Public relation activities in Islamic banking industry

2018 ◽  
Vol 9 (2) ◽  
pp. 283-295 ◽  
Author(s):  
Mohamed Asmy Bin Mohd Thas Thaker ◽  
Hassanudin Bin Mohd Thas Thaker ◽  
Anwar Bin Allah Pitchay
Keyword(s):  
Public Relations ◽  
Economic Model ◽  
Value Orientations ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Cultural Economic ◽  
Content Type ◽  
Banking Institutions ◽  
Role Of Religion

Purpose This paper aims to examine the role of religion in influencing the public relations activity of Islamic banking institutions in Malaysia by adopting circuit of culture (COC) model as theoretical framework. Design/methodology/approach A narrative analysis is used in this study. This analysis has basically involved the application of symbolic interactionist tenets to respective websites and relevant documents of Islamic banks in Malaysia. Findings The paper has identified six Islamic value orientations elements, especially respect for religious authority, affinity with the past, fatalism, communal kinship, attachment to the eternal life and spirituality and idealism relative to public relations practice among the Islamic banks in Malaysia. The study finds that the respective banks are embedded with Islamic values in their communication tools that reflect public relations activity. Research limitations/implications The theme of value orientations that have been generated and used in this study are constantly in flux. There are some other orientations that might be affecting the cultural value of public relations activities of Islamic banking in Malaysia. Furthermore, these value orientations are less effective in identifying dominating cultural factors that can be amended with situational flexibility, as the current study focuses on Malaysian context. Future research is required by incorporating a quantitative means of testing and measuring the effectiveness of website by using cultural-economic model for building. Practical implications The study suggests that public relations researchers should not ignore the vital relationship between religion and public relations activity. The findings of this paper provide Islamic banking institutions to improve and enhance their public relations activity. Originality/value This paper offers an additional literature related to public relations activity by using cultural-economic model. While previous studies have focused on product, brand matters and organization behavior to define cultural and public relation, very little research has been focused on the role of religion in determining public relations activity and cultural pattern. Indeed, no study has been focused explicitly on public relations activity of Islamic banks in Malaysia using COC.

The exploration role of Sharia compliance in technology acceptance model for e-banking (case: Islamic bank in Indonesia)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hardius Usman ◽  
Nucke Widowati Kusumo Projo ◽  
Chairy Chairy ◽  
Marissa Grace Haque
Keyword(s):  
Customer Satisfaction ◽  
Technology Acceptance ◽  
Technology Acceptance Model ◽  
Perceived Usefulness ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Acceptance Model

Purpose The study proposes an extended model of the technology acceptance model (TAM) by including Sharia compliance (SC), knowledge of SC and confidence in SC, in addition to perceived usefulness (PU) and perceived ease of use (PEOU). This research aims to investigate its impact on satisfaction, applied in e-banking of Indonesian Islamic banking. Also, the authors study the role of SC, knowledge of SC and confidence in all relationships in TAM in explaining customer satisfaction. Design/methodology/approach Data collecting in this research is a self-administered survey by sending questionnaires to respondents online via e-mail or WhatsApp. The number of collected data are 300 completed questionnaires. Hypothesis testing and analyses in this research use the multiple linear regression model. Findings This study finds that SC, knowledge about SC and belief in SC have a significant impact on customer satisfaction of Islamic banks using e-banking. The most important finding in this study is that SC, knowledge about SC and belief in SC significantly moderate the relationship between PU and PEOU with customer satisfaction. Originality/value The originality of this research is exploring the role of SC, knowledge of SC and confidence in SC in all relationships, and it is expressed in the original TAM to explain customer satisfaction. This study has never been applied in previous studies, particularly studies of Islamic bank e-banking in Indonesia. This study highlights the importance of SC in the extended TAM, as a distinguishing factor between e-banking provided by Islamic banks and conventional banks, as well as the role of knowledge and confidence in SC. The authors propose policies that will be useful for the improvement of the market share of Islamic banking in Indonesia.

Banking for the poor: the role of Islamic banking in microfinance initiatives

Humanomics ◽  
2008 ◽  
Vol 24 (1) ◽  
pp. 49-66 ◽  
Author(s):  
Asyraf Wajdi Dusuki
Keyword(s):  
Islamic Banking ◽  
Financial Risks ◽  
Islamic Banks ◽  
Content Type ◽  
Special Purpose Vehicle ◽  
The Poor ◽  
Proposed Model ◽  
Intermediary Role ◽  
Institutional Viability

PurposeThe main purpose of this paper is to review the microfinance scheme and discuss how Islamic banks can participate in such an endeavour without actually compromising the issue of institutional viability and sustainability.Design/methodology/approachThe paper is based on an extensive review of microfinance with the objective of building a case for Islamic banking to participate in a microfinance initiative.FindingsAs reviewed in this paper, microfinance requires innovative approaches beyond the traditional financial intermediary role. Among others, building human capacity through social intermediation and designing group‐based lending programmes are proven to be among the effective tools to reduce transaction costs and lower exposure to numerous financial risks in relation to providing credit to the rural poor. This paper also suggests the use of a special purpose vehicle (SPV) as one of the possible alternatives for Islamic banks channelling funds to the poor.Research limitations/implicationsIslamic banks may benefit from the spectrum of Shariah‐compliant sources of funds and offer a wide array of financing instruments catering for different needs and demands of their clients. Furthermore, the use of a bankruptcy‐remote entity like SPV can protect Islamic banks from any adverse effect of microfinance activities.Originality/valueThe analysis here is valuable in drawing the attention of Islamic banking practitioners to the fact that they can actually practise microfinance without undermining their institutional viability, competitiveness and sustainability. This is evident from the proposed model to incorporate SPV into their microfinance initiatives.

The role of religious norms, trust, importance of attributes and information sources in the relationship between religiosity and selection of the Islamic bank

2017 ◽  
Vol 8 (2) ◽  
pp. 158-186 ◽  
Author(s):  
Hardius Usman ◽  
Prijono Tjiptoherijanto ◽  
Tengku Ezni Balqiah ◽  
I. Gusti Ngurah Agung
Keyword(s):  
Information Source ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Traditional Group ◽  
Banking Services ◽  
Content Type ◽  
Conventional Banks ◽  
The Relationship ◽  
Intervening Variables

Purpose This paper aims to examine the assumption used in previous studies that all Muslims adopt and believe the same law on the prohibition of bank interest and to investigate the indirect effect of religiosity on customers’ decision for using Islamic banking services. Design/methodology/approach This study uses an exploratory approach and the natural experimental design with seemingly causal models. A total of 363 questionnaires were distributed to three groups of bank customers, i.e. Islamic banks customers, conventional banks customers and customers of both banks (121 respondents in each group). Findings The results show that the role of religiosity in the customers’ decision for using the Islamic banking services depends on religious norms variable. Religiosity affects the decision of customers in the traditional group, but it does not have any effect for the contemporary group. Other findings suggest that religiosity indirectly affects the decision for using the Islamic banks through intervening variables of trust and information source. Originality/value This is the first paper to investigate the relationship between religiosity and customers’ decision for using the Islamic banking services by considering the religious norm variable. This paper also examines indirect affects of religiosity to the Islamic banks’ choice through intervening variables of trust and information source.

scholarly journals Aplikasi Konsep Wakalah dalam Pembayaran Zakat Simpanan: Kajian di Bank Islam Malaysia Berhad (BIMB)

2019 ◽  
pp. 333-354
Author(s):  
Norazira Sharif ◽  
Hairunnizam Wahid
Keyword(s):  
Economic Development ◽  
Research Question ◽  
Wealth Inequality ◽  
Policy Implications ◽  
Islamic Banking ◽  
Islamic Banks ◽  
The People ◽  
Socio Economic Development ◽  
Banking Institutions

Zakat has played an important role in the socio-economic development of Muslims to reduce income and wealth inequality among the people of a country. The contribution of zakat for savings to the total amount of zakat collected by the zakat institution is still relatively small compared to the collection of income on zakat. The importance of paying zakat among Muslims, especially in term of zakat for saving has been previously debated and various programs have been implemented by the zakat institution to ensure that they are able to carry out their responsibilities by paying zakat. In providing Shariah-compliant products, BIMB has partnered with the zakat institution to assist them to increase the amount of zakat for savings. The research question is to what extent Islamic banking institutions can play a role in helping zakat institutions to increase the amount of zakat in savings. This study is important because there are not many studies related to these aspects, especially the role of Islamic banks in increasing the amount of zakat on savings. The objective of this study is to explore the mechanism that BIMB has put in place to implement the zakat on savings and investment on behalf of the depositors by using the concept of wakalah between depositors and banks. This study has referred to several BIMB reports and unpublished reports to investigate all these aspects. This study found that a comprehensive mechanism do exist for BIMB's role in acting as a representative (al-wakil) in paying zakat on savings on behalf of the client (al-mutawakkil). Several suggestions and policy implications are also discussed in this study. Abstrak Zakat telah memainkan peranan yang penting di dalam pembangunan sosio ekonomi umat Islam untuk memastikan kesaksamaan serta mengurangkan jurang agihan pendapatan dan kekayaan dalam kalangan rakyat di dalam sesebuah negara. Sumbangan zakat simpanan daripada jumlah keseluruhan kutipan zakat dilihat masih lagi secara relatifnya kecil berbanding kutipan zakat pendapatan. Kepentingan membayar zakat terutamanya zakat simpanan telah lama diwar-warkan dan pelbagai program telah dijalankan oleh pihak yang berwajib bagi memastikan golongan yang mampu menjalankan tanggungjawab mereka dengan membayar zakat. Dalam menyediakan produk patuh syariah Bank Islam telah berkerjasama dengan pihak zakat bagi membantu meningkatkan jumlah kutipan zakat simpanan. Persoalan kajian ialah sejauhmanakah institusi perbankan Islam boleh berperanan membantu pihak institusi zakat meningkatkan jumlah kutipan zakat ke atas simpanan. Kajian ini adalah penting kerana tidak banyak kajian yang berkaitan dengan aspek perbankan Islam yang turut sama berperanan meningkatkan jumlah kutipan zakat ke atas simpanan. Objektif kajian ini dilakukan untuk melihat mekanisme yang telah dilancarkan oleh pihak BIMB bagi membayar zakat simpanan dan pelaburan bagi pihak pendeposit mereka menggunakan konsep wakalah di antara pelanggan dan bank. Kajian ini merujuk kepada beberapa laporan Bank Islam dan laporan yang tidak diterbitkan untuk meneliti aspek tersebut. Kajian ini mendapati telah wujud satu mekanisme yang komprehensif peranan BIMB dalam bertindak sebagai wakil (al-wakil) dalam membayarkan zakat ke atas simpanan bagi pihak pelanggan (al-mutawakkil). Beberapa cadangan dan implikasi dasar turut dijelaskan dalam kajian ini.  

Economics of loan growth, credit risk and bank capital in Islamic banks

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Faisal Abbas ◽  
Shoaib Ali
Keyword(s):  
Credit Risk ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Bank Capital ◽  
Content Type ◽  
Loan Growth ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role

PurposeThis study aims to analyze the moderating role of capital on the relationship between loan growth and credit risk for Islamic banks in the post-crisis era.Design/methodology/approachThe study used annual data of 217 Islamic banks from 38 countries and ranges from 2010–2019. The study applies a two-step system GMM method for hypotheses testing about the moderating role of bank capital on the relationship between loan growth and credit risk in Islamic banks.FindingsThe findings showed that an increase in loan growth increases the credit risk of Islamic banks, as evidenced by loan loss provisions, loan loss reserves and nonperforming loans. The results indicate that capital positively moderates the relationship between loan growth and credit risk in Islamic banking. The positive relationship between bank capital and risk-taking is in line with the “regulatory hypothesis” in banking. The findings predict lower impacts of capital on the relationship between loan growth and credit risk in the South Asian region than MENA, Africa, South, East and Central Asia regions. However, the impact of capital is higher for larger Islamic banks than medium and smaller ones.Practical implicationsThe findings of the study add value to the current debate on the role of bank capital to reduce risk-taking in Islamic banks. The study's findings have implications for policymakers, managers, especially in Islamic banking, for improving the Islamic financial system by managing the role of capital, loan growth and credit risk.Originality/valueThis is the first study to explore the moderating role of bank capital on the relationship between loan growth and credit risk in the post-crisis era, especially in Islamic banking. This is the first study in the Islamic banking context, which is providing empirical evidence for the impact of loan growth on the back looking and forward-looking proxies of credit risk under the moderating role of bank capitalization in the post-crisis era. This is the first study, which providing findings based on regions and size to compare the differences in Islamic banks for the impact of loan growth on credit risk under the moderating role of capitalization.

scholarly journals Determinants of low adoption of Islamic banking in Pakistan

2018 ◽  
Vol 9 (3) ◽  
pp. 655-672 ◽  
Author(s):  
Irfan Butt ◽  
Nisar Ahmad ◽  
Amjad Naveed ◽  
Zeeshan Ahmed
Keyword(s):  
Mixed Method ◽  
Consumer Behaviour ◽  
Islamic Banking ◽  
Content Type ◽  
And Cluster Analysis ◽  
Conventional Banks ◽  
Role Of Religion ◽  
Depth Interviews ◽  
Method Approach

Purpose The purpose of this paper is to examine the reasons behind low penetration of Islamic banking in Pakistan. Specifically, the study investigates the differentiation of Islamic banks (IBs) from conventional banks, the role of religion in choosing Islamic banking and the perception of IBs amongst the consumers. Design/methodology/approach The study uses a mixed-method approach, qualitative research along with a survey of users of conventional and Islamic banking. Factor analysis identified underlying dimensions and cluster analysis ascertained the differences between users and non-users of Islamic banking. Inferential statistics were used to test purported hypotheses. Findings The study finds that the users and non-users both perceive that Islamic banking is not completely interest-free. Furthermore, consumers presume that IBs are more of eyewash and are not truly practicing Islamic banking. Moreover, religion is not a major factor that attracts new users but there are also other important factors in marketing Islamic banking, such as service quality, convenience, branch network, etc. Originality/value This is one of the sparse studies in the field of Islamic banking consumer behaviour, which uses focus groups of users and non-users, and in-depth interviews of experts, to identify the issues and factors considered relevant and important by the users rather than relying only on literature review. Furthermore, it also provides a profile of users versus non-users of Islamic banking which is very useful for segmentation and targeting of customers.

scholarly journals A Quantitative Study of the Role Shariah Boards and Bank Ownership Structures Play in Enhancing the Financial Performance of Islamic Banks: A Case of Pakistan

ICR Journal ◽  
2020 ◽  
Vol 11 (2) ◽  
pp. 204-224
Author(s):  
Qaiser Abbas ◽  
Sheila Ainon Yussof ◽  
Muhammad Naeem Anjum
Keyword(s):  
Financial Performance ◽  
Supervisory Board ◽  
Islamic Banking ◽  
Central Feature ◽  
Islamic Banks ◽  
Membership Change ◽  
Supervisory Boards ◽  
Banking Institutions ◽  
Shariah Governance

Shariah governance is a central feature and the second layer of corporate governance for Islamic banks (IBs) and Islamic financial institutions (IFIs). Shariah governance is unique to IBs and IFIs due to their possession of Shariah Supervisory Boards (SSB). SSBs serve to ensure that the management of Islamic banking institutions complies with shariah principles. Shariah governance is not only designed to raise the confidence of investors and the public in terms of authenticity and compliance to Islamic banking practices, but also to minimise the fiduciary and reputational risks of Islamic banking institutions. Due to the importance of shariah governance and the role of SSBs in IBs, this research investigates the role of SSBs in influencing the financial performance of IBs with the moderation role of ownership structure in Pakistan. By using nine years of data (2009-2017) pertaining to three Islamic banks in Pakistan, we found that shariah supervisory board reputations, expertise, cross membership, change in composition, shariah qualification, and ownership have significant moderation relationships with the financial performance of IBs. This study is an attempt to provide a deeper understanding of the role of owners and Shariah Supervisory Boards in enhancing the financial performance of Islamic banks for both researchers and policymakers.

دور الشريعة الإسلامية في ترسيخ مبادئ الحوكمة: مدى إلزامية الوعد في المصارف الإسلامية نموذجاً (The Role of Shariah in Consolidating the Principles of Governance: The Study of the Extent of Mandatory Promise in Islam)

2019 ◽  
Vol 16 (2) ◽  
pp. 137-165
Author(s):  
ميسون قوادري ◽  
عارف علي عارف ◽  
حسن بن إبراهيم الهنداوي
Keyword(s):  
Islamic Law ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Muslim Community ◽  
Community Members ◽  
Banking Institutions ◽  
Descriptive Approach ◽  
The Stability ◽  
Financial Transactions

يشهد العصر الراهن نموا معتبرا في حجم المؤسسات المصرفية الإسلامية؛ ما ترتب عنه زيادة الحاجة للاهتمام بأساليب التنظيم الإدارية والشرعية في هذه المؤسسات؛ لتحقيق أهدافها التي أنشأت من أجلها وتلبية رغبات أفراد المجتمع المسلمين وغير المسلمين ممن يرغبون في التعامل معها؛ لذا يأتي هذا البحث لبيان ماهية الحوكمة الشرعية في المصارف الإسلامية وعلاقتها بنظام هذه المؤسسات والتركيز على مبدأ الوفاء بالوعد وبيان مدى إلزاميته وعلاقته بمبادئ الحوكمة وذلك لإبراز السبق العلمي والدور الأساسي للشريعة الإسلامية في ترسيخ قواعد الحوكمة في جانب من جوانبها وأنها كفيلة باستقرار المعاملات بصفة عامة والمعاملات المالية بصفة خاصة بما تحويه من مبادئ سامية، وسينتهج البحث المنهج التحليلي لتحليل أقوال الفقهاء حول مسألة الوعد الملزم، والمنهج الوصفي لبيان مبادئ الحوكمة، وعلاقتها بمبادئ الشريعة الإسلامية السمحاء. الكلمات المفتاحيّة: الوعد، حكم الوعد، الحوكمة، مقاصد الشريعة الإسلامية، المصارف الإسلامية. Abstract The present epoch is witnessing a significant growth in the Islamic banking institutions, which has led to an increase of need of methods of administrative and legal in these institutions in order to achieve the objectives for which they were established and to meet the desire of Muslim and non-Muslim community members who wish to deal with them. Therefore, this study aims to discuss the essence of Islamic governance in Islamic banks and their relationship to the system of these institutions as well as to focus on the principle of fulfilling the promise and to show the extent of its mandatory and its relationship to the principles of governance. Hence, the study highlights the basic role of Islamic law in consolidating the principles of governance. These kind of principles securing the stability of transactions generally and financial transactions particularly, which containing exalted principles. This study used the analytical approach to analyze the statements of jurists on the issues of binding promise, as well as descriptive approach to explain the principles of governance and its relation to the principles of Islamic law. Keywords: Promise, Governance, The goal of Islamic laws, Islamic banks.

Millennial behavioural intention in Islamic banks: the role of social media influencers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
David Dean ◽  
Dwi Suhartanto ◽  
Ferty Nadya Pujianti
Keyword(s):  
Social Media ◽  
Partial Least Square ◽  
Least Square ◽  
Behavioural Intention ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Behavioural Intentions ◽  
Islamic Bank

Purpose This study aims to examine the role of social media influencers (SMI) in millennial behavioural intentions towards Islamic banks, from the perspective of both bank clients and non-clients. Design/methodology/approach Of the 484 Indonesian millennials in the sample, 278 were clients and 206 non-clients of Islamic banks. Factor analysis was used to examine the SMI dimension in the Islamic banking context. This study then used the partial least square to evaluate the proposed model and test the relationships between SMI, bank image, trust and behavioural intention. Findings Three SMI dimensions were confirmed, i.e. expertise, celebrity and similarity. For bank clients, the findings show that SMI has a significant influence on behavioural intention and reinforces bank image and trust. For non-clients, SMI does not have a significant impact on behavioural intentions but significantly strengthens bank image and trust. Practical implications Islamic bank managers can take benefit of this study findings by learning to foster the behavioural intentions of their millennial clients and non-clients using SMIs. Further, choosing the right SMIs for their Islamic bank is an important activity, and if they want to make a positive impact on existing and potential millennial clients, they need to choose popular millennials who are knowledgeable about the Islamic value compliance of Islamic banking services. Originality/value This study is an early study to explore SMI’s role in influencing the behavioural intentions of millennials towards Islamic banks.

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