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.

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 Peranan Al-Mudharabah Sebagai Salah Satu Produk Perbankan Syariah Dalam Upaya Mengentaskan Kemiskinan Di Indonesia

2012 ◽  
Vol 8 (2) ◽  
Author(s):  
Dwi Agung Nugroho Arianto
Keyword(s):  
Economic Growth ◽  
Basic Principle ◽  
Small And Medium Enterprises ◽  
Profit Sharing ◽  
Islamic Banking ◽  
Real Sector ◽  
Islamic Banks ◽  
Small Community ◽  
The Real ◽  
Medium Enterprises

One of the fight against poverty can be done by expanding access to Micro, Small and Medium Enterprises (UMKM) in obtaining such capital facilities through Islamic banking. Based on the basic principle of its products, Islamic banks have the financing to the principle of profit sharing, which developed the product mudharabah. This financing is productive because the capital invested for the supply of labor so as to empower the economy through small community of Micro, Small and Medium Enterprises (UMKM). By developing micro, small and medium enterprises it will help create jobs and economic growth in the real sector, thus keeping down unemployment and poverty in Indonesia.

Financial Inclusiveness in Islamic Banking in Pakistan: A Comparison of Ideas and Practices

2018 ◽  
Vol 15 (1) ◽  
pp. 39-54
Author(s):  
Salman Ahmed Shaikh
Keyword(s):  
Financial Intermediation ◽  
Small And Medium Enterprises ◽  
Cost Effective ◽  
Poor People ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Equitable Distribution ◽  
Medium Enterprises ◽  
Quantitative Indicators ◽  
Distribution Of Income

This study attempts to document the progress in Islamic banking industry of Pakistan towards fostering an egalitarian and equitable financial intermediation. It evaluates the progress of Islamic banking in enhancing socio-economic mobility, financial inclusiveness and fostering equitable distribution of income. This study uses a set of quantitative indicators to objectively assess the performance of Islamic banks towards fostering a participative, inclusive, cost-effective and real sector oriented financial intermediation. The results highlight that currently, the performance of Islamic banks on these fronts leaves much to be desired. This study highlights that high average cost of financing and limited focus on agriculture and small and medium enterprises requires improvement to achieve the goal of circulation of wealth and equitable distribution of income. It also identifies that various categories of poor people who need finance for their health, education and small business working capital needs cannot be served by Islamic banks by using the available product structures. This study gives a geographical presence of Islamic banks which shows that they are mainly based in big urban cities. It argues that most of the Islamic banking debt-based products are close, but relatively expensive substitutes. The study will help the industry to review its performance in contributing towards financial inclusiveness, social mobility, need fulfillment and equitable income distribution.

scholarly journals A proposed operational risk management framework for small and medium enterprises

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Micheline J. Naude ◽  
Nigel Chiweshe
Keyword(s):  
Risk Management ◽  
Small And Medium Enterprises ◽  
Relevant Literature ◽  
Management Strategies ◽  
Operational Risk ◽  
Management Framework ◽  
Operational Risk Management ◽  
Operational Risks ◽  
Risk Management Framework ◽  
Medium Enterprises

Background: The gap between small and medium-sized enterprises (SMEs) and large businesses that perform risk assessment is significant. SMEs continuously face many operational risks and uncertainties in their daily operations, and these risks threaten to reduce productivity, increase costs and reduce profits.Aim: The purpose of this article was to develop an operational risk management framework that SMEs can use to identify and analyse risks in their operations and take corrective actions to mitigate these risks.Setting: Small and medium-sized enterprises in South Africa do not view risk management as a key component of organisational success, despite evidence that businesses that adopt risk management strategies are more likely to survive and grow.Methods: The article is exploratory in nature, and a conceptual analysis approach was used to formulate the framework. This study reviewed relevant literature sources on risk published between 2002 and 2017.Results: The four process steps of risk management were used as a reference point and form the foundation for the operational risk management framework. The categories of operational; marketing; technical and financial risks were identified from a review of available literature on risk management.Conclusion: There is a dearth of research that deals with operational risk management frameworks for SMEs. The expected contribution of this article, therefore, is twofold: firstly, it is envisaged that managers or owners of SMEs could use the proposed framework as a tool to appraise and minimise their operational risks; secondly, it will add to the current body of knowledge on risk appraisal for SMEs.

scholarly journals Survey on Sharīʿah non-compliant events in Islamic banks in the practice of tawarruq financing in Malaysia

2020 ◽  
Vol 12 (2) ◽  
pp. 151-169
Author(s):  
Mohammad Mahbubi Ali ◽  
Rusni Hassan
Keyword(s):  
Design Methodology ◽  
Islamic Law ◽  
Islamic Banks ◽  
Content Type ◽  
Management Framework ◽  
Board Of Director ◽  
Risk Management Framework ◽  
Qualitative Research Methodology ◽  
Self Administered Questionnaire ◽  
Practical Implications

Purpose Tawarruq (Islamic commodity financing) has evolved as the most ubiquitous concept in Malaysia’s Islamic banking industry. Nevertheless, the extensive use of tawarruq has invoked a number of Sharīʿah (Islamic law) concerns in its practice. This study aims to investigate the Sharīʿah non-compliant (SNC) phenomena in the practice of tawarruq financing in Malaysia. Design/methodology/approach This study adopts qualitative research methodology, combining both descriptive and content analysis. A self-administered questionnaire was distributed to 16 Malaysian Islamic commercial banks to unveil the Sharīʿah non-compliance issues in the application of tawarruq in Islamic banks (IBs) in Malaysia. Findings The study found that some practices of tawarruq in Malaysia might not comply with the Sharīʿah, mainly due to the improper sequencing of contracts. The study also discovered that IBs adopt different approaches in dealing with SNC events and the income derived therefrom. Finally, the study noted the influence of board of director/management on certain Sharīʿah decisions particularly on the treatment of non-ḥalāl (impermissible) income. Practical implications The findings of the study serve as a reference to industry players and regulators in formulating a Sharīʿah non-compliance risk management framework for tawarruq practices. Originality/value The survey on SNC issues in tawarruq practice constitutes the first of its kind in the existing literature.

Recent trends in Islamic banks’ lending modes in Bangladesh: an evaluation

2016 ◽  
Vol 7 (1) ◽  
pp. 28-41 ◽  
Author(s):  
Yasushi Suzuki ◽  
S. M. Sohrab Uddin
Keyword(s):  
Paradigm Shift ◽  
Banking Sector ◽  
Small And Medium Enterprises ◽  
Theory And Practice ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Recent Trends ◽  
Conventional Banks ◽  
Medium Enterprises

Purpose – This paper aims to assess recent trends in lending modes and to address the reasons for and consequences of changes in Bangladesh’s Islamic banking sector. Design/methodology/approach – Theoretical discourse is used to generate an underpinning for the issues covered by the study. In addition, empirical evidence from the banking sector, including the information derived from interviews with the staff of three Islamic banks, is presented to achieve the research objectives. Findings – The findings clearly demonstrate that the Islamic banking sector has experienced a paradigm shift from participatory financing to asset-based financing. In particular, the murabaha mode of financing dominates the current lending structure, which follows the general trend of the global Islamic banking sector. Research limitations/implications – It is necessary to concentrate on the potential negative outcomes of the trade-based murabaha mode of financing in a developing country such as Bangladesh, as banks have less incentive under protective rent (profit) opportunities to train the experts to screen and monitor projects in other socially desirable sectors such as agriculture and manufacturing including the small and medium enterprises. Originality/value – Despite substantial growth of the Islamic banking sector, less research has been conducted to shed analytical light on the operations of Islamic banks from the perspective of loan disbursement to identify the disparities, if any, in between theory and practice in countries where both Islamic and conventional banks operate simultaneously. Using country-specific evidence, this study contributes to the debate by highlighting the paradigm shift of Islamic banks from participatory financing to the dominance of asset-based murabaha and other modes of lending, by identifying the fundamental causes that contribute to such a shift and by highlighting the consequences of such changes.

scholarly journals DUAL BANKING SYSTEM PASKA MERGER DI INDONESIA

2021 ◽  
Vol 6 (1) ◽  
pp. 77-90
Author(s):  
Arivatu Ni'mati Rahmatika ◽  
Nurvita Putri Romadhani
Keyword(s):  
Small And Medium Enterprises ◽  
Banking System ◽  
Third Party ◽  
Islamic Banks ◽  
The Public ◽  
Library Research ◽  
Before And After ◽  
Credit Financing ◽  
Conventional Banks ◽  
Medium Enterprises

This article explains that (1)  The Post-Merger Dual Banking System is banking that has been implemented in Indonesia. Management of assets together with third party funds with large incomes that have been obtained from conventional banks and Islamic banks, third party funds that run accordance with funding and lending. Conventional banks and Islamic banks provide credit financing to MSMEs (Micro, Small and Medium Enterprises) and differentiate in operations between conventional banks and Islamic banks, (2) this study aims to determine the concept of managing and distributing funds in the dual banking system in Indonesia before and after the merger, (3) the method used is a qualitative method in the form of a library (library research), (4) the results of the study that between Islamic and post-merger conventional banks continue to operate credit funds to the public.

scholarly journals Development Of Small Medium Entreprise With External, Internal, And Religiosity Factors In Islamic Banks

KINERJA ◽  
2017 ◽  
Vol 21 (1) ◽  
pp. 17
Author(s):  
Roikhan Mochamad Aziz
Keyword(s):  
Time Series ◽  
Time Series Data ◽  
Small And Medium Enterprises ◽  
Third Party ◽  
Series Data ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Independent Variables ◽  
Medium Enterprises ◽  
Positive Effect

The purpose of this research is to analyze the influence of external, internal and religiosity variable that proxies to inflation, Bank Indonesia Certificate Sharia (SBIS), Non Performing Financing (NPF) and Third Party Fund (DPK) to Small and Medium Enterprises Financing in the Islamic Bank in Indonesia. The data is used Time Series data periods of January: 2011 – March: 2016 from Statistic Banking of Indonesia by analyzed of Multiple Linear Regression and Hahslm method. The results of this research indicate that the variable Inflation, Bank Indonesia Sharia Certificate (SBIS), Non Performing Financing (NPF) and Third Party Fund (DPK) have partially influence to Small and Medium Enterprises Financing. This is showed by the value of Adjusted R Square of 60,7% while the remaining 39,3% influence by other factors. In this research showed Inflation, Non Performing Financing (NPF) and Third Party Fund (DPK) have a significantly and positive effect on the Small and Medium Enterprises Financing. Meanwhile, Bank Indonesia Sharia Certificate (SBIS) has no significantly effect on Small and Medium Enterprises Financing. Simultaneously, the overall independent variables have a significant influence to Small and Medium Enterprises Financing.Keywords: Inflation, SBIS, NPF, Islamic Banking.

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.

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