationalization of maqāṣid in product design and consumption based on maqāṣid. Research limitations/implications This paper proposes a conceptual framework without investigating the practice of any particular industry or products. Further research would focus on formulating a practical framework based on a focus group discussion with industry experts, elaborating the parameters of maqāṣid, scrutinizing the maqāṣid available in the literature by the parameters of maqāṣid and assessing the IFIs’ products and services using the proposed framework. Practical implications This paper provides insights into the importance of maqāṣid elements and the effects of overlooking them on IFIs and customers’ product consumption. Furthermore, a major implication of the proposed framework is to learn how to use the maqāṣid approach as the baseline for designing new financial products. Originality/value The novelty of this paper lies in its pioneering attempt of harmonizing all essential maqāṣid elements and using them as constituents to formulate a comprehensive framework that actualizes maqāṣid al-Sharīʿah in the Islamic finance industry.

Value- based Islamic banking and reporting in Bahrain

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Akhtar Ali Saeed Mohammed ◽  
Fadillah Mansor
Keyword(s):  
Annual Reports ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Reporting Standard ◽  
Content Type ◽  
Islamic Financial Institutions ◽  
Islamic Economic ◽  
Practical Implications ◽  
Specific Contribution

Purpose This paper aims to analyse whether the practices of Islamic banks in Bahrain are in line with value-based Islamic banking (VBIB) and reporting disclosure in the annual reports towards achieving their fundamental objectives of human-centred economic development and social justice. Design/methodology/approach Based on Islamic finance, Islamic economic principles and perception of Maqasid al-Shari’ah, this paper examines and assesses the current practices of Islamic financial institutions (IFIs) in Bahrain through content analysis of financial and annual reports of Islamic banks in Bahrain and interviews of Islamic banking experts. Findings The findings reveal that value-based banking (VBB) has not been translated fully into practice by the Islamic banks in Bahrain. Research limitations/implications The data analysis was restricted to Islamic banks in Bahrain. Practical implications This paper identifies the need for reporting standard development to improve the VBB practice in Bahrain in the future. Looking at the objectives of the IFIs, this paper introduces the concept of VBB in Bahrain, which includes ethical banking, responsible banking and social responsibility. The study adds value not only to the current Islamic finance literature but also helps many stakeholders, including prospective academics, who may conduct comparative studies in different jurisdictions throughout the world. Originality/value The specific contribution of this paper is the identification of the VBB practices and related disclosure in the Islamic banking industry in Bahrain. The study is useful to harmonise and standardise the practices of VBIB by the contemporary Islamic banks in Bahrain.

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