scholarly journals Shari'aa supervision on Islamic banks in the light of economic transformations: الرقابة الشرعية على المصارف الإسلامية في ظل التحولات الاقتصادية

2016 ◽  
Vol 2 (8) ◽  
Author(s):  
Mohammed Yousef Al Deek
Keyword(s):  
Corporate Governance ◽  
Economic Activity ◽  
Public Awareness ◽  
Banking System ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Applicable Law ◽  
Economic Transformations ◽  
Banking Business

In this research is marked by censorship legitimate and which are based on the follow-up of economic activity of Islamic banks by suitable means until we are sure of the work in accordance with the principles of religion Shara, and in order to keep pace with the rapid developments and sudden changes. It highlighted the importance of the Sharia Supervisory basic requirements escort this shift represented in the prestigious and legitimate autonomy of the work committed to the purposes Sharia Supervisory Board without inertia of sergeant when contracts form the qualities and work to raise public awareness of the nature of the banking business and practice of corporate governance as a principle backer of the safety of the banking system and be a supreme body as a reference to senior oversight bodies Note legitimacy with arms culture of applicable law and should such control be integrated and comprehensive in its various stages

scholarly journals PERAN TATA KELOLA PERBANKAN SYARIAH TERHADAP RISIKO PERBANKAN SYARIAH DI INDONESIA

2020 ◽  
Vol 8 (1) ◽  
pp. 45
Author(s):  
Rudy Hartanto
Keyword(s):  
Corporate Governance ◽  
Credit Risk ◽  
Good Governance ◽  
Banking System ◽  
Islamic Banking ◽  
Investment Risk ◽  
Islamic Banks ◽  
Control Variables ◽  
Banking Market ◽  
Banking Business

The increased penetration of the Islamic banking market in Indonesia is one of the highest in ASIA. The enhancement in the market has an impact on increasing the risk complexity of Islamic banking business activities. Sharia banking risks need to be managed and controlled properly in order to prevent banking failures. Bank governance (corporate governance) is indicated as one of the things that plays an important role in determining the level of risk faced by banks. The purpose of this study is to examine whether good governance can reduce the risk of Islamic banking. This study uses the population of Islamic banking from 2014-2018. The samples obtained in this study are 58 Islamic banks. The results showed that good governance can reduce the banking risk. In addition, the testing using control variables showed that the greater the size of the banking system that is proxied by the total assets, the higher the risk received by banks both from credit risk to investment risk.

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.

scholarly journals Pola dan Perkembangan Perbankan Syariah di Indonesia

2019 ◽  
Vol 3 (1) ◽  
pp. 34-41
Author(s):  
Ahmad Khoirin Andi
Keyword(s):  
Financial Institutions ◽  
Banking System ◽  
Supervisory Board ◽  
Islamic Banking ◽  
Islamic Banks

The development of Islamic banking in Indonesia with the complexity of the problem in its journey has shown good results and as a reference for the pattern and strategy for developing financial institutions. Islamic banking with its (the) sharia principles of avoiding usury practices and prioritizing mutual benefits have proven to be a complete banking system. But besides that, additional supervision is needed to ensure the implementation of sharia principles, namely by the existence of a sharia supervisory board (DPS) to implement fatwas as guidelines for the operation of Islamic banks issued by the National Sharia Council (DSN).

Corporate Governance in Islamic Banks

2021 ◽  
pp. 322-337
Author(s):  
Sami Ben Mim ◽  
Yosra Mbarki
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Transmission Channels ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
Corporate Governance Mechanism

This study investigates the efficiency of the Shariah supervisory board as a corporate governance mechanism in Islamic banks. The authors mainly seek to examine the effect of the Shariah board's composition (size and academic background of its members) on the performance of Islamic banks. They also try to highlight the transmission channels explaining this effect, and compare the efficiency of the Shariah board with that of traditional corporate governance mechanisms, namely the board of directors. The empirical investigation is based on a sample of 72 Islamic banks from 19 countries. Estimation results suggest that the Shariah board positively affects the Islamic banks performance through the number of Islamic Shariah scholars. This effect is mainly due to the size and cost transmission channels. These results are robust to different performance measures. On the other hand, results show that the board of directors' size produces a positive effect on a bank's performance, offering evidence for complementarity between traditional and Islamic governance mechanisms.

scholarly journals TATA KELOLA DAN RISIKO BANK SYARIAH DI INDONESIA PERIODE 2008-2016

2018 ◽  
Vol 14 (2) ◽  
pp. 172
Author(s):  
Siti Mutmainah
Keyword(s):  
Corporate Governance ◽  
Central Bank ◽  
Audit Committee ◽  
Risk Control ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Research Focus ◽  
Financing Risk

This study investigates the effect of corporate governance on Islamic bank’s risk in Indonesia during 2008-2016. The bank’s governance consists of board of commissioner (including risk control committe and audit committee), management, and sharia supervisory board. Because of the existence of these boards is a mandatory, hence this research focus on the amount of members and meetings in each board and committee. Results show that the amount of meetings held by management and risk control committee negatively influence the financing risk. This research implies the Islamic banks to strenghten their governance to control their banks’ risk. This research also recommends Central Bank and National Sharia Board to be more effective in performing its supervisory function.

scholarly journals Islamic corporate governance and financial statements fraud: A study of Islamic banks

2021 ◽  
Vol 10 (2, special issue) ◽  
pp. 361-368
Author(s):  
Hasan Mukhibad ◽  
Prabowo Yudo Jayanto ◽  
Indah Anisykurlillah
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Supervisory Board ◽  
Financial Statements ◽  
Financial Statement ◽  
Islamic Banks ◽  
Financial Statement Fraud ◽  
External Auditors ◽  
Or Economics ◽  
Incorrect Information

Financial statement fraud (FSF) in Islamic banks is unethical because it generates incorrect information for the stakeholders (Anisykurlillah, Jayanto, Mukhibad, & Widyastuti, 2020; Obid & Demikha, 2011). We identify some institutional factors, specifically corporate governance, as factors that can control FSF. Using the sample of Islamic banks in Indonesia, we found that the attributes of the bank’s Sharia Supervisory Board (SSB), such as its expertise, the number of members, and the number of meetings it holds, can reduce FSF. Besides, the number of audit committee members, and the reputation of the external auditors, can also help control FSF. This research does not find any influence of the board of commissioners’ structure toward FSF. Another finding is that of the three SSB attributes used in this research, the most decisive influence for controlling FSF is each SSB’s expertise in accounting, finance, or economics. We suggest that every SSB should have experts in those fields to complement the expertise in Islamic legal fields.

scholarly journals Characteristics of Shari’ah Governance and Incidence of Charity: A case of Pakistan

2020 ◽  
Vol 5 (2) ◽  
pp. 77-91
Author(s):  
Mohammad Ayaz ◽  
◽  
Noman Arshed ◽  
Ikram ul Haq ◽  
◽  
...  
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Quantitative Methods ◽  
Panel Data Analysis ◽  
Supervisory Board ◽  
Financial Statements ◽  
Islamic Banks ◽  
Supervisory Boards ◽  
Unbalanced Panel Data

Characteristics of Shari’ah Governance and Incidence of Charity: A case of Pakistan There are several studies which have evidenced the role of Shari’ah governance on the profitability of Islamic banks for different countries in different data setup. The main purpose of Shari’ah governance is derived from the concept of corporate governance to avoid any non-compliant transactions and book charity against any non- compliant income. There are two kinds of Shari’ah supervisory boards. First is the proactive type that follows the rule of ‘Hisba’ which restricts any non-compliant transaction before it happens. The second type is reactive which detects and reacts to the non-compliant transactions following the Islamic legal system when they happen. The first type would conclude to a reduction in the incidence of charity transactions. In contrast, the second type would conclude to increase in the incidence of charity transaction. The objective of this study is to explore whether the Shari’ah governance of Islamic banks of Pakistan is jointly proactive or reactive. This study is deductive and uses quantitative methods. This study builds an unbalanced panel data of full-fledged Islamic banks of Pakistan using the available data from financial statements. This study is one of its kinds to see the nature of Shari’ah governance based on empirical patterns using Panel FGLS model. The results show that board size, board expertise, and reputation are the reactive factors while the others are proactive factors. Keywords: Shari’ah Supervisory Board, Panel Data Analysis, Shari’ah Disclosure, Shari’ah Controls.

scholarly journals PENGARUH ISLAMIC CORPORATE GOVERNANCE TERHADAP KINERJA BANK SYARIAH: STUDI EMPIRIS INDONESIA DAN MALAYSIA

2021 ◽  
Vol 8 (2) ◽  
pp. 243
Author(s):  
Faris Achmad Muhtadin Billah ◽  
Bayu Arie Fianto
Keyword(s):  
Corporate Governance ◽  
Gender Diversity ◽  
Control Variable ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Panel Data Regression ◽  
Data Regression ◽  
Negative Effect ◽  
The Impact ◽  
Simultaneous Influence

ABSTRAKPenelitian ini bertujuan untuk mengetahui pengaruh karakteristik Islamic corporate governance terhadap kinerja bank syariah di Indonesia dan Malaysia. Dengan menggunakan regresi data panel 28 bank syariah di Indonesia dan Malaysia periode 2013-2019, penelitian ini menemukan adanya pengaruh Islamic corporate governance (ICG) secara simultan terhadap kinerja bank syariah. Hasil estimasi dengan dan tanpa variabel kontrol menunjukkan hanya variabel tingkat pendidikan Dewan Pengawas Syariah (DPS) yang konsisten memiliki pengaruh negatif signifikan terhadap kinerja bank syariah. Dengan menambahkan variabel kontrol, hasil penelitian menunjukkan bahwa variabel gender diversity dan frekuensi rapat DPS masing-masing berpengaruh positif dan negatif terhadap kinerja bank syariah. Hasil penelitian ini memberikan wawasan bagi regulator untuk dapat meningkatkan kinerja bank syariah melalui praktik ICG. Kata Kunci: Bank syariah, Dewan Pengawas Syariah, Indonesia, Islamic corporate governance, Kinerja bank, Malaysia. ABSTRACTThis study aims to determine the impact of Islamic corporate governance characteristics on the performance of Islamic banks in Indonesia and Malaysia. By using panel data regression of 28 Islamic banks in Indonesia and Malaysia for the 2013-2019 period, this study found the simultaneous influence of Islamic corporate governance (ICG) characteristics on the performance of Islamic banks. The results with and without control variables show that only the Sharia Supervisory Board (SSB) education level consistently has a significant negative effect on the performance of Islamic banks. By adding the control variable, the results show that the gender diversity variable and the frequency of SSB meetings have a positive and negative effect on the performance of Islamic banks, respectively. The results of this study provide insights for regulators to improve the performance of Islamic banks through ICG practices.Keywords: Bank performance, Indonesia, Islamic corporate governance, Islamic banks, Malaysia, Syariah Supervisory Board.

scholarly journals The Role of Islamic Corporate Governance and Risk Toward Islamic Banking Performance: Evidence from Indonesia

2021 ◽  
Vol 22 (3) ◽  
pp. Layouting
Author(s):  
Emile Satia Darma ◽  
Akhsyim Afandi
Keyword(s):  
Corporate Governance ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Governance Mechanisms ◽  
Business Units ◽  
Corporate Governance Mechanisms ◽  
Negative Effect ◽  
Conventional Banks ◽  
Positive Effect

Research aims: This study aims to analyze the role of Islamic corporate governance mechanisms on the performance of Islamic banks. Besides, it also analyzes the effect of risk profiles, especially those that are directly related to bank financing, on the performance of Islamic Banks.Design/Methodology/Approach: Sharia banks that become the objects are Sharia Commercial Banks (SCB) and Sharia Business Units of Conventional Banks (SBU). This study uses data from 20 sharia banks (11 SCB and 9 SBU). The analytical tool used in this study is panel data regression.Research findings: The results show that the meeting frequency of the Board of Commissioners, Sharia Supervisory Board (SSB), Financing to Deposits Ratio (FDR), and bank size have a significant positive effect on the performance of Islamic banks. Non-Performing Financing (NPF) has a significant negative effect on the performance of Islamic banks.Theoretical contribution/Originality: This study utilized Stakeholders theory, Maqoshid Sharia concept, and corporate governance to investigate the role of Islamic corporate governance mechanisms and risk management on sharia Banks performance.Practitioner/Policy implication: The implication of this study is that SSB activities had a direct and robust influence on Islamic Banks, which have relatively larger assets. Hence, the task of the Sharia Supervisory Board should not be limited to only monitoring the conformity of transactions with sharia but also providing input so that banks can increase their profits in line with sharia.Research limitation/Implication: The limitation in this study is the number of corporate governance variables that was limited.

scholarly journals The relationship between agency theory, stakeholder theory and Shariah supervisory board in Islamic banking

Humanomics ◽  
2017 ◽  
Vol 33 (1) ◽  
pp. 75-83 ◽  
Author(s):  
Sulaiman Abdullah Saif Al-Nasser Mohammed ◽  
Joriah Muhammed
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Stakeholder Theory ◽  
Supervisory Board ◽  
Theoretical Background ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Perspective ◽  
The Difference

Purpose In relation to the critical problem, this paper aims to present an understanding of the agency theory and the stakeholder theory from the perspective of the Islamic principles. Indeed, a thorough examination of the theoretical background explaining corporate governance from the Islamic perspective is necessary to conduct research analysing corporate governance in Islamic banks. Design/methodology/approach The authors followed a critical review discussion; this method takes into consideration presenting important theories and comparing those theories with Islamic perspective. Findings The authors presented important arguments on the difference between ordinary theories to explaining corporate governance and Islamic perspective. The paper browsed into whether the Shariah Supervisory Board is a fit with the agency theory by explaining the agency theory and how it differs from the Islamic banking concepts. The paper involved an analytical review on stakeholder theory and presented a critique and the rationale as to why there is ample room for the Shariah Supervisory Board to be considered a fit with the stakeholder theory, as the Shariah Supervisory Board is an independent body influencing the firm. Originality/value The paper is of important value to those conducting research in the area of governance in Islamic banks; they may find it beneficial in terms of underlining theory building their research framework.

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