scholarly journals An Explanatory Analysis to Identify and Prioritize the Challenges of Islamic Banking Implementation: The Case of I.R. Iran

2014 ◽  
Vol 35 ◽  
pp. 45-55
Author(s):  
Seyed Reza Seyed-Javadin ◽  
Reza Raei ◽  
Mohammad Javad Iravani ◽  
Mohammad Safari
Keyword(s):  
Qualitative Method ◽  
Banking System ◽  
Islamic Banking ◽  
Practical Application ◽  
Policy Makers ◽  
The Road ◽  
Banking Activity ◽  
Islamic Jurisprudence ◽  
Using Data ◽  
Conceptual Research

Islamic banking system has emerged as a competitive and a viable substitute for the conventional banking system during the last four decades. Islamic banking is a banking activity that is accordance with the laws of Islam (Islamic jurisprudence) and its practical application is in the development of Islamic economics. For complete implementation of Islamic banking, namely transition from interest free banking system and going forward to reach the total Islamic banking system, there are challenges and problems involved. The main purpose of this research is to identify and explain the important challenges associated with IB implementation in I.R.Iran. To achieve this goal, based on the qualitative method after a detailed study of the theoretical foundation and literature review, using data obtained from interviews with experts and the convenient questionnaire, the final identified factors have been analyzed and presented in form of a conceptual research model. Experts of this research were both academicians and practitioners in the field of banking and financial system. The findings showed that significant challenges exist to establish a comprehensive system of Islamic banking; accordingly policy makers and mangers in order to succeed in this system should consider them. The convenient programs should be settled so that the problems and challenges eliminated and the road to success implementation will be paved.

Perception of stakeholders on governance dimensions of the Islamic banking sector

2019 ◽  
Vol 14 (4) ◽  
pp. 601-619
Author(s):  
Ibrahim Abiodun Oladapo ◽  
Roshayani Arshad ◽  
Ruhaini Muda ◽  
Manal Mohammed Hamoudah
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Simple Random Sampling ◽  
Islamic Banking ◽  
Policy Makers ◽  
Content Type ◽  
Stakeholder Groups ◽  
Body Of Knowledge ◽  
Form Part ◽  
Global Growth

Purpose The perception of different stakeholder groups on governance dimensions, such as transparency, accountability and ethics, in the Islamic banking sector is examined, given the global growth of Islamic banking and its purpose of enhancing economic growth and development through Shari’ah-compliant instruments. The purpose of this paper is to determine whether the stakeholders in Nigeria perceive each dimension differently. Design/methodology/approach The data for the study were collected using a survey questionnaire. Simple random sampling was used to select the respondents. The respondents are customers, employees and shareholders of the Islamic banking sector in Nigeria. Findings Findings show that ethics is highly perceived as the key dimension in governance for the Islamic banking sector, whilst a positive and significant relationship is observed between the variables. Based on the variance analysis, there were statistically significant differences in perception between the stakeholders groups in the Islamic banking system. However, similar positive perceptions are accorded towards the overall governance dimensions across stakeholder groups namely, customers, employees and shareholders. Originality/value This study will extend the current body of knowledge in the field of Islamic finance by providing insights into policy makers, operators and regulators of the Islamic banking sector in Nigeria on the prospective stakeholders’ level of perception of the governance dimension, which could form part of the solutions to many contemporary issues in the banking system. This contribution is important, considering the clear relationship among governance dimensions which should be viewed in light of Islamic ideals.

scholarly journals DILEMA SKIM MURÂBAHAH PADA PERBANKAN SYARIAH

2011 ◽  
Vol 35 (2) ◽  
Author(s):  
Syukri Iska
Keyword(s):  
Banking System ◽  
Specific Reference ◽  
Islamic Banking ◽  
Conventional System ◽  
The Real ◽  
Islamic Jurisprudence ◽  
Islamic Countries ◽  
Economic Transaction

<p>Abstrak: Kesemarakan pertumbuhan perbankan syariah terutama di negara- negara Muslim pada beberapa dekade terakhir tidak dapat dipungkiri. Namun di balik pertumbuhan tersebut bank syariah sering dikritik hanya sekadar ganti “baju” dengan klaim bahwa bank ini mengambil beberapa konsep dari dari bank konvensional kemudian menggantikannya dengan idiom-idiom yang ada pada fiqih muâmalah. Tulisan ini memaparkan penjelasan terhadap pertanyaan tentang keberadaan bank syariah dengan merujuk pada skimmurâbahah, bagaimana perasaan dan perbedaan antara kedua sistem Islam dan konvensional, serta implikasi sistem perbankan Islam dalam transaksi ekonomi yang menyeluruh. Penulis berargumen bahwa kendati skimmurâbahah bukan merupakan instrumen ideal untuk mencapai tujuan riil ekonomi Islam, skimmurâbahah ini ternyata mengandung banyak persoalan, terutama kalau dilihat dalam perspektif syariah secara puristik ataupun menurut paradigma tentang bank.</p><p><br />Abstract: The Dilemma of Murabahah Skim in Shari‘a Banks. The flourishing development of Shari‘a Banks especially in Islamic countries for the last few decades are undeniable. However, despite such tremendous development it has often been criticized for being only changing suit claiming that it has taken some conventional system concepts which are then modified in acoordance with idioms found in Islamic jurisprudence discourse. This paper then sheds some lights on some questions of the existence of Shari‘a Banks with specific reference to murâbahah skim, how the two system similar to or different from each other, as well as the implication of the Islamic banking system in the general economic transaction. The author argues that although the murâbahah skim is not an ideal instrument in achieving the real objective of Islamic economy, its domination as an important skim, however, seems to be in dilemmatic position between the pragmatic demands of the need of pure Shari‘a laws as a genuine reference and the role of banks should fulfil.</p><p><br />Kata Kunci: perbankan syariah,murâbahah, ekonomi Islam</p>

scholarly journals Bayʿ wa salaf in Islamic banking current practices

2018 ◽  
Vol 10 (2) ◽  
pp. 206-224
Author(s):  
Munawwaruzzaman Mahmud ◽  
Muhammad Hisyam Hassan ◽  
Nur Fathin Khairul Anuar
Keyword(s):  
Qualitative Method ◽  
Relevant Literature ◽  
Islamic Banking ◽  
Specific Product ◽  
Content Type ◽  
Loan Contracts ◽  
Banking And Finance ◽  
Conceptual Research ◽  
Practical Implications ◽  
Made In

Purpose The purpose of this paper is to analyze the issue of bayʿ wa salaf (the combination of sale and loan contracts in a single arrangement) from the Sharīʿah perspective. Based on the Sharīʿah findings on the issue, the paper examines the existing Islamic banking products and services that use these two specific contracts to determine whether the current practice is in line with Sharīʿah. Design/methodology/approach The paper uses the qualitative method by reviewing and analyzing relevant literature and operational structures to comprehend the issues pertaining to bayʿ (sale) and salaf (loan). It then provides Sharīʿah parameters for bayʿ wa salaf before applying them in assessing some existing Islamic banking products and practices. Subsequently, the compliance status of the banking operations that use these contracts in a specific product structure can be ascertained. Findings The paper finds that the bayʿ wa salaf arrangement in the existing Islamic banking products and services, as elaborated in the paper, does not fall under the prohibited category. This deduction is made in accordance with the parameters derived from jurists’ discussion on the issue of bayʿ wa salaf. It also takes into consideration other factors influencing the existence of such arrangements. Research limitations/implications This conceptual research highlights the jurists’ discussion on the issue of bayʿ wa salaf and the compliance status of the current products and services that use the contracts in a single arrangement (specifically in the case of Malaysia) without discussing other possible structures that can be applied as an alternative to the bayʿ wa salaf arrangement. Practical implications Thorough understanding of the issue can strengthen the industry’s confidence in executing operations that conform to Sharīʿah principles. Originality/value The paper provides comprehensive deliberation on the ruling of bayʿ wa salaf from various schools of thought and exhaustive elaboration on existing Islamic banking products that apply bayʿ wa salaf in their structures. This contributes in reinforcing the stakeholders’ confidence in the operations of Islamic banking and finance.

scholarly journals Sharia Maqashid Index as a measuring performance of Islamic banking: A more holistic approach

2017 ◽  
Vol 14 (2) ◽  
pp. 193-201
Author(s):  
Sri Hartono ◽  
Agus Sobari
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Large Scale ◽  
Banking System ◽  
Holistic Approach ◽  
Performance Comparison ◽  
Small Scale ◽  
Islamic Banking ◽  
Due Measure ◽  
Using Data

So far, measurements of financial performance of Islamic banking is still predominantly still used by indicators of financial performance of conventional banking system. Its implication, many stakeholders, especially customers of Islamic banks. For Moslems are difficulty in measuring the benefits of the existence of Islamic banking. It is clearly due measure of success of Islamic banking course will be very different from conventional banking successes. If the benchmarks used today is still conventional, the consequences will be contained incorrect results of performance comparison of Islamic banking and conventional banking. Thus, both of the banking system becomes irrelevant and less apt to be compared directly. The size of Islamic banking performance should not directly benchmarking with conventional banking. It must be linked to the objectives and the establishment of Islamic banking noble intentions, namely to provide human well simultaneously implement the principles contained in sharia maqashid. This research will try to practice the measurement of financial performance based Sharia Maqashid and use it to make comparisons between the performance of the national largest-scale of Islamic commercial banks and regional small-scale of Islamic rural banks (BPR Syariah). This study presented using data from the financial statements of the three Islamic commercial banks and three Islamic rural banks (BPR Syariah). The results showed that the performance of the national largest-scale of Islamic commercial banks and regional small-scale of Islamic rural banks (BPR Syariah), all of them, has no a Sharia Maqashid index whose high value. This shows the inconsistency, that should be, the national largest-scale of Islamic banking to always focus on the muamalah objectives according by sharia. From the comparison of financial performance based on sharia maqashid, it turns out the national large-scale of Islamic commercial banks tend to have a lower index of Sharia Maqashid than the regional small-scale of Islamic rural banks (BPR Syariah).

scholarly journals THE OBSTACLE FACTORS OF MUSHARAKAH AND MUDHARABAH APPLICATION IN PAKISTAN

2020 ◽  
Vol 17 (2) ◽  
Author(s):  
Muhammad Khan ◽  
◽  
Dodik Siswantoro ◽  
Abid Ur Rahman ◽  
◽  
...  
Keyword(s):  
Critical Analysis ◽  
Banking System ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Islamic Jurisprudence ◽  
Main Factors ◽  
Internal And External Factors ◽  
Regulatory Constraint

Islamic Banking is based on the Islamic financial system. It is a banking system whose fundamental rules and regulations are established on Shariah laws i.e., Islamic jurisprudence originated from the Quran and Sunnah of the Prophet Muhammad peace be upon him. Its functions must comply with Shariah rules and must not violate any Shariah principle. The Islamic finance system is based on Profit-loss sharing financing namely, Musharakah and Mudharabah but there are numerous issues and challenges faced by Islamic bank during the implementation of Musharakah and Mudharabah financing contracts. The various paper has been revealed some of the internal and external factors in this context, but the study is still unexplored in Pakistan. This paper aims to highlight those obstacles factors that affect the application of Musharakah and Mudharabah financing by Islamic Banks in Pakistan. This paper is based on the critical analysis of the related literature on the concepts of Profit-loss sharing based financing by Islamic Banks. The finding suggests 4 (four) main factors which hinder the application of Musharakah and Mudharabah by Islamic bank in Pakistan namely high risk, lack of awareness, Regulatory constraint and Low rate of return. Finally, this paper concludes by making recommendations that may be adopted by Islamic banks and regulators to facilitate the promotion of Musharakah and Mudharabah Financing.

scholarly journals Analysis of the Turkish Islamic banking sector using CAMEL and Similarity Analysis methods

2020 ◽  
Vol 70 (2) ◽  
pp. 275-296
Author(s):  
József Varga ◽  
Gyöngyi Bánkuti ◽  
Rita Kovács-Szamosi
Keyword(s):  
Time Series ◽  
Banking Sector ◽  
Time Series Data ◽  
Banking System ◽  
Series Data ◽  
Similarity Analysis ◽  
Islamic Banking ◽  
Analytic Hierarchy ◽  
Policy Makers ◽  
Hierarchy Process

AbstractRating the reliability of banks has always been an important practical problem for businesses and the economic policy makers. The best way to do this is the CAMEL analysis. The aim of this paper was to create a bank-rating indicator from the five fields of the CAMEL analysis using two-two indicators for each field for the Turkish Islamic banking system. According to the results of the analysis, we could rank the Turkish Islamic banks. Beside the widespread use of the CAMEL analysis, we applied the Similarity Analysis as a new method. We compared the results from the two methods and came to the conclusion that the CAMEL analysis does not adequately provide a fairly shaded picture about the banks. The Component-based Object Comparison for Objectivity (COCO) method gave us the yearly results in time series form. The comparison of the time series data leads to the problem of deciding about what is more important for us – average, standard deviation or the slope. For handling this problem, we used Analytic Hierarchy Process, which gave weights to these indicators.

scholarly journals On The Road To Fairness For All

2020 ◽  
Vol 5 (1) ◽  
Author(s):  
Nur Khalidah Dahlan ◽  
Rozlinda Mohd Fadzil
Keyword(s):  
Economic Development ◽  
Economic System ◽  
Banking System ◽  
Essential Element ◽  
Islamic Banking ◽  
Pertinent Literature ◽  
The Road ◽  
On The Road

Equitable economic development is an essential element in order to achieve justice and equality in a multi-ethnic society. The reality of Malaysia, which is a country of multi-ethnicity, multi-religion and multi-cultural societies, demands a concept of justice and equality that is different from other countries, particularly the ones with homogenous societies. The highest law of the land places Islam, the religion associated with one of the main ethnicity, as the official religion of the nation and allowed the duality of economic system, in particular banking system, whereby conventional banking system exists side-by-side with the Shariah-compliant, Islamic one. By reviewing the pertinent literature on the development of Islamic banking, the reviewed cases on Islamic banking and its contributions to Malaysian society regardless of ethnicity and religion. The discussion in this paper therefore will be directed towards highlighting the laws and cases on Islamic banking and its implication to enhance the application of Islamic banking laws to consumers regardless of ethnicity and religion, in order to maintaining fairness and justice in a multi-ethnic society.

scholarly journals A Critical Evaluation of articles Related to Islamic Banking

2019 ◽  
Vol 8 (2S4) ◽  
pp. 302-306
Keyword(s):  
Critical Evaluation ◽  
Islamic Banking ◽  
Ethical Values ◽  
Risk Minimization ◽  
Banking Activity ◽  
Global Force ◽  
Islamic Jurisprudence ◽  
Banking Business ◽  
Conventional Banks ◽  
Set Up

Islamic banking is any banking activity carried out within the parameters of Islamic jurisprudence. It differs from the traditional banking business in its prohibition of dealing with interest i.e. borrowing and lending of money for interest. Another feature that distinguishes Islamic banking is the concept of profit and loss sharing paradigm. These features have made this sunrise industry to not only attract new markets but also to show consistent growth over the years. Hence, large conventional banks have also shown interest in venturing into Islamic banking and have opened Islamic banking windows in their commercial set up in order to capitalize on the opportunity. Although Islamic banking is still in its nascent stage, it has become a global force to reckon with due to its strong ethical values and risk-minimization principles. The primary aim of this article is to critically review the existing literature available in studies related to Islamic banking.

scholarly journals Service Quality from Customer Perception: Evidence from Carter Model on Bank Islam Brunei Darussalam (BIBD)

2018 ◽  
Vol 13 (2) ◽  
pp. 138 ◽  
Author(s):  
Qaisar Ali
Keyword(s):  
Service Quality ◽  
Pearson Correlation ◽  
Banking System ◽  
Islamic Banking ◽  
Policy Makers ◽  
Customer Perception ◽  
Brunei Darussalam ◽  
Pearson Correlation Test ◽  
Corporate Social ◽  
Carter Model

The main focus of this study is to examine the relationship between service quality and customers’ perception. The study deployed modified Carter model by introducing two unique dimensions of corporate social responsibility and innovation to examine this relationship. A self-administrated questionnaire based field survey was conducted. The research instrument was designed using eight dimensions of service quality. The content of the questionnaire was adjusted for relevance and friendliness purpose through pilot testing. Data was collected from 155 Bank Islam Brunei Darussalam (BIBD) customers from Muara district of Brunei. The sample data were statistically analyzed through descriptive, Cronbachs’ Alpha, Kaiser–Meyer–Olkin and Bartlett’s test, Pearson correlation test and confirmatory factory analysis (CFA). Pearson test was used to represent significant relationship between service quality and customer perception and CFA test was done to suggest the fitness of proposed Carter model suitability for Brunei’s Islamic banking. Results of the study revealed that service quality and customer perception are significantly related and Carter model is suitable for Islamic banking system in Brunei. Furthermore the study has practical implications for BIBD policy makers and managers to understand customer perception and adjust its service quality according to customer desire.

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