Tier 2 Capital Instruments under Basel III: A Sharīʿah Viewpoint

2018 ◽  
Vol 32 (3) ◽  
pp. 205-241
Author(s):  
Madaa Munjid Mustafa ◽  
Beebee Salma Sairally ◽  
Marjan Muhammad
Keyword(s):  
Secondary Data ◽  
Islamic Banking ◽  
Basel Iii ◽  
Tier 2 ◽  
Regulatory Capital ◽  
Regulatory Requirements ◽  
Library Research ◽  
Islamic Jurisprudence ◽  
Banking Institutions

Abstract Basel III has redefined the criteria for regulatory capital instruments. Accordingly, Islamic banking institutions (IBIs) have to consider the issuance of instruments that would meet both the objectives of Basel III and Sharīʿah requirements. This research particularly aims to compare the regulatory requirements for issuing Tier-2 (T2) capital instruments as defined by Basel III, Bank Negara Malaysia (BNM) and IFSB-15. In this regard, the research examines the Sharīʿah issues related to subordination and conversion arising in exchange-based contracts (such as murābaḥah and iǧārah ṣukūk) and equity-based contracts (such as muḍārabah and wakālah ṣukūk). The study relies on library research to collect secondary data in the form of classical works of Islamic jurisprudence, analyses such work and links it with the present day regulatory requirements. The study finds that there are Sharīʿah concerns over the use of exchange-based contracts. However, the use of convertible muḍārabah and wakālah ṣukūk could be justified.

Additional Tier 1 Capital Instruments under Basel iii: A Sharīʿah Viewpoint

2016 ◽  
Vol 30 (2) ◽  
pp. 138-162
Author(s):  
Beebee Salma Sairally ◽  
Marjan Muhammad ◽  
Madaa Munjid Mustafa
Keyword(s):  
Financial Services ◽  
Reference Point ◽  
Abu Dhabi ◽  
Islamic Banking ◽  
Basel Iii ◽  
Islamic Banks ◽  
Regulatory Capital ◽  
Islamic Bank ◽  
Tier 1 ◽  
Banking Institutions

This research aims to compare the regulatory capital instruments for Islamic banking institutions (ibis)—in particular the qualifying Additional Tier 1 (AT1) capital instruments—as defined by Basel iii, Bank Negara Malaysia (bnm) and ifsb-15 (issued by the Islamic Financial Services Board). Principally, the research examines the Sharīʿah issues, especially related to subordination, arising in equity-based contracts when used for structuring AT1 capital instruments. In particular, it examines the muḍārabah ṣukūk issued by the Abu Dhabi Islamic Bank (adib) in 2012. The study finds that the most appropriate Sharīʿah contract that would be suitable for structuring AT1 capital instruments would be mushārakah. The present study is considered an original attempt in examining an under-researched topic relating to Basel iii and its Sharīʿah perspective. The study will be an important reference point to Islamic banks when structuring AT1 capital instruments.

APPLICATION OF AKAD IJARAH ISLAMIC LAW IN THE AL-QUR'AN

ISLAMIKA ◽  
2020 ◽  
Vol 14 (1) ◽  
pp. 1-11
Author(s):  
Ade Jamarudin ◽  
Ofa Ch Pudin
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Financial Institution ◽  
Field Research ◽  
Secondary Data ◽  
Research Field ◽  
Islamic Banking ◽  
Library Research ◽  
Human Labor ◽  
Leasing Company

Ijarah is a contract on the transfer of goods or services with rewards instead. Ijarah based transactions with the displacement benefit (rights to), not transfer of ownership (property rights), there ijara financing translates as buying and selling services (wages hired), that take advantage of human power, there is also a translate lease, which take advantage of goods. Application ijarah growing financial institutions in the current Shari'ah is happening on the leasing company (financial institution based on Islamic teachings, as well as Islamic banking is one of the products in Islamic finance. Application ijarah emerging financial institutions shari'ah 'ah at the moment that is happening on the leasing company (financial institution based on Islamic teachings, as well as Islamic banking is one of the Islamic financing products). This research is a library research (library research) and field research (field research), and is descriptive, analytic and comparative. Data sources used in this study are sourced from primary and secondary data. Ijarah transactions are based on the transfer of benefits (use rights), not the transfer of ownership (ownership rights), some translate ijarah financing as the sale and purchase of services (wage wages), i.e., taking the benefits of human labor

scholarly journals 'MAQASID AL-SHARIAH' IN ISLAMIC BANKS BEFORE VALUE-BASED INTERMEDIATION IMPLEMENTATION

2021 ◽  
Vol 18 (2) ◽  
pp. 173-189
Author(s):  
Sharifah Faigah Syed Alwi ◽  
◽  
Fateha Abd Halim ◽  
Tengku Dewi Ahdiyaty Tengku Ahmad Mazlin ◽  
Aizurra Haidah Abdul Kadir ◽  
...  
Keyword(s):  
Qualitative Methodology ◽  
Islamic Law ◽  
Human Life ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Structured Interviews ◽  
The Public ◽  
Library Research ◽  
Banking Institutions ◽  
Banking Operations

Bank Negara Malaysia (BNM) had introduced Value-Based Intermediation (VBI) initiatives to help Islamic banks implement a structuralised form of maqasid al-shariah (objectives of shariah (Islamic law)) in their banking operations. Thus, questions were raised by the public on whether or not Islamic banking institutions in Malaysia had been achieving maqasid al-shariah in their banking operations prior to VBI. This paper aims to discuss the real concept of maqasid al-shariah that should be realised in Islamic banks and investigate whether Islamic banks had truly been achieving maqasid al-shariah in their banking operations before the introduction of VBI. Library research is conducted to obtain information on maqasid al-shariah and the qualitative methodology is adopted to gain information from three bankers representing three Islamic banks in Malaysia via semi-structured interviews. The researchers found that the fundamental concept of maqasid al-shariah in Islamic banks includes the protection of religion, life, intellect, progeny and wealth in human life through the products and services offered by the banks. The Islamic banks were found to have developed their products and services to achieve maqasid al-shariah even before VBI was introduced by BNM. However, with VBI, a proper framework in achieving maqasid al-shariah has been developed.

scholarly journals The Good and Bad News about the New Liquidity Rules of Basel III in Islamic Banking of Malaysia

2019 ◽  
Vol 12 (3) ◽  
pp. 120
Author(s):  
Shazleena Mohamed Zainudin ◽  
Siti Zaleha Abdul Rasid ◽  
Rosmini Omar ◽  
Rohail Hassan
Keyword(s):  
Banking Sector ◽  
Secondary Data ◽  
Islamic Banking ◽  
Present System ◽  
Basel Iii ◽  
Policy Makers ◽  
Coverage Ratio ◽  
New Horizons ◽  
Regulatory Guidelines ◽  
Unique Framework

How has Basel III (Bank for International Settlements), regarding the computation, measurement, and management of the liquidity coverage ratio (LCR), vitalized the Islamic banking sector in emerging economies? Vice versa, what is the Islamic banking sector’s capacity to respond in embracing Basel III? This study aims to review the current issues faced by a bank as it discusses the current regulatory guidelines and operational challenges in implementing the system. Based on the implementation of LCR preliminary secondary data of Malaysian banks between 2010 and 2016, this study finds that the readiness of LCR system implementation in the Islamic banking industry is currently low because LCR is still relatively new for all financial institutions and vendors. There is a huge gap between the present system infrastructure of the banks and the LCR model requirements as defined by BNM (Bank Negara Malaysia) under Basel III. Nevertheless, this finding opens new horizons of understanding and practically offers further investigations for the whole banking sector in Malaysia. Thus, policy makers, regulators, and industry players should utilize a unique framework for Islamic banks when strategizing liquidity risk management.

Implementasi Maqashid Syariah Dalam Pelayanan Custumer Service Bank Syariah (Studi Pada BNI Syariah KC Medan)

2020 ◽  
Vol 20 (1) ◽  
pp. 83-91
Author(s):  
Supaino Supaino
Keyword(s):  
Data Analysis ◽  
Customer Service ◽  
Random Sampling ◽  
Qualitative Data ◽  
Secondary Data ◽  
Sampling Technique ◽  
Islamic Banking ◽  
Library Research ◽  
Collection Methods ◽  
Qualitative Data Collection

AbstractMaqashid al-sharia consists of two, namely maqaṣid and sharia. Maqashid means intention or purpose. The purpose (maqashid) can be achieved by means of taklif, and its implementation depends on the ability to understand the main sources of law, both Al-Qur'an and hadith.The purpose of this research with the title the implementation of maqhasid sharia in services at Bank Negara Indonesia Syariah Medan Branch is to see the implementation of services in Islamic banking in the field of customer service. The research was conducted at BNI Syariah Medan. This type of research is descriptive qualitative. Data collection methods in the research are using library research, observation and interviews. The sampling technique used random sampling. The types of data used in this study are primary and secondary data. The data analysis used in this study was descriptive by using literature studies in the form of muamalah fiqh books.The results showed that the implementation of maqashid sharia in services at Bank Negara Indonesia Syariah Medan Branch is appropriate, based on the indicators of educating the individuals (Tahzibul Fardh), upholding justice (Iqamah al-adl), and achieving prosperity (Maslahah).Keywords: Service, Maqashid sharia, Customer Service

ANALISIS PROFITABILITAS TERHADAP BEBAN RISIKO OPERASIONAL PERBANKAN SYARIAH DI PANDEMI COVID-19

2021 ◽  
Vol 10 (2) ◽  
pp. 118-131
Author(s):  
Muhlis ◽  
Izzatun Maghfirah ◽  
Dewi Puspita Sari
Keyword(s):  
Regression Analysis ◽  
Financial Services ◽  
Commercial Banks ◽  
Secondary Data ◽  
Operational Risk ◽  
Islamic Banking ◽  
Economic Sector ◽  
Business Units ◽  
Banking Institutions ◽  
Independent Variable

The Covid-19 pandemic that happened in Indonesia certainly affected many aspects of life, including the economic sector. Furthermore, in Islamic banking institutions, this institution serves as an intermediary between the collection and distribution of funds to customers. So that the pandemic can affect this sector in financial performance, especially in the profitability of institutions. In this study, profitability uses the ROA ratio in both Islamic Commercial Banks and Sharia Business Units, as well as operational risk burden as an independent variable. The data used in this study is secondary data from the official website of the Financial Services Authority which was analyzed using multiple regression analysis, classical assumption test, and determinant coefficients in SPSS. The results showed that the ROA BUS and UUS variables did not have a significant effect on the operational risk burden, while the determinant coefficient showed 44.9%.

EFFECTIVE MARKET SEGMENTATION AND VIABILITY OF ISLAMIC BANKING IN NIGERIA

2012 ◽  
Vol 01 (10) ◽  
pp. 01-09
Author(s):  
Mohammed Abubakar Mawoli ◽  
Dauda Abdulsalam
Keyword(s):  
Central Bank ◽  
Market Segmentation ◽  
Religious Affiliation ◽  
Secondary Data ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Western Countries ◽  
Secondary Sources ◽  
Library Research ◽  
The Future

Islamic banking has become a global phenomenon as both Islamic and western countries have embraced it. However, the move by the Central Bank of Nigeria (CBN) to introduce Islamic Banking in Nigeria was met with many criticisms, especially from the Non-Muslims. As a divorce from subjective criticisms typical of religious opponents’ discussions, the study examined the viability of Islamic banking in Nigeria using market segmentation criteria. Being a library research, secondary data was obtained from various secondary sources and analyzed descriptively. The study found that, the targeted Muslim segment is substantial, identifiable, measurable, accessible and reliable. Hence, the study concludes that the introduction of Islamic banking in Nigeria is worthwhile and the future of Islamic banks in the country is bright and prosperous. The study, therefore, recommends that though Islamic banking has come to stay, Muslims and non-Muslims should support its establishment as all citizens irrespective of religious affiliation are likely to benefit from it.

scholarly journals Shari’ah Governance of Islamic Non-Banking Financial Institutions in Malaysia: A Conceptual Review

2021 ◽  
Vol 2 (1) ◽  
pp. 70-77
Author(s):  
Azmir Ahmad ◽  
Muhammad Shahrul Ifwat Ishak
Keyword(s):  
Financial Institutions ◽  
Banking Industry ◽  
Regulatory Framework ◽  
Islamic Banking ◽  
Governance Framework ◽  
Library Research ◽  
Governance Practices ◽  
Banking Institutions

It is widely recognized that Malaysia is among the leading countries in the Islamic banking industry. This is due to its comprehensive regulatory framework from the Shari’ah aspects, particularly Shari’ah governance. Bank Negara Malaysia (BNM), as the regulator, is closely monitoring all players in this industry so that they can follow all its policies and regulations closely. Nevertheless, the Islamic Non-Banking Institutions (NBFIs), seem to be contrary in this aspect. In fact, it is not compulsory for the NBFIs to adhere to the BNM’s policies, particularly regarding the Shari’ah governance framework. Therefore, this study aims to explore Shari’ah governance practices among selected Islamic NBFIs in Malaysia. Since this study is a conceptual review, it adopts library research to achieve its objective. The finding reveals that there are different practices of Shari’ah governance among the Islamic NBFIs due to different sizes of their institutions and the complexity of their products. While the flexibility may bring benefits for the NBFIs, their respective regulators should enhance the Shari’ah governance aspects by providing a comprehensive policy as well as improving its enforcement particularly from the check and balance perspective. Also, the study suggests that the Islamic NBFIs should establish an association among its members to promote coordination, strengthen the governance, and exchange views, particularly on Shari’ah aspects.

scholarly journals Investment of Zakat Fund in Malaysia

2019 ◽  
pp. 999-1004
Author(s):  
Caturida Meiwanto Doktoralina ◽  
Nor Asariah Ilias ◽  
Zakaria Bahari ◽  
Waluyo Waluyo ◽  
Jazuli Suryadhi
Keyword(s):  
Content Analysis ◽  
Secondary Data ◽  
Islamic Banking ◽  
Analysis Methods ◽  
The People ◽  
Banking Institutions ◽  
Research Findings ◽  
Fund Investment ◽  
Made In

Imam Hanafi believes that zakat funds should not be saved or invested. While Imam Maliki, Imam Syafie and Imam Hambali stated that zakat funds could be spent on a specific condition. This paper aims to analyse the investment of zakat funds at the zakat institution Pulau Penang (ZPP) from the view of zakat Experts. The question is, whether investing zakat funds is allowed? The objective of this paper will use secondary data through content analysis methods. Research findings show that Experts have two views, namely the first group that does not allow and the two groups that justify. Zakat Experts in Malaysia are more likely to view the investment of zakat funds is required for the interests of the eight legitimate recipients (asnaf) itself. Their reason is the benefit of the people. In ZPP, zakat fund investments are more concentrated in non-material. The forms are like Zakat Hemodialysis Center (PHZ) and the development of education, when in the form of investment materials made in fixed deposits in Islamic banking institutions. Can also show that zakat fund investment is justified if the following the sharia invests.

scholarly journals Investment of Zakat Fund in Malaysia.

2018 ◽  
pp. 710-715
Author(s):  
Caturida Meiwanto Doktoralina ◽  
Nor Asariah Ilias ◽  
Zakaria Bahari ◽  
Waluyo Waluyo ◽  
Jazuli Suryadhi
Keyword(s):  
Content Analysis ◽  
Secondary Data ◽  
Islamic Banking ◽  
Analysis Methods ◽  
The People ◽  
Banking Institutions ◽  
Research Findings ◽  
Fund Investment ◽  
Made In

Imam Hanafi believes that zakat funds should not be saved or invested. While Imam Maliki, Imam Syafie and Imam Hambali stated that zakat funds could be spent on a specific condition. This paper aims to analyse the investment of zakat funds at the zakat institution Pulau Penang (ZPP) from the view of zakat Experts. The question is, whether investing zakat funds is allowed? The objective of this paper will use secondary data through content analysis methods. Research findings show that Experts have two views, namely the first group that does not allow and the two groups that justify. Zakat Experts in Malaysia are more likely to view the investment of zakat funds is required for the interests of the eight legitimate recipients (asnaf) itself. Their reason is the benefit of the people. In ZPP, zakat fund investments are more concentrated in non-material. The forms are like Zakat Hemodialysis Center (PHZ) and the development of education, when in the form of investment materials made in fixed deposits in Islamic banking institutions. Can also show that zakat fund investment is justified if the following the sharia invests.

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