Does Islamic Finance Industry Lack a Certain Degree of Credibility?

2016 ◽  
Vol 4 (2) ◽  
pp. 1
Author(s):  
Aly Khorshid
Keyword(s):  
Banking Sector ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Credit Crunch ◽  
Banking And Finance ◽  
Finance Industry ◽  
High Profile ◽  
Alternative System ◽  
Golden Opportunity

Islamic banking and finance sector risks losing a golden opportunity to demonstrate an alternative system that could prevent a future credit crunch and share risks. With the conventional banking sector slowly coming to terms with its high-profile collapses and bailouts, the Islamic sector  has suffered  only mild aftershocks. The question  that comes to mind is: why are savers and investors not flocking to shariahcompliant banking? Could Islamic finance lack a certain degree of credibility? And if so, why? 

scholarly journals The Role of Musharakah in the Economic Development of Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa, Pakistan

2019 ◽  
Vol 6 ◽  
pp. 80-97
Author(s):  
Suhail Ahmad ◽  
Ejaz Aslam ◽  
Prof. Dr. S. Ghiasul Haq ◽  
Prof. Dr. Mohd Ma'Sum Billah
Keyword(s):  
Response Rate ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Limited Data ◽  
Khyber Pakhtunkhwa ◽  
Banking And Finance ◽  
Finance Industry ◽  
Muslim Countries ◽  
Job Opportunities

Islamic finance industry has been growing for the last twenty years, both in Muslim and non-Muslim countries around the world. There are different modes of Islamic finance which provide job opportunities across the globe. In Pakistan, the contemporaneous growth of Islamic banking and finance is not different from other countries. Islamic banking and finance does not only provide employment for individuals, indeed it also offers various products and services to customers across the country. Musharakah is a form of business in Islamic finance that is being adopted rapidly by most of the customers in Islamic banking and finance institutions. Therefore, the purpose of this study is to examine the role of Islamic finance, mainly how Musharakah is playing its due role in creating employment and maintaining sustainable development projects which in turn are causes of the development of the economy, particularly of Tehsil Dargai. For this purpose, this study collected data through a questionnaire that was randomly distributed among 100 respondents in Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa (KP), Pakistan and the response rate was 60%. We found that Islamic finance is rapidly growing in Dargai; indeed, people are practicing different modes of Islamic finance and Musharakah is the most popular form of Islamic finance in this area. This study utilizes limited data because it was only conducted in Dargai.

scholarly journals Managing Shariah Non-Compliance Risk via Islamic Dispute Resolution

2019 ◽  
Vol 13 (1) ◽  
pp. 2 ◽  
Author(s):  
Maria Bhatti
Keyword(s):  
Dispute Resolution ◽  
Institutional Arrangements ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Legal Analysis ◽  
Normative Approach ◽  
Banking And Finance ◽  
Finance Industry ◽  
Governance Systems ◽  
Shariah Governance

This article discusses Shariah non-compliance risk as a form of operational risk intending to ensure that operations in the Islamic and banking finance industry comply with Shariah procedures. In the field of Islamic finance, Shariah non-compliance risk refers to the possibility that Islamic finance transactions may be challenged based on Shariah non-compliance. This article uses a comparative and normative approach as well as a legal analysis of the case of Beximco. The article proposes the management of Shariah non-compliance risk by augmenting the effectiveness of Shariah governance systems with Islamic banking and finance arbitration; arbitration should be an enforced part of Islamic finance institutional arrangements—as it always has been classically—to provide flexibility for dispute resolution. To this end, the article examines contemporary implementations of Shariah arbitration rules to assess how Shariah non-compliance risk can be better managed via Islamic dispute resolution procedures.

scholarly journals The internal challenges facing Islamic finance industry

2016 ◽  
Vol 9 (2) ◽  
pp. 222-235 ◽  
Author(s):  
Abdulazeem Abozaid
Keyword(s):  
Product Development ◽  
Design Methodology ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Banking And Finance ◽  
Finance Industry ◽  
Development Methodology ◽  
Shariah Governance

Purpose The paper aims to highlight the challenges facing Islamic finance industry and outline the prospectus of what constitutes a sound Islamic banking product in terms of both its Shariah control and product development methodology. Design/methodology/approach The paper analytically addresses the internal challenges facing Islamic finance industry by highlighting, first, the deficiencies in the existing Shariah supervisory work and, then, the deficiencies in the product development methodology followed in Islamic banks. Findings Islamic banking and finance is facing some internal challenges which require immediate action. Although facing the external challenges may be beyond the capacity of the industry players, Islamic banks have no excuse to overlook or turn a blind eye to their internal challenges which can be overcome by enacting Shariah governance for both products and Shariah control and reforming the methodology of product development. Originality/value This paper highlights an issue that has not received the needed attention, and it proposes the necessary solutions to the problems it identifies.

scholarly journals ISU GLOBAL PEREKONOMIAN ISLAM: Telaah Kritis terhadap Tata Kelola dan Aktivitas Lembaga-lembaga Keuangan Islam

2016 ◽  
Vol 1 (2) ◽  
pp. 111
Author(s):  
Muhdi Kholil
Keyword(s):  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banking ◽  
International Forum ◽  
Banking And Finance ◽  
Finance Industry ◽  
Financial Products ◽  
Economic Practice ◽  
The World ◽  
Islamic Economic

<p>Indonesia is to be known widely by the world, which has Islamic finance system different from most countries. Indonesia which is in the international forum of financial syriah known "orthodox" or conservative in the application of Islamic principles recognized the economic practice of Islam which is closer to the economic substance of Islam, and relatively completed all aspects of the economy. Islamic economic development not only in the sectors has been developed such as banking, capital markets and non-bank financial institutions other, but also in extended development of the microfinance sector,  social and financial practices of real business to meet Islamic principles.</p><p>The composition and transaction of Islamic financial products’ Indonesia is a fact that is not owned by other countries which are also developing Islamic banking and finance industry. No wonder, since the majority of developing countries in the world of sharia finance industry with the approach of imitation (mimicry) with conventional, and many experts doubt the originality/economic system of Islamic finance, both conventional and expert on Islamic scholars. But on many opportunities, from seminars, conferences and working group forum, many countries are aware that Indonesia has a different form of sharia industry, the application of Islamic finance that has another color.</p><p>Keyword: Economics, Sharia, Indonesia.</p>

scholarly journals Growth and Prospect of Islamic Finance in Bangladesh

2018 ◽  
Vol 1 (1) ◽  
pp. p253
Author(s):  
Md. Moniruzzaman
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Upward Trend ◽  
Finance Industry ◽  
Specific Investment ◽  
The Past ◽  
Rapid Economic Growth ◽  
Islamic Financial Institutions

Though conventional financial system is contributing swiftly to the economic development but the Islamic finance is not lacking behind of it now a days. The Islamic finance industry has emerged as one of the component of a rapid economic growth over the past three decades. Initially the activities of Islamic finance is limited within the country, but at present the growth of Islamic finance are thought globally with an upward trend through the establishment of various Islamic financial institutions with different shareholders. This paper examines insights into the growth and prospect of Islamic finance in Bangladesh. Islamic finance is ruled by Islamic Finance Guidelines which is issued and approved by Central Bank of Bangladesh. This system has its own principles and guidelines which would make the system of choice in meeting specific investment needs. It compares Islamic and conventional finance regard to Efficiency and Profitability, Risk Management, and Sukuk and Conventional Bonds. In Bangladesh, the atmosphere is exclusive because of the existence of Islamic banking sector. But the country has some deficiencies in imposing specific Islamic finance regulations which have been recognized and efforts are being made to solve the problems by the authorities.

scholarly journals Peranan Pemerintah Dalam Mendorong Pertumbuhan Bank Syariah

2020 ◽  
Vol 1 (1) ◽  
pp. 72-83
Author(s):  
Ishak Trianda
Keyword(s):  
Banking Industry ◽  
National Development ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Banking And Finance ◽  
Finance Industry ◽  
Industry Competition ◽  
The World ◽  
Economic Foundation ◽  
National Industry

Pemerintah Indonesia sebagai motor penggerak pembangunan nasional. Sudah saatnya melakukan planning ke depan untuk menjadikan Indonesia sebagai pusat sentral ekonomi syariah dunia. Untuk itu perlu akselerasi daya saing industri ekonomi syariah nasional. Diawali dengan menyiapkan anggaran yang significan untuk sosialisasi terhadap perangkat-perangkat pendukung yang membuat bangkit dan berkembangnya ekonomi syariah tersebut khususnya perbankan syariah. Diantaranya menyiapkan sumber daya manusia yang handal diperkirakan kedepan membutuhkan 200 ribu tenaga kerja baru untuk keuangan dan perbankan syariah, menyiapkan angggaran sosialisasi terhadap sekitar 85 % penduduk Indonesia yang beragama Islam ( 240 juta jiwa) calon pengguna dan pemanfaat industri keuangan perbankan syariah tanah air. Termasuk keseluruh pesantren di 33 propinsi Indonesia ( 25 ribu pesanteren), pada 3,7 juta santri dan sejumlah kelompok usaha mikro syariah dan BMT. Diharapkan nantinya menjadi penopang pembangunan nasional agar mampu membangun pondasi ekonomi yang kuat, regulasi, persaingan industri yang sehat, pelaku industri modern, teknologi tepat guna sehingga menopang efisiensi industri. Sehingga pada saatnya menjadikan Indonesia sebagai motor penggerak ekonomi syariah dunia melampaui Arab Saudi, Iran dan Malaysia. Sangat memungkinkan, karena saat ini juga perkembangan ekonomi syariah Indonesia terus tumbuh mencapai 40 % setiap tahun dibandingkan pertumbuhan ekonomi konvensional hanya 19 %. Bahkan saat ini Indonesiapun dapat disebut negara dengan industri keuangan syariah terbesar di dunia karena memiliki lebih 20 ribu buah koperasi syariah dan Balai Mandiri Syariah Terpadu.Kata kunci : Sentral Ekonomi Syariah, Akselerasi, SosialisasiAbstractIndonesian government as a driving force of national development. It is time to do the planning ahead to make Indonesia as the central hub of Islamic finance world. It is necessary to accelerate the competitiveness of the national industry of Islamic finance. Begins with setting up a budget that significan to disseminate the devices that make up and support the development of Islamic economics is particularly Islamic banking. Among prepare qualified human resources estimated future need 200 thousand new workers for the Islamic banking and finance, preparing budget socialization of around 85% of Indonesia's population is Muslim (240 million) of potential users and beneficiaries of Islamic Banking industry country. Including schools in 33 provinces throughout Indonesia (25 thousand pesanteren), at 3.7 million students and a number of Islamic micro business group and BMT. Expected later became the backbone of national development in order to be able to build a strong economic foundation, regulatory, industry competition is healthy, modern industry, appropriate technologies that support the efficiency of the industry. So that in time to make Indonesia as the Islamic world's economic powerhouse surpassed Saudi Arabia, Iran and Malaysia. It is possible, because today the development of Islamic finance Indonesia continues to grow at 40% per year compared to conventional economic growth is only 19%. Even today Indonesia to be called the country with the largest Islamic finance industry in the world because it has more than 20 thousand pieces and cooperative Islamic Syariah Mandiri Integrated Hall.Key words : Shari’a Economics Center, Accelerate, Sosialization

scholarly journals Legal and Regulatory Framework of Islamic Banking and Finance: A Study in Singapore

2019 ◽  
Vol 6 (4) ◽  
pp. 234-244
Author(s):  
Ledy Mahara Ginting ◽  
Nafisah Ruhana ◽  
Nur Haziyah Haji Abdul Halim ◽  
Salsabilla Terra Finieli
Keyword(s):  
Capital Flow ◽  
Regulatory Framework ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Flexible Approach ◽  
Banking And Finance ◽  
Finance Industry ◽  
Muslim Minority ◽  
Shariah Governance

The aim of this paper is to examine the Islamic Banking and Finance (IBF) industry in Singapore. Singapore is known to be a global financial hub with a resilient economy for capital flow. As a Muslim minority country, the Islamic finance industry in Singapore is established and fairly stable. This study analyses Singapore’s legal and regulatory framework of IBF to review the legal and regulatory framework which promotes the development of Islamic finance in Singapore. IBF in Singapore has been treated equally as the conventional banking under the same regulatory framework, with little guidelines on Shariah governance in the country. This paper concludes that the Singaporean government adopts a flexible approach in regulating IBF in Singapore, with little interventions on Shariah matters.

Fudhuli Transactions:Potential Applications and Parameters

2021 ◽  
Vol 12 (3) ◽  
pp. 2801-2811
Author(s):  
Ahmad Zakirullah Mohamed Shaarani Et.al
Keyword(s):  
Islamic Finance ◽  
Islamic Banking ◽  
Banking And Finance ◽  
Library Research ◽  
Do So

Tasarrufal-Fudhuli refers to transactions or contracts carried out by a person who does not have the authority or legitimacy to commit the transaction, and these contracts include exchange contracts such as sales, rent and services, or charitable contracts such as representation/wakalah, hibah, loans, guarantees, and so on. In the context of Islamic finance, although it is a type of transaction that is argued and debated by the jurists and fuqaha, some have begun to realize its great potential in keeping with current developments, especially in the field of Islamic banking and finance. Besides looking at Fudhuli in terms of its meaning and the Shariah rules that govern it, the main focus of this study is the discussion of its dhawabhit/ parameters as it has its own risks associated with it compared to other established types of Islamic contracts. The study utilizes a full library research by analyzing scholar`s debates and their arguments on this kind of contract, the contract`s potential, followed by analyzing the parameters that should be adopted in operationalizing this contract together with the discussion on the issues of fudhulithat are relevant to current Islamic banking and finance operations. The results of this study show that the views that allow this contract has strong arguments, and that it has also been widely practiced outside of Malaysia, but is relatively new in Malaysia. While it is permissible, however, some parameters must be put in place so that it is not in conflict with Shariah, and comply with the Shariah requirement of each contract done on a fudhuli basis. There must also be an urgent and genuine need to do so, and not involve ribawi items that require immediate delivery of the asset, as well as the existence of a council or body that controls and monitors the process and implementation by the involved parties

scholarly journals Towards New Sharia Governance for Islamic Financial Institutions

2021 ◽  
Vol 18 (1) ◽  
pp. 39-58
Author(s):  
Abdulazeem Abozaid
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Financial Institution ◽  
Islamic Banking ◽  
Banking And Finance ◽  
Finance Industry ◽  
Regulatory Authorities ◽  
Governance Model ◽  
Islamic Financial Institutions ◽  
Shariah Governance

Since its inception a few decades ago, the industry of Islamic banking and finance has been regulating itself in terms of Sharia governance. Although some regulatory authorities from within the industry, such as Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Islamic Financial Services Board (IFSB), the Islamic banking and finance industry remains to a great extent self-regulated. This is because none of the resolutions or the regulatory authorities' standards are binding on the Islamic financial institution except when the institution itself willingly chooses to bind itself by them. Few countries have enforced some Sharia-governance-related regulations on their Islamic banks. However, in most cases, these regulations do not go beyond the requirement to formulate some Sharia controlling bodies, which are practically left to the same operating banks. Furthermore, some of the few existing regulatory authorities' standards and resolutions are conflicted with other resolutions issued by Fiqh academies. The paper addresses those issues by highlighting the shortcomings and then proposing the necessary reforms to help reach effective Shariah governance that would protect the industry from within and help it achieve its goals. The paper concludes by proposing a Shariah governance model that should overcome the challenges addressed in the study.Pada awal berdiri, Lembaga Keuangan Syariah merupakan lembaga keuangan yang menerapkan Hukum Syariah secara mandiri dalam sistem operasionalnya. Ia tidak tunduk pada peraturan lembaga keuangan konvensional, sehingga dapat terus berkomiten dalam menerapkan Hukum Syariah secara benar. Selanjutnya, muncullah beberapa otoritas peraturan yang berasal dari pengembangan Lembaga Keuangan Syariah. Diantaranya adalah Islamic Financial Services Board (IFSB) dan Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Hal ini tidak menyimpang dari kerangka peraturan Hukum Syariah, sebab standar peraturan dan keputusan yang dikeluarkan ditujukan khusus untuk Lembaga Keuangan Syariah saja. Beberapa Negara telah menerapkan peraturan tata kelola Hukum Syariah pada Bank Syariah mereka. Namun dalam banyak kasus, peraturan yang diterapkan tidak mampu mengontrol Lembaga Keuangan Syariah tersebut secara penuh. Sehingga, secara praktis proses pengawasan diserahkan kepada lembaga keuangan yang beroperasi. Akan tetapi, beberapa standar dan keputusan yang dikeluarkan oleh sebagian pemangku kebijakan bertentangan dengan keputusan yang dikeluarkan oleh beberapa akademi Fiqh. Artikel ini ditulis untuk menyoroti permasalahan yang timbul pada tata kelola Lembaga Keuangan Syariah, khususnya kekurangan yang tampak pada sistem tata kelola. Kemudian, penulis akan mengajukan usulan tentang efektifitas tata kelola Lembaga Keuangan Syariah yang bebas dari permasalahan.

scholarly journals Analisis Rasch Pada Atribut Perbankan Syariah: Studi pada Generasi Milenial

2019 ◽  
Vol 5 (3) ◽  
pp. 145
Author(s):  
Anggiya Rossana ◽  
Egi Arvian Firmansyah
Keyword(s):  
University Students ◽  
Market Share ◽  
Rasch Analysis ◽  
Primary Data ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking Services ◽  
Finance Industry ◽  
Potential Customers

The presence of Islamic banking in Indonesia is one form of progress and development of the Islamic finance industry in Indonesia. However, for more than 20 years, Islamic banking has apparently not been able to grow optimally and experienced a slowdown in its growth. Islamic banks need to increase their market share and also need to identify which attributes are most considered by the potential customers, especially the millennials whose number is large. This study aims to find out which attributes are most considered in using Islamic banking services. This study uses primary data by distributing online questionnaires to 180 university students in Bandung, namely Unpad, ITB and UPI students. To analyze the data, Rasch analysis was used. The results of Rasch analysis show that cleanliness, friendliness, and Islamic principles turned out to be the most considered attributes in selecting Islamic banking in Indonesia. Given that these three attributes are the most considered, it is expected that Islamic banking strengthen these three aspects in order to increase the market of Islamic finance industry markets.

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