Maqāṣid al-Sharī‘ah on Islamic banking performance in Indonesia: a knowledge discovery via text mining

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fahmi Ali Hudaefi ◽  
Abdul Malik Badeges
Keyword(s):  
Text Mining ◽  
Qualitative Analysis ◽  
Banking Sector ◽  
Islamic Law ◽  
Numerical Data ◽  
Text Search ◽  
Content Type ◽  
Textual Data ◽  
Search Feature ◽  
Msi Analysis

Purpose In Indonesia, subjective issues towards the fundamental of Islamic banks (IBs) have been arising. For example, they are claimed to be not in line with the Shari‘ah (Islamic law). Furthermore, the existing scholarly works have not much gained knowledge from the local IBs explaining their efforts in promoting maqasid al-Shariah (objectives of Islamic law). Hence, because religiosity drives the fundamental establishment of IBs, this paper aims to explore the knowledge of how IBs in Indonesia promote maqasid al-Shariah via their published reports. Design/methodology/approach This paper performs text mining from 24 official reports of 5 IBs in Indonesia published from 2015 to 2017. The sample contains 7,162 digital pages and approximately 3,021,618 words. Traditional text mining via human intelligence is first performed to analyse for the numerical data required in the maqasid al-Shariah index (MSI) analysis. Furthermore, a computer-driven text mining using the ‘Text Search’ feature of NVivo 12 Plus is conducted to perform qualitative analysis. These approaches are made to gain relevant knowledge of how the sampled IBs promote maqasid al-Shariah from their published reports. Findings The analysis using the MSI explains a quantified maqasid al-Shariah on the sample’s performance, which indictes the lowest and the highest performing banks. Furthermore, a qualitative analysis supports the evidence from the quantitative analysis. It explains the authors’ coding process that results in 2 parent nodes and 20 child nodes, which contain 435 references coded from the sampled unstructured and bilingual texts. These nodes explain the information that associates with maqasid al-Shariah from the IBs’ reports. These findings explain how maqasid al-Shariah is measured mathematically and represent relevant knowledge of how maqasid al-Shariah is informed practically via digital texts. Research limitations/implications A positivist generalisation is neither intended nor established in this study. Practical implications This paper gains relevant knowledge of how the sampled IBs in Indonesia control and maintain the implementation of maqasid al-Shariah from large textual data. Such knowledge is practically important for IBs stakeholders in Indonesia; moreover to help navigate the Shari‘ah identity of Bank Syariah Indonesia (BSI), the new IB established from the merger of 3 state-owned IBs, which are among the sample of this study. Social implications This paper provides evidence that might best challenge the subjective issue of IBs claiming that they are not in line with the Shari‘ah, particularly in Indonesia. Originality/value This paper is among the pioneers that discover knowledge of how IBs promote maqasid al-Shariah in Indonesia’s banking sector via a text mining approach.

Determining banking service attributes from online reviews: text mining and sentiment analysis

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Divya Mittal ◽  
Shiv Ratan Agrawal
Keyword(s):  
Text Mining ◽  
Customer Satisfaction ◽  
Sentiment Analysis ◽  
Banking Sector ◽  
Online Reviews ◽  
Socioeconomic Background ◽  
Content Type ◽  
Customer Reviews ◽  
Banking Service ◽  
The Interest Rate

PurposeThe current study employs text mining and sentiment analysis to identify core banking service attributes and customer sentiment in online user-generated reviews. Additionally, the study explains customer satisfaction based on the identified predictors.Design/methodology/approachA total of 32,217 customer reviews were collected across 29 top banks on bankbazaar.com posted from 2014 to 2021. In total three conceptual models were developed and evaluated employing regression analysis.FindingsThe study revealed that all variables were found to be statistically significant and affect customer satisfaction in their respective models except the interest rate.Research limitations/implicationsThe study is confined to the geographical representation of its subjects' i.e. Indian customers. A cross-cultural and socioeconomic background analysis of banking customers in different countries may help to better generalize the findings.Practical implicationsThe study makes essential theoretical and managerial contributions to the existing literature on services, particularly the banking sector.Originality/valueThis paper is unique in nature that focuses on banking customer satisfaction from online reviews and ratings using text mining and sentiment analysis.

Sharia’h practice at Islamic banks in Pakistan

2018 ◽  
Vol 9 (3) ◽  
pp. 274-289
Author(s):  
Muhammad Tariq Majeed ◽  
Abida Zainab
Keyword(s):  
Risk Sharing ◽  
Banking Sector ◽  
Islamic Law ◽  
Banking Industry ◽  
Supervisory Board ◽  
Primary Data ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type

PurposeIslamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h particularly in terms of provision of interest free services, risk sharing and legal contract. The purpose of this paper is to empirically evaluate the Sharia’h practice at Islamic banks in Pakistan by considering some basic principles of Sharia’h. Design/methodology/approachPrimary data are collected from 63 branches of Islamic banks in Pakistan. Questionnaire is used as an instrument. The study uses structural equation modeling that includes confirmatory factor analysis and regression analysis. Data are codified and analyzed using SPSS and Amos. FindingsThis study finds that Islamic banks are providing interest free services, ensuring that transactions and contracts offered by Islamic banks are legal and offering conflict-free environment to customers. In contrast, estimated results expose that Islamic banks are not sharing risk and Sharia’h supervisory board is not performing its role perfectly. Similarly, it is found that organization and distribution of zakat and qard-ul-hassan are weak at Islamic banks. Research limitations/implicationsData are collected from Islamabad federal capital of Pakistan that hold just 5 per cent share of Islamic banking industry. This small share may not provide true picture of Islamic banking sector. Practical implicationsTo ensure risk sharing, Islamic banking industry must consider the development of new modes of financing and innovation of more products based on Sharia’h. State Bank of Pakistan should ensure separate regulatory framework that enable Islamic banks to provide qard-ul-hassan, organize and allocate zakat. Originality/valueThis paper discusses the perception of bankers, who are actually the executors, about Shariah’s practices at Islamic banks in Pakistan. There are not many discussions on this topic that could be found, and hence this could be considered as a significant contribution by this paper to the existing literature of Islamic finance.

Do Islamic banks need to earn extra profits?

2019 ◽  
Vol 10 (3) ◽  
pp. 369-381 ◽  
Author(s):  
Yasushi Suzuki ◽  
S.M. Sohrab Uddin ◽  
Pramono Sigit
Keyword(s):  
Banking Sector ◽  
Islamic Law ◽  
Comparative Approach ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Banking Market ◽  
Conventional Banks ◽  
Credit Portfolio

Purpose This paper aims to draw upon existing debate over “financial sector rent” (bank rent) to analyze the current pattern of financing of Bangladeshi and Indonesian Islamic banks during the period of 2011 and 2015. Design/methodology/approach The empirical evidence through a comparative approach of analyzing the performance of Islamic banks with that of conventional banks in respective countries – two of the largest countries where majority of the population are Muslims – is drawn to demonstrate the objective. Findings While Islamic banks in Bangladesh are primarily concentrating on the murabaha (mark-up contract) mode of financing, some transactions under musharaka (partnership/equity-based contract) are observed in the Indonesian Islamic banking sector. This anomaly in Indonesia can be explained by the nature of their musharaka financing which is not of the purely “participatory” financing type. As a result, we can observe the quasi-murabaha syndrome in Indonesian Islamic banking sector. The concentration of asset-based financing including consumers’ financing (hire purchase) in the credit portfolio gives Islamic banks relatively higher Islamic bank rent opportunity for protecting their “franchise value” as Sharīʿah-compliant (Islamic law-compliant) lenders. However, Indonesian Islamic banks share a still infant Islamic banking market, and enjoy less rent opportunity under a severe competition with conventional banks. Research limitations/implications The bank rent approach suggests that the syndrome observed both in Bangladesh and Indonesia can be ironically justifiable. Moreover, the mode of profit-and-loss sharing provides, in practice, an idea of the difficulty in managing the participatory financing embedded with high credit risk. Under this scenario, it is necessary for Islamic scholars and the regulatory authority to design an appropriate financial architecture, enabling Islamic banks to avail the benefit from a wider variety of Sharīʿah-based Islamic financing. Originality/value This paper expands the newly emerged concept of “Islamic bank rent” to make sense of the murabaha syndrome in Bangladesh and the quasi-murabaha syndrome in Indonesia. This approach also contributes to clarifying the unique risk and cost to be compensated with the spreads that Islamic banks are expected to earn.

scholarly journals Beyond the triple bottom line: Prosperity, People, Planet, and Prophet in Islamic banking

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
M. Luthfi Hamidi ◽  
Andrew C. Worthington
Keyword(s):  
Organizational Performance ◽  
Financial Distress ◽  
Banking Sector ◽  
Islamic Law ◽  
Triple Bottom Line ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Bottom Line ◽  
Content Type ◽  
Stakeholder Perspective

Purpose This paper aims to extend the existing triple bottom line framework (Prosperity, People and Planet [so-called 3Ps]) with a new dimension, namely, Prophet, to reflect Islamic values (the now 4Ps) for banks seeking compliance with Islamic religious principles. Design/methodology/approach This study conducts a survey of 504 Islamic bank stakeholders across six provinces in Indonesia and use regression analysis to test the applicability of the 4Ps. This paper further examines their application in two large Islamic banks in Indonesia and Malaysia. Findings The models are all highly significant and well reflect a broad stakeholder perspective on bank performance. Of the four elements, this study finds stakeholders rank Prosperity first, followed by Prophet and then Planet. The case studies strengthen the application of the new Prophet dimension as a way for Islamic banks to improve their financial, social and economic performance, particularly during periods of financial distress. Research limitations/implications This study only uses survey data from a single country, and this may limit the generalizability of the findings. Practical implications Practitioners will find the quadruple bottom line useful in assessing organizational performance, as will regulators seeking to improve the social and economic outcomes of the Islamic banking sector. Originality/value This paper internalises maqasid al-syari’ah (the most basic goal of Islamic law) as a simple but essential approach to organizational performance using empirical evidence from a real-world banking setting.

Basel Capital Adequacy Ratio Standard in The Light of Islamic Law Perspective

2016 ◽  
Vol 1 ◽  
pp. 308-317
Author(s):  
Adi Rahmanur Ibnu
Keyword(s):  
Financial Crises ◽  
Global Economy ◽  
Banking Sector ◽  
Islamic Law ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Minimum Capital ◽  
Capital Adequacy Ratio ◽  
Global Banking ◽  
Banking Development

Bank is one of the most important pillars of economy activities. However, banking sector has a real potential crisis threat. Alongside with the steady current global banking development, financial crises that have happened clearly affected global economy. Based on that situation, BIS (Bank for International Settlement) – an international financial standard setting organization, realizes the urgency to establishan international financial standard and supervision to anticipate future potential financial crises. This research aims to identify how Capital Adequacy Ratio Standard in Basel Capital Accord (II) based on Islamic law perspective. The research is conducted by analyzing Basel Capital Accord published by BIS. The research uses library research method to find out the aimed result. The focus is on the 1st pillar of Basel II publication that is Minimum Capital Requirements (CAR) policy. CAR, as an Islamic economics policy, will be analyzed using falāḥ approach. Falāḥ is an Islamic economics objective that consists of happiness, success, accomplishment or good luck concept. The earthly dimension of falāḥ has some parameters that can be used to analyze Islamic economics policy. Additionally, the Islamic fiqh maxim takes part in analyzing the policy. The maṣlaḥat concept in fiqh maxim approach shares aim with falāḥ concept in the sense that all of sharia law aims for success, happiness, eternal survival etc. The maṣlaḥat can be accomplished by extinguishing mafsadat or seizing maṣlaḥat. The maṣlaḥat aspect is essential to determine the compatibility Basel Capital Accord with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl). The conclusion results are, 1) Basel Capital Accord focuses on macro-prudential aspect in order to anticipate potential financial crises, 2) beneficial/interest (maṣlaḥat) aspects of the hereafter, cooperation principle, justice, fairness and the prohibition of exploitation are not the core value of Basel Capital Accord frame work, thus 3) the achievement of maslahat as intended by sharia i.e. jurisprudential maxim are not convincing. Therefore, 4) Basel Capital Accord as a regulation basis is not in line with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl).

scholarly journals An academic perspective on the entrepreneurship policy agenda: themes, geographies and evolution

2019 ◽  
Vol 9 (1) ◽  
pp. 65-93 ◽  
Author(s):  
Alberto Arenal ◽  
Claudio Feijoo ◽  
Ana Moreno ◽  
Cristina Armuña ◽  
Sergio Ramos
Keyword(s):  
Text Mining ◽  
Research Agenda ◽  
Academic Research ◽  
Policy Research ◽  
Policy Agenda ◽  
The European Union ◽  
Entrepreneurship Policy ◽  
Research Activity ◽  
Content Type ◽  
And Shifts

Purpose Academic research into entrepreneurship policy is particularly interesting due to the increasing relevance of the topic and since knowledge about the evolution of themes in this field is still rather limited. The purpose of this paper is to analyse the key concepts, topics, trends and shifts that have shaped the entrepreneurship policy research agenda during the period 1990–2016. Design/methodology/approach This paper uses text mining techniques, cluster analysis and complementary bibliographic data to examine the evolution of a corpus of 1,048 academic papers focused on entrepreneurship-related policies and published during the period 1990–2016 in ten relevant journals. In particular, the paper follows a standard text mining workflow: first, as text is unstructured, content requires a set of pre-processing tasks and then a stemming process. Then, the paper examines the most repeated concepts within the corpus, considering the whole period 1990–2016 and also in five-year terms. Finally, the paper conducts a k-means clustering to divide the collection of documents into coherent groups with similar content. The analyses in the paper also include geographical particularities considering three regional sub-corpora, distinguishing those articles authored in the European Union (EU), the USA and South and Eastern Asia, respectively. Findings Results of the analysis show that inclusion, employment and regulation-related papers have largely dominated the research in the field, evolving from an initial classical approach to the relationship between entrepreneurship and employment to a wider, multidisciplinary perspective, including the relevance of management, geographies and narrower topics such as agglomeration economics or internationalisation instead of the previous generic sectorial approaches. The text mining analysis also reveals how entrepreneurship policy research has gained increasing attention and has become both more open, with a growing cooperation among researchers from different affiliations, and more sophisticated, with concepts and themes that moved the research agenda forward, closer to the priorities of policy implementation. Research limitations/implications The paper identifies main trends and research gaps in the field of entrepreneurship policy providing actionable knowledge by presenting the spectrum of both over-explored and understudied research themes in the field. In practical terms the results of the text mining analysis can be interpreted as a compass to navigate the entrepreneurship policy research agenda. Practical implications The paper presents the heterogeneity of topics under research in the field, reinforcing the concept of entrepreneurship as a multidisciplinary and dynamic domain. Therefore, the definition and adoption of a certain policy agenda in entrepreneurship should consider multiple aspects (needs, objectives, stakeholders, expected outputs, etc.) to be comprehensive and aligned with its complexity. In addition, the paper shows how text mining techniques could be used to map the research activity in a particular field, contributing to the challenge of linking research and policy. Originality/value The exploratory nature of text mining allows us to obtain new knowledge and reveals hidden patterns from large quantities of documents/text data, representing an opportunity to complement other qualitative reviews. In this sense, the main value of this paper is not to advise on the future configuration of entrepreneurship policy as a research topic, but to unwrap the past by unveiling how key themes of the entrepreneurship policy research agenda have emerged, evolved and/or declined over time as a foundation on which to build further developments.

scholarly journals Investigation on firm efficiency: evidence from selected Asia-Pacific countries

2018 ◽  
Vol 25 (8) ◽  
pp. 3062-3080 ◽  
Author(s):  
Khar Mang Tan ◽  
Fakarudin Kamarudin ◽  
Amin Noordin Bany-Ariffin ◽  
Norhuda Abdul Rahim
Keyword(s):  
Technical Efficiency ◽  
Small Firms ◽  
Banking Sector ◽  
Profit Maximization ◽  
Asia Pacific ◽  
Scale Efficiency ◽  
Scale Level ◽  
Firm Efficiency ◽  
Content Type ◽  
Parametric Data

Purpose The purpose of this paper is to examine the firm efficiency or technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) in the selected developed and developing Asia-Pacific countries. Design/methodology/approach The sample consists of a sum of 700 firms in selected developed and developing Asia-Pacific countries over the period from 2009 to 2015. The non-parametric data envelopment analysis under the production approach is used to investigate firm efficiency. Findings On average, this paper discovers that the firms in selected Asia-Pacific countries are moderately efficient. Scale inefficiency (SIE) is found to be the dominant source of firms’ technical inefficiency. The analysis of return to scale shows that the large firms tend to operate at decreasing return to scale level, while the small firms tend to operate at increasing return to scale level. Practical implications The findings from this paper provide significant insights to the policy makers and firm managers in promoting the efficient firms of Asia-Pacific countries. Originality/value The present paper conducts a critical analysis on return to scale in the firms sector of Asia-Pacific context, which is ignored by the past studies on firm efficiency since the analysis of return to scale is mostly emphasized on banking sector. The precise nature of SIE is important for a firm to be efficient in achieving the firm’s primary goals of profit maximization and sustaining market competitiveness.

scholarly journals Muḍārabah and mushārakah as micro-equity finance: perception of Selangor’s disadvantaged women entrepreneurs

2020 ◽  
Vol 12 (2) ◽  
pp. 217-237
Author(s):  
Reazul Islam ◽  
Rubi Ahmad
Keyword(s):  
Women Entrepreneurs ◽  
Structural Equation ◽  
Islamic Law ◽  
Profit Sharing ◽  
Equity Financing ◽  
Content Type ◽  
Disadvantaged Women ◽  
Poor Women ◽  
Microfinance Institution ◽  
Equity Finance

Purpose This study aims to gain the perception of Selangor’s disadvantaged women on the Sharīʿah (Islamic law) rules on two micro-equity financing instruments, namely, muḍārabah (profit sharing) and mushārakah (profit-and-loss sharing) (M&M). Design/methodology/approach A survey was carried out in the rural area of Selangor district in Malaysia by administering a self-generated structured questionnaire. A total of 330 completed questionnaires were retrieved from the members of an Islamic microfinance institution (IsMFI), namely, Amanah Ikhtiar Malaysia (AIM). The data were analysed by using structural equation modelling. Findings The female borrowers of AIM perceive the Sharīʿah rules of M&M requiring high moral and ethical values and diligent repayment performance. They are aware of some other underlying provisions such as business liquidation, share transfer, information discloser and business termination. The overall findings of this study suggest that the perceived Sharīʿah rules are akin to those that are commonly used in general partnership businesses between Muslims. It also indicates that disadvantaged entrepreneurs would accept the rules that are easy to comprehend as well as favourable to their interests. It further suggests that respondents’ experiences of microfinance and business operation do not have a significant influence on their perception of M&M instruments. Research limitations/implications This study was limited to Selangor. So, the perception of Muslim women surveyed may not represent the views of all women in Malaysia. However, it can offer a primary understanding of the said issue. Practical implications The findings of this study can help IsMIFs take initiatives to offer M&M as micro-equity finance to poor women entrepreneurs. Originality/value So far, limited studies have been carried out on M&M-based microfinancing. This paper offers new insights presenting disadvantaged women entrepreneurs’ perception of these financing instruments.

Consequences of corporate social responsibility on employees

2019 ◽  
Vol 49 (1) ◽  
pp. 231-249
Author(s):  
Evans Asante Boadi ◽  
Zheng He ◽  
Eric Kofi Boadi ◽  
Josephine Bosompem ◽  
Philip Avornyo
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Social Exchange ◽  
Structural Equation ◽  
Social Exchange Theory ◽  
Banking Sector ◽  
Work Motivation ◽  
Content Type ◽  
Time Lagged ◽  
Corporate Social

Purpose The purpose of this paper is to draw on affect social exchange theory and related literature to develop and test a research model linking employees’ perception of corporate social responsibility (CSR) to their outcomes [performance and organisational pride (ORP)] with moderating variables: perceived work motivation patterns (autonomous and controlled motivation) to sustain firm’s operations through their employees. Design/methodology/approach The authors used Ghana as a case for this study due to recent turbulences in the banking sector of Ghana. A sample data of 244 subordinate/supervisor dyads from rural and community banks was collected with a time-lagged technique and analysed through a structural equation modelling for this study. Findings These employee’s perceptions of CSR positively related to their performance and ORP. Autonomous motivated employees had a stronger positive moderated impact on perceived CSR-Performance link whereas controlled motivated employees recorded a stronger impact on perceived CSR-ORP link. Practical implications Based on these results, managers and human resource (HR) professionals can aim at acquiring favourable employees’ perception of their firms’ CSR initiatives. In that, it can help firms to remain in business particularly in difficult times. Also, autonomous and controlled motivators may seem inversely related, however, they are not contradictory to each other. Both can coexist within a firm and it is crucial that HR professionals and managers endeavour to balance them discreetly to attain organisational goals. Originality/value Despite the growing interest in CSR across continents, CSR outcomes on employees among small and medium scale firms especially in Africa has fairly been toned-down by respective management of firms, governments and researchers.

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