scholarly journals The Needs for Official Sharia Compliance Audit Institution to Protect Customers of Islamic Banking: an Application through Ḥisba

2017 ◽  
Vol 5 (1) ◽  
pp. 75-84
Author(s):  
Bharudin Che Pa ◽  
Mohd Roslan Mohd Nor ◽  
Sanusi Abdul Manaf
Keyword(s):  
Banking Industry ◽  
Banking System ◽  
Islamic Banking ◽  
Contributing Factors ◽  
New Era ◽  
Compliance Audit

The emergence of Islamic banking system in most banks in Malaysia nowadays bring a new era in Malaysian banking industry. This article discusses the needs for official sharia compliance audit institution to protect customers of Islamic banking. By using literature studies, this article concludes that one of the contributing factors which lead people to adopt Islamic banking system is their awareness of the serious and intolerable prohibition of riba. Some of the ways to ensure customers are well protected are to establish ḥisba institution as Sharia compliance audit body. The establishment of ḥisba institution allows it to stop the violation of Allah’s prohibition and protect the society. With the establishment of the institution, it can play an important role to solicit advice and to monitor performance so that the banks operate strictly as according to the Islamic regulations.

Dispute resolution in the Islamic banking industry of Tanzania: learning from other jurisdictions

2016 ◽  
Vol 9 (1) ◽  
pp. 125-142 ◽  
Author(s):  
Abdul-Nasser H.R. Hikmany ◽  
Umar A. Oseni
Keyword(s):  
Dispute Resolution ◽  
Dispute Settlement ◽  
Banking Industry ◽  
Banking System ◽  
Legal Framework ◽  
Policy Framework ◽  
Islamic Banking ◽  
Court System ◽  
Content Type ◽  
Good Policy

Purpose This paper aims to examine the prospects of a dispute resolution framework for the Islamic banking industry in Tanzania under the existing legal framework. Design/methodology/approach This paper is based on comparative study by drawing significant lessons from other jurisdictions, and argues that to avoid some of the initial drawbacks in the dispute resolution framework for Islamic banking transactions in more advanced jurisdictions like Malaysia and United Kingdom, it is important for Tanzania to get it right from the onset to effectively manage Islamic banking disputes. Findings The study finds that apart from the court system which provides the main avenue for Islamic finance litigation, other processes such as arbitration and mediation which are deemed to be more sustainable could also be developed for effective dispute management. Research limitations/implications The study focuses on Tanzania banking system with comparison to other jurisdictions. Practical implications An increase of Sharī’ah-compliant products in Tanzania has led to the establishment of a number of Islamic banks. This study demonstrates the need for Tanzania to make use and/or make adjustment of its laws for effective dispute settlement of banking-related disputes. Originality/value This study appears to be the first paper to draw significant experiences from other jurisdictions to resolve Islamic banking disputes in Tanzania. It is expected to provide a good policy framework for the stakeholders in the Islamic banking industry in Tanzania.

Islamic banking selection criteria: a multi-ethnic perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Noradilah Abdul Hadi ◽  
Mohd Rizal Muwazir
Keyword(s):  
Design Methodology ◽  
Banking Industry ◽  
Descriptive Analysis ◽  
Banking System ◽  
Marketing Strategies ◽  
Islamic Banking ◽  
Content Type ◽  
Selection Factors ◽  
The Relationship ◽  
Further Development

Purpose The purpose of this paper is to examine selection factors among multi-ethnic customers in Malaysian Islamic banking industry. The information is important to reinforce the argument that ethnicity could become significant factor in determining customer behaviour. Design/methodology/approach This study uses quantitative approach by using questionnaire (Likert scale) to measure respondents ranking of 25 selection factors. A total of 272 valid responses were generated from 450 questionnaires distributed, with 60.4% response rate. The methods of analysis used are descriptive analysis, factor analysis and Kruskal–Wallis test. Findings The findings revealed five selection factors (religious and ethical, services and convenience, service quality and benefit, external and operational and charges), with religious and ethical factor as the most important criteria for Malay customers. As for Chinese and Indian customers, they chose services and convenience factor. Originality/value This study is conducted to gain new insights on the perception of multi-ethnic banking customers in Malaysia towards Islamic banks and how cultural differences might affect their decisions. The findings are important for further development of the Islamic banking industry in Malaysia considering ethnicity has a major impact on the society. The acknowledgement of similarities and differences between the ethnic groups could strengthen the relationship with the Islamic banking customers. Furthermore, incorporation of ethnicity factor in bank’s marketing strategies is important to secure competitive advantage particularly in dual banking system such as in Malaysia.

scholarly journals Paradigm Shift from Conventional to Islamic Banking System: A Case of the Conversion of Taqwa Islamic Banking in Pakistan

2018 ◽  
Vol III (I) ◽  
pp. 321-332
Author(s):  
Muhammad Mushtaq Ahmed ◽  
Javed Khan ◽  
Fazl e Haq
Keyword(s):  
Paradigm Shift ◽  
Banking Industry ◽  
Banking System ◽  
Islamic Banking ◽  
Conventional Model ◽  
Clear View ◽  
System A ◽  
Regulatory Guidelines ◽  
Previous Decade ◽  
Set Up

The paradigm shift in banking industry from conventional to Islamic system of banking has been evident in previous decade. Conventional institutions are also either setting-up Islamic subsidiaries or converting conventional set-up into Islamic. The bank of Punjab started Taqwa Islamic Banking-(TIB) by converting its 1st branch into Islamic banking in 2012. In 2014, the bank completed one of the largest conversion project by converting 24 conventional into Islamic banking. In this paper, the regulatory guidelines of SBP in respect to conversion is discussed and procedure adopted by the bank of Punjab-TIB- is studied and analyzed. Practical complications and key problems faced by BOP-TIB and its possible solution is also presented. The study will provide a clear view of the conversion and the method adopted by BOPTIB. The study will further guide institutions intends to adopt conversion of its business from conventional model into Islamic model.

scholarly journals Analisis Persaingan Perbankan Syariah Indonesia: Aplikasi Model Panzar-Rosse

2010 ◽  
Vol 11 (1) ◽  
pp. 1-20
Author(s):  
Rahmatina A. Kasri ◽  
Nur Iman
Keyword(s):  
Human Resources ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking Competition ◽  
High Data ◽  
Opposite Case ◽  
Conventional Banks

Indonesia is among the few countries that adopts dual banking system where Islamic banks run in parallel and compete with conventional banks. Although under such a system banking competition would be expected to be high, data tend to show the opposite case, as three Islamics banks acquired 65 percent of market share in Indonesia. This study, therefore, attempts to determine the degree of banking competition in Indonesia by employing the Panzar-Rosse Model for 2003-2008 period. The study also analyses the competitive behaviors of Islamic banks and compares it with those of its conventional counterparts. The estimated model suggests that monopolistic competition exists in the overall banking industry—the degree is even slightly higher for Islamic banking, where the market is characterized by aggressive competition for funding, quality human resources, and financing. Such competition occurs due to, among others, small market size, low consumer base, lack of product variations, and lack of competent human resources. These should be a major concern for all Islamics banking stakeholders for developing a better Islamic banking industry, particularly in Indonesia.

scholarly journals The Role of Shariah Auditor in Islamic Banks: The Effect of Shariah Governance Framework (SGF) 2011

2020 ◽  
Vol 11 (4) ◽  
pp. 443
Author(s):  
Mohd Rushdan Yasoa' ◽  
Wan Amalina Wan Abdullah ◽  
Wan Anisah Endut
Keyword(s):  
Internal Control ◽  
Banking Industry ◽  
Internal Audit ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance Framework ◽  
Roles And Responsibilities ◽  
Compliance Audit ◽  
Third Line ◽  
Shariah Governance

This paper ascertains the current roles and responsibilities of Shariah auditor in the Islamic banking industry in Malaysia. To explore further, we identify the changes in these roles, especially after the introduction of the Shariah Governance Framework (SGF) 2011. The study employs a qualitative method by utilizing in-depth interviews with nine (9) key individuals in Malaysian Islamic banks. Our findings support the notion that Shariah auditors' roles and responsibilities are still under the jurisdiction of the banks' internal audit unit. More importantly, Shariah auditors play their roles as the third line of defense by giving assurance to the shareholders and stakeholders that all businesses and operations comply with Shariah precepts. Also, Shariah auditors need to look at the internal control elements of whether effective and efficient enough to alleviate any possible Shariah breaches. In terms of changes in its roles after the SGF implementation, most of the interviewees assert that the approach has been changed from compliance audit to risk-based audit. Our findings guide us to propose more structured and specific guidelines about Shariah auditors' roles and responsibilities in the Islamic banks. This guideline eventually could provide stimulus to improve governance and strengthen market as well as stakeholder's confidence. Finally, this study stipulates some precious recommendations to further enhance the Shariah auditor roles not only in the Malaysian Islamic banking industry but also in similar contexts.

Sharīʿah Regulation and Supervision of the Iraqi Islamic Banking System

2020 ◽  
Vol 35 (1-2) ◽  
pp. 212-244
Author(s):  
Shamsalden Aziz Salh ◽  
Mark Hyland
Keyword(s):  
Case Studies ◽  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Islamic Banking ◽  
Supervisory System ◽  
Regulation And Supervision

Abstract This article critically evaluates the Sharīʿah regulation and supervision of the Iraqi Islamic banking system. Due to the country’s incomplete Islamic banking framework and lack of qualified Sharīʿah scholars, the Iraqi Islamic banking system is somewhat ineffective. In Iraq both the internal and external Sharīʿah supervisory systems in the Islamic banking sector are weak. The internal Sharīʿah supervisory system suffers from a shortage of qualified Islamic banking experts. At the same time, there is no effective external Sharīʿah supervisory system due to the lack of a Central Sharīʿah Board. This article examines the Sharīʿah supervisory system of the Iraqi Islamic banking industry by using case studies on Malaysia and Bahrain, both of which have a developed Islamic banking system. The Sharīʿah supervisory systems in these two countries are examined in order to propose an effective and comprehensive Sharīʿah regulatory and supervisory framework for the Iraqi Islamic banking industry.

scholarly journals MEMBANGUN KEUNGGULAN BERSAING DENGAN METODE ANALISIS SWOT 8 KUADRAN PADA PERBANKAN SYARIAH ( STUDI PADA BRI SYARIAH KOTA BATAM )

2019 ◽  
Vol 9 (2) ◽  
pp. 1
Author(s):  
Erman Syah
Keyword(s):  
Product Development ◽  
Banking Industry ◽  
Banking System ◽  
Growth Strategy ◽  
Market Development ◽  
Islamic Banking ◽  
Market Penetration ◽  
Islamic Banks ◽  
Islamic Bank ◽  
National Market

The development of Islamic banking in mature growing very rapidly, Islamic banking is considered as an alternative option for people who want to trade in sharia, Islamic banks are present in the community began in 1992, andthe institution until 2017 there were 12 Islamic banks, 22 Sharia Islamic rural banks and 155 units BPR in Indonesia, a very tight competition in the banking industry led to a strategy that should be done by the banking system. BRI Syariah Batam as a new Islamic bank in the Islamic banking industry and nationally are expected to compete for the national market share.The purpose of this study whether strategy should BRI Syariah Batam in order to be able to compete Kepualauan Riau, To know the strategies that should be used by the author using SWOT 8 Quadrant.From the results of research by analyzing the internal and external corporate Batam found that BRI Syariah expected to apply aggressive growth strategy by way of market penetration, market development and product development.

scholarly journals Perspective of Merger and Acquisition in the Indian Banks - A Sectoral Analysis

2011 ◽  
pp. 6-14
Author(s):  
Akankshya Arun Das ◽  
Bhagaban Das
Keyword(s):  
Banking Sector ◽  
Banking Industry ◽  
Statistical Significance ◽  
Banking System ◽  
National Development ◽  
Foreign Banks ◽  
Development Economic ◽  
New Era ◽  
Banking Business ◽  
Indian Banks

MERGER & ACQUISITION (M AND A) aims towards business restructuring thereby increasing competitiveness and shareholders’ value via increased efficiency. The banking industry has experienced an unprecedented level of consolidation on a belief that incomparable gain can accrue through expense reduction, increased market power, reduced earnings volatility and scale and scope of economies. The banking sector is one of the most important instruments of the national development. Economic development of the country is evident through soundness of the banking system. Deregulation in the financial markets, markets liberalization, economic reforms have witnessed astounding changes in the banking industry leading to incredible competitiveness and technological sophistication leading to a new era in banking. Since, then every bank is relentless in their endeavor to become financially strong and operationally efficient and effective. When deregulation dawned the horizon non banking financial institutions, private and foreign banks entered the fray with their hitechs. The outwit competition in the banking industry is bound to vault further down the lane, which in turn would make banking business more challenging and perplexing. A paradigm shift is discernable in the Indian Banking arena. This article concentrates on some M and A that have occurred post liberalization in India to understand the intents of “the Targets” and “the Acquirers”. The purpose of the present paper is to explore various motives of merger in Indian banking industry. The data of Merger and Acquisitions since economic liberalization are collected for a set of various financial parameters. Independent T-test used for testing the statistical significance and this test is applied not only for ratio analysis but also effect of merger on the performance of banks. This performance being tested on the basis of two grounds i.e.. Pre-merger and Post- merger. Finally the study indicates that the banks have been positively affected by the event of merger.

scholarly journals DETERMINANT OF EFFICIENCY OF THE ISLAMIC BANKING IN INDONESIA

2017 ◽  
Vol 20 (1) ◽  
pp. 29-48
Author(s):  
Nadiah Hidayati ◽  
Hermanto Siregar ◽  
Syamsul Hidayat Pasaribu
Keyword(s):  
Data Envelopment Analysis ◽  
Regression Model ◽  
Banking Industry ◽  
Banking System ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Panel Regression ◽  
Islamic Banks ◽  
Excellent Opportunity ◽  
Business Units

Dual banking system in Indonesia provides an excellent opportunity for the growth of Islamic banking industry in Indonesia. Islamic banking industry in Indonesia has improved in number of banks and branches but the performance of Islamic banks has decreased in recent years. This paper measures the efficiency of Islamic banking in Indonesia using the intermediation approach and the Data Envelopment Analysis (DEA) on quarterly reports of 10 Islamic Banks (BUS) and 15 Islamic Business Units (UUS). The results showed that Islamic Banks (BUS) and Islamic Business Units (UUS) in Indonesia has not been operating efficiently in its intermediation function. The estimation results of data panel regression model showed total financing and CAR have positive and significant impact, whereas the deposits have negative and significant impact to the efficiency of BUS and UUS in Indonesia.

scholarly journals CHALLENGES FACING ISLAMIC BANKING IN IRAN: EVALUATION AND POLICY IMPLICATIONS

2020 ◽  
Vol 6 (3) ◽  
Author(s):  
Hossein Meisamy ◽  
Hassan Gholipour
Keyword(s):  
Delphi Study ◽  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Policy Implications ◽  
Islamic Banking ◽  
Consensus Building ◽  
Relative Importance ◽  
Free Banking ◽  
Auditing Standards

Iran is one of the few countries that has instituted shariah-compliant banking nationwide and does not have a conventional banking sector. However, since the Riba-Free Banking Act (RFBA) was passed and put into practice in 1983, the Iranian Islamic banking system has experienced some significant challenges and shortcomings. The main purpose of this paper is to identify the various impediments facing the Iranian Islamic banking industry and to suggest a prioritized listing of these challenges. To achieve this goal, a three-round Delphi study (a method designed to aid consensus building) is used to determine the major challenges and rank them based on relative importance. The research panel consulted consists of 32 Iranian Islamic banking experts with in-depth knowledge and experience. The results show that the top five challenges to the Islamic banking system in Iran are (1) the governmental attitude towards Islamic banking; (2) lack of competition; (3) not revising the law (RFBA); (4) lack of shariah supervision; and (5) lack of accounting and auditing standards. This paper contributes to the literature addressing Islamic banking by critically analysing the more than three decades of Iranian experience in implementing shariah-compliant banking.

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