scholarly journals influence of the geographical environment on Islamic banking performance

2021 ◽  
Vol 20 ◽  
pp. e3146
Author(s):  
Ahmed Sameer El Khatib
Keyword(s):  
Fixed Effects ◽  
Islamic Law ◽  
Banking System ◽  
Principal Component ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Daily Data ◽  
Negative Effect ◽  
Geographic Environment ◽  
Main Components

The main goal of this study is to examine the influence of the geographic environment on the performance of Islamic banks present in four regions: Africa, Asia, Europe and North America. To achieve this goal, we have used daily data from 113 Islamic banks between 2010 and 2019. We applied different methodological approaches, such as principal component analysis and quantile regression with fixed effects for panel data. As a result, we found that the analysis of the main components shows that the performance of Islamic banks varies between regions. The regression of the linear panel highlights that the geographic environment positively and significantly affects the Islamic banking system, suggesting the importance of this aspect’s effects. Finally, the environmental effect seems to vary with the quantiles, bringing positive effect to the lower quantile and negative effect to the highest quantile. This quantile specification points to the environment-performance nonlinear relationship of the Islamic bank, reflecting a discipline variable in the time imposed by the Council of Shariah or Islamic Law. This discovery helps to better explain the main difference between Islamic banks in the East and those in the West, and also allows investors to adjust their portfolio options when considering the products of Islamic banks according to regional specificities.

scholarly journals The Analysis of the Turkish Islamic Banking System Between 2005 and 2014

2016 ◽  
Author(s):  
Lívia Tálos ◽  
Gyöngyi Bánkuti ◽  
Jozsef Varga
Keyword(s):  
High Risk ◽  
Economic Crisis ◽  
Islamic Law ◽  
Banking System ◽  
Rating System ◽  
Annual Reports ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Conventional Banks

Islamic banking is a banking system that is based on the principles of sharia or Islamic law. The principles of Islamic finance forbid interest - this is commonly known as riba - charity (zakat), forbid high risk (gharar), forbid some transactions like gambling, and are based on PLS (Profit-Loss Share). The most important concept is that both charging and receiving interest are strictly forbidden; money may not generate profits. Islamic banks have largely survived the global economic crisis intact and they offer a safer operation than conventional banks. CAMEL analysis is a supervisory rating system to classify a bank's overall condition according to Capital (C), Assets (A), Management (M), Earnings (E) and Liquidity (L). In the analysis a variety of indicators were calculated based on data from the annual reports. The results of the four banks were averaged separately, then classified (1 = good, 2 = adequate, 3 = satisfactory, 4 = acceptable, 5 = unacceptable) according to the desired criteria, the changes over the years and the relative values of the four banks.

scholarly journals Islamic banking sustainability: theory and evidence using a novel quadruple bottom line framework

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
M. Luthfi Hamidi ◽  
Andrew C. Worthington
Keyword(s):  
Rural Areas ◽  
Islamic Law ◽  
Principal Component ◽  
Primary Data ◽  
Small Scale ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Bottom Line ◽  
Content Type ◽  
Sustainability Theory

PurposeThe study aims to extend the conventional triple bottom line (TBL) framework (prosperity, people and planet) to the quadruple bottom line (QBL) by newly adding a “prophet” dimension for Islamic banks seeking compliance with Islamic law in their pursuit of sustainability.Design/methodology/approachEmploy Chapra's corollaries of maqasid al-shari'ah (the goals of Islamic law) to develop constructs for a survey of 504 Islamic bank stakeholders from five Indonesian provinces to gather primary data to quantitatively verify the dimensions and items in the proposed QBL framework. Categorical principal component analysis (CATPCA) then identifies the sustainability of ten Islamic banks from ten countries as a trial application of the resulting QBL index.FindingsUsing the dimensions and items identified using CATPCA, the authors develop a QBL index to assess the sustainability of the ten Islamic banks. The findings suggest that half of the banks are sufficiently sustainable, with three being proactive (doing more than is required) and two being accommodative (doing all that is required). The remaining five banks are unsustainable, with two banks being defensive (doing the least that is required) and three being reactive (doing less than is required). Most of the banks perform relatively poorly according to the “planet” (38%) and “people” (41%) dimensions and perform better on the “prosperity” (53%) and “prophet” (63%) dimensions. Nonetheless, there is ample room for improvement across all dimensions of sustainability.Research limitations/implicationsThe generalizability of the findings is limited by the small-scale single-country survey used in the CATPCA part of the analysis. Only ten Islamic banks were included in the QBL scoring and ranking exercisesPractical implicationsIslamic banks can improve their sustainability by increasing green financing and reaching out to rural areas and disadvantaged populations. In countries with Islamic banking systems, regulators can support this through training, guidance and incentives.Originality/valuePioneering exploration of TBL from maqasid al-shari'ah perspective. First, we develop a QBL index to assess the sustainability of Islamic banks in line with actual stakeholder expectations.

scholarly journals Factors Influencing Customers Loyalty Towards Islamic Banking: A Case Study in Gombak, Selangor

2020 ◽  
Vol 15 (1) ◽  
pp. 11-20
Author(s):  
Farhan Lukman Rahman ◽  
Wan Mohd Farid Wan Zakaria ◽  
Wan Muhd Faez Wan Ibrahim ◽  
Syed Khusairi Tuan Azam ◽  
Mohd Hafizan Musa
Keyword(s):  
Islamic Law ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Basic Principles ◽  
Independent Variables ◽  
Customer's Loyalty ◽  
Industry Needs ◽  
Structured Questionnaire

The Islamic banking system governs two (2) basic principles which are mutual sharing of profit or loss and the prohibition of the collection and payment of interest. These basic principles are important to the establishment of an Islamic bank. Islamic law prohibits any activities that involve interest, gambling and speculative. Having great competition with foreign and conventional bank, Islamic banking industry needs variety of services and products to be offered to attract customers which is in compliance with shariah law. Thus, the main objective of this study is to examine the factors that influence customer’s loyalty towards Islamic banking. The independent variables include shariah compliant, product quality, service quality, and convenience. This study is conducted using structured questionnaire and were personally administrated across 303 respondents in Gombak, Selangor. This study is significantly important for the industry to find out the explanations and motive of customer’s loyalty in Islamic banks. Eventually, it will help the industry to establish a better services and products for the customers.

scholarly journals Islamsko bankarstvo i modeli financiranja u poslovanju islamske banke

2017 ◽  
Vol 6 (2) ◽  
pp. 65
Author(s):  
Nemanja Budimir
Keyword(s):  
United Arab Emirates ◽  
Islamic Law ◽  
Banking System ◽  
The Philippines ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking And Finance ◽  
Minority Religion ◽  
Conference Organization ◽  
The Uk

Islamic banking is now a widespread notion in both Islamic countries and the West. It denotes a bank form and finances that seek to provide services to clients without interest. Proponents of Islamic banking say that the main objective is the "fish", which is prohibited by Islamic law. This attitude toward interest contributed to the unification of several Islamic schools, with the aim of finding ways for the development of an alternative banking system that would be compatible with the rules of Islamic Laws, and in particular to the rules relating to the prohibition of interest. Since the mid-1970s, the number of Islamic banks is on the rise. Islamic banks are not only based in countries where Islam is the prevalent religion, such as Egypt, Jordan, Sudan, Bahrain, Kuwait, United Arab Emirates, Tunisia, Mauritania and Malaysia, but also in countries such as the UK, Germany and the Philippines where Islam is a minority religion. The International Islamic Bank, the Islamic Development Bank, whose shareholders are members of the Islamic Conference Organization are acting as sponsors for Islamic banking and finance throughout the Islamic world.

scholarly journals ISLAMIC BANKING SYSTEM IN THE SULTANATE OF OMAN FROM THE PERSPECTIVE OF BANKING OFFICERS EMPLOYEES AND CUSTOMERS

2021 ◽  
pp. 13-28
Keyword(s):  
Islamic Law ◽  
Small And Medium Enterprises ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Management Framework ◽  
Risk Management Framework ◽  
Research Questions ◽  
Medium Enterprises ◽  
Method Approach

This research aims to determine the viability for the operation of Islamic banks within the Omani banking system. By looking into various opportunities for Islamic banking in Oman and given the unique rules on transactions (fiqh muamalat) of Islamic banking based on the Shariah precepts or the so-called Islamic law. As the establishment of small and medium enterprises (SMEs) is rapidly growing in Oman, many SMEs can draw support from Islamic banks. The study used a mixed method approach to answer the research questions. Do the participants patronize Islamic banking over conventional banking?. The study compared both conventional and Islamic Banking. The population of the study represented bank officers, bank employees and customers. The sample of the study (n=100) participated in the survey. Another selected sample participated in interviews. Findings revealed different views over Islamic banking. Islamic banking is careful to provide products and services. Also, they are found to be capable of offering products and processes that answers the need of certain aspects with a risk management framework that is distinct from what normal banking provides. The study findings support the need for Islamic banking systems as it would be easier to spread Islamic banking and financing.

The Moral Possibility of Islamic Banking System as Institution

2013 ◽  
pp. 143-172
Keyword(s):  
Phenomenological Model ◽  
Islamic Law ◽  
Banking System ◽  
Critical Examination ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Extensive Review ◽  
Review Of The Literature ◽  
Critical Understanding ◽  
Unity Of Knowledge

This is an applied chapter on the application of the phenomenological model of unity of knowledge to a critical understanding of the Islamic law, economics, finance, and banking philosophy of the Islamic banks in Indonesia. The chapter explains how the Indonesian Islamic banks are trying to introduce the moral and ethical factors in the mundane business of finance and banking as a sign of integrating God (i.e. the monotheistic law) with this world-system. The chapter goes on with its critical examination of the Indonesian case in the light of its theorem of universality and uniqueness of the monotheistic law as functional ontology. An extensive review of the literature is undertaken to establish its critical worldview of the predicament prevailing in the moral premise with Islamic economics, finance, and banking. The alternative prescription is provided in light of the phenomenological model of epistemic unity.

Good Corporate Governance Principles in Indonesian Syariah Banking

2020 ◽  
Vol 2 (1) ◽  
pp. 8-13
Author(s):  
Andrew Shandy Utama
Keyword(s):  
Corporate Governance ◽  
Financial Services ◽  
Islamic Law ◽  
Good Governance ◽  
Banking System ◽  
Supervisory Board ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Good Corporate Governance ◽  
Conventional Banks

Islamic banks are banks that carry out their business activities based on the principles of Islamic law in banking activities based on fatwas issued by the National Sharia Council of the Majelis Ulama Indonesia. This research aims to explain the principles of Good Corporate Governance in Islamic banking in Indonesia. The method used in this research is normative legal research. The results of the research explained that to maintain the trust of Indonesian people who are predominantly Muslim, Islamic banking must apply the principle of Good Corporate Governance in its management. The application of the principle of Good Corporate Governance in Islamic banking is strictly regulated in Article 34 Paragraph (1) of Law Number 21 of 2008, which emphasizes that Islamic banks must implement good governance that includes the principles of transparency, accountability, responsibility, professionalism and fairness in carrying out its business activities. Form of application of the principles of Good Corporate Governance in Islamic banking is supervision conducted by the National Sharia Council of the Majelis Ulama Indonesia in general and the Sharia Supervisory Board specifically in each Islamic bank. Based on data from the Financial Services Authority in 2017, currently there are 13 Islamic banks in Indonesia, 13 Islamic business unit of conventional banks, and 102 Islamic rural banks. This is evidence of the existence and development of Islamic banking that is significant in the national banking system.

Potential of Islamic finance: A survey of Tunisian Northwest companies

2017 ◽  
Vol 5 (2) ◽  
pp. 28
Author(s):  
Rym Ammar Ayachi ◽  
Dhafer Saidane ◽  
Fayçal Mansouric
Keyword(s):  
Financial Institution ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Finance Development ◽  
Negative Effect ◽  
Survey Results ◽  
Potential Demand ◽  
Northwest Region ◽  
Do So

The present paper aims to assess the Islamic products potential demand for entrepreneurs in the Tunisian Northwest region. In order to do so, we developed a questionnaire which was sent to these entrepreneurs. The survey results show that the latter perceive Islamic Finance as a seductive phenomenon. However, its development appears to be difficult. Indeed, according to the survey results, the lack of knowledge may impede the expansion of Islamic banking in Tunisia. Moreover, the following factors: cost, religious conviction, proximity, flexibility and satisfaction of the needs, may affect the entrepreneurs' choice to deal with Islamic financial institution. In addition, the lack of entrepreneurs' confidence with regard to the compliance of Islamic banking with the Shariah principles has a negative effect on Islamic finance development in the Tunisian Northwest region. For this reason, Tunisian Islamic banks should put more effort to reinforce their competitiveness.

Purification of Non-Halal Income in Malaysian Islamic Banks: An Overview (Penyucian Pendapatan Tidak-Halal Di Bank-Bank Islam Malaysia: Satu Tinjauan)

2017 ◽  
Vol 14 (2) ◽  
pp. 305-326
Author(s):  
Saidatolakma bt Mohd Yunus ◽  
Sayed Sikandar Al Haneef ◽  
Zuraidah Kamaruddin ◽  
Mek Wok Mahmud
Keyword(s):  
Special Reference ◽  
Banking System ◽  
Financial Impact ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Total Income

Abstract Purification of non-halal income (NHI) is the process of deducting non-halal or tainted income deemed unacceptable by Shairaah from the total income generated in Islamic banks. It is undeniable that Shariaah non-compliance events still occur in Islamic banking system considering the fact that Islamic banks have not been able to fully comply with the requirements of Shariaah in their transactions, operations and financial activities. The realization of Shariaah non-compliance events in Islamic banks in some situations involve a financial impact which leads to NHI. All NHI identified must be purified since Islam does not allow any non-halal income to be held, kept and utilized for their own benefits. This paper will give a new insight on purification of NHI by first delineating the concept of mal haram in Islam as well as the Shariaah non-compliant events realized in the banks, with special reference to cases involving Islamic banks in Malaysia. Keywords: Islamic banking, non-halal income, purification, charity, waqf. Abstrak Penyucian pendapatan tidak halal (NHI) adalah proses memisahkan pendapatan tidak halal menurut Syari'ah daripada jumlah keseluruhan pendapatan yang dihasilkan oleh bank Islam. Tidak dapat dinafikan bahawa masih berlaku ketidakpatuhan Syariah dalam sistem perbankan Islam. Ini adalah kerana bank Islam tidak dapat mematuhi sepenuhnya keperluan Syariah dalam transaksi, operasi dan kegiatan kewangan mereka. Kewujudan perkara yang tidak mematuhi Syariah di bank Islam dapat memberi kesan kepada status kewangan yang boleh membawa kepada berlakunya pendapatan haram. Pendapatan tidak halal yang sudah dikenalpasti mesti disucikan kerana Islam tidak membenarkan apa-apa pendapatan tidak halal disimpan dan digunakan untuk faedah mereka sendiri. Kajian ini memberi pandangan baru tentang penyucian pendapatan tidak halal dengan membincangkan konsep harta haram dalam Islam serta perkara-perkara yang tidak patuh syariah yang berlaku di bank-bank Islam di Malaysia. Kata Kunci: Perbankan Islam, pendapatan tidak-halal, Penyucian, Amal, wakaf.

scholarly journals Standard Quality Banking Services of Islamic Banks

2018 ◽  
Vol 8 (1) ◽  
pp. 301
Author(s):  
Haneen A. Al-Khawaja ◽  
Barjoyai Bardai
Keyword(s):  
Islamic Law ◽  
Theoretical Aspect ◽  
Islamic Banking ◽  
Islamic Banks ◽  
High Confidence ◽  
Banking Services ◽  
Standard Quality ◽  
Definition Of

This research discusses in detail the theoretical aspect of the quality standards of banking services of traditional Islamic banks. The criterion of "Shari'ah Compliance" was added by the researcher to the importance and role of dealing with Islamic banks, the definition of this standard and its importance, how to test it for banks as well as how, without the legitimate commitment of these banks to what is classified as Islamic from the foundation, we focus on the importance of the existence of a legal commitment to any Islamic bank to achieve the quality of Islamic banking services of high quality in accordance with Islamic law and laws to achieve a high confidence in the customers who belong to him and deal with his Conspiracy.

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