scholarly journals The System of Governance in Malaysia, and the Extent of its Effectiveness in Islamic Banks and their Windows in Algeria

2021 ◽  
Vol 4 (Special Issue) ◽  
pp. 75-103
Author(s):  
Mohamed Chourana ◽  
Sana Bensayah ◽  
Aghilas Kashi
Keyword(s):  
Civil Society ◽  
Central Bank ◽  
Islamic Law ◽  
Supervisory Board ◽  
Advisory Board ◽  
The Political ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Financial Industry ◽  
Governance System

This study aimed mainly at identifying the principles of governance in Islamic banks and measuring the extent to which these principles are applied in Islamic banks in Algeria, because what distinguishes Islamic banking is the existence of a Sharia supervisory board that looks at the activities and contracts that result from it. Islamic law as a reference for it in all items. Some countries, on top of them Malaysia, have established the Sharia advisory board at the level of the Central Bank of Malaysia, which is the authority empowered to verify the implementation of the provisions of Islamic law and its obligation in the work of Islamic banks Which represents the Sharia governance of Islamic banks. This research studies the extent to which the political administration provides the necessary infrastructure for the development of the emerging Islamic financial industry in Algeria in all fields, legal, sharia and Financial. Is it possible to establish a Sharia governance system with its controls and standards in the management of Islamic banks in Algeria, and to establish a central law for advisory and Sharia councils? And to what extent is the governance system considered and the extent of its effectiveness considered in Islamic banks, taking advantage of the Malaysian experience? Especially since Algerian Islamic banks do not have the confidence of civil society due to the absence of legitimate governance foundations in them.

scholarly journals System of Governance in Malaysia, and the Extent of its Effectiveness in Islamic Banks and their Windows in Algeria

2021 ◽  
Vol 4 ◽  
pp. 75-103
Author(s):  
Mohamed Chourana ◽  
Sana Bensayah ◽  
Aghilas Kashi
Keyword(s):  
Civil Society ◽  
Islamic Law ◽  
Supervisory Board ◽  
Advisory Board ◽  
Islamic Finance ◽  
The Political ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Financial Industry ◽  
Governance System

هدفت هذه الدراسة إلى التعرف بصفة أساسية على مبادئ الحوكمة في المصارف الإسلامية وقياس مدى  تطبيق تلك المبادئ في المصارف الإسلامية بالجزائر، لأنّ ما يميز الصيرفة الإسلامية هو وجود هيئة رقابية شرعية تنظر في الأنشطة والعقود التي تنتج عنها، وهذا ما يجعلها رائدة في عالم المال، لاتخاذ الشريعة الإسلامية مرجعا لها في كل البنود. ولذلك فإن بعض الدول وعلى رأسهم ماليزيا قامت بانشاء المجلس الإستشاري الشرعي على مستوى البنك المركزي الماليزي، وهو بمثابة السلطة المخولة بالتحقق من تطبيق أحكام الشريعة الإسلامية والإلزام بها في أعمال المصارف الإسلامية، وهو ما يمثل بالحوكمة الشرعية للمصارف الإسلامية. ويعمل هذا البحث على دراسة مدى توفير الإدارة السياسية على البنية التحتية اللاّزمة لتطوير الصناعة المالية الإسلامية في الجزائر الناشئة في كل أبعادها القانونية والشرعية والمالية، وهل يمكن إقامة نظام حوكمة شرعية بضوابطها ومعاييرها في إدارة المصارف الإسلامية بالجزائر، وإنشاء قانون مركزي للمجالس الاستشارية والشرعية؟  وما مدى اعتبار نظام الحوكمة ومدى فعاليته في المصارف الإسلامية، بالاستفادة من التجربة الماليزية؟ خصوصا وأن البنوك الإسلامية الجزائرية لا تحظى بثقة المجتمع المدني بسبب غياب أسس الحوكمة الشرعية بها الكلمات المفتاحية: حوكمة شرعية، المالية الإسلامية، الجزائر، ماليزيا   Abstract This study aimed mainly at identifying the principles of governance in Islamic banks and measuring the extent to which these principles are applied in Islamic banks in Algeria, because what distinguishes Islamic banking is the existence of a Sharia supervisory board that looks at the activities and contracts that result from it. Islamic law as a reference for it in all items. Some countries, on top of them Malaysia, have established the Sharia advisory board at the level of the Central Bank of Malaysia, which is the authority empowered to verify the implementation of the provisions of Islamic law and its obligation in the work of Islamic banks Which represents the Sharia governance of Islamic banks. This research studies the extent to which the political administration provides the necessary infrastructure for the development of the emerging Islamic financial industry in Algeria in all fields, legal, sharia and Financial. Is it possible to establish a Sharia governance system with its controls and standards in the management of Islamic banks in Algeria, and to establish a central law for advisory and Sharia councils? And to what extent is the governance system considered and the extent of its effectiveness considered in Islamic banks, taking advantage of the Malaysian experience? Especially since Algerian Islamic banks do not have the confidence of civil society due to the absence of legitimate governance foundations in them. Keywords: Islamic governance, Islamic finance, Algeria, Malaysia

Islamic Banking in Malaysia†

2012 ◽  
Vol 40 (1-2) ◽  
pp. 191-201 ◽  
Author(s):  
Sherin Kunhibava
Keyword(s):  
Central Bank ◽  
Islamic Law ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Average Growth ◽  
Governance Framework ◽  
Finance Industry ◽  
Asset Growth ◽  
The 1960S ◽  
Shariah Governance

AbstractIslamic banking is the conduct of banking according to Shariah or Islamic law. Statistically Islamic banking has had phenomenal growth, according to the Asian Banker Research Group, the world's 100 largest Islamic banks have set an annual asset growth rate of 26.7% and the global Islamic finance industry is experiencing an average growth of 15-20% annually1. Recently the Prime Minister of Malaysia commented that Malaysia has been maintaining its leadership in Islamic banking and finance for over three decades2. As an International leader in Islamic banking, it would be interesting to explore the development of Islamic banking in Malaysia. This will be the objective of this paper. This paper will focus on the historical development of Islamic banking in Malaysia, from the creation of the Haj Pilgrim's Fund Board in the 1960s to the current Islamic banking scene of 17 local Islamic banks and five International Islamic banks in operation. This paper will also explore the unique regulatory and governance framework of Islamic banking in Malaysia, by touching on the Islamic banking Act 1983, the Central Bank of Malaysia Act 2009, the Banking and Financial Institutions Act 1989 and the Shariah Governance Framework introduced in 2011 by the Central Bank of Malaysia. This paper will also briefly introduce how Islamic banking works.

Sharia’h practice at Islamic banks in Pakistan

2018 ◽  
Vol 9 (3) ◽  
pp. 274-289
Author(s):  
Muhammad Tariq Majeed ◽  
Abida Zainab
Keyword(s):  
Risk Sharing ◽  
Banking Sector ◽  
Islamic Law ◽  
Banking Industry ◽  
Supervisory Board ◽  
Primary Data ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type

PurposeIslamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h particularly in terms of provision of interest free services, risk sharing and legal contract. The purpose of this paper is to empirically evaluate the Sharia’h practice at Islamic banks in Pakistan by considering some basic principles of Sharia’h. Design/methodology/approachPrimary data are collected from 63 branches of Islamic banks in Pakistan. Questionnaire is used as an instrument. The study uses structural equation modeling that includes confirmatory factor analysis and regression analysis. Data are codified and analyzed using SPSS and Amos. FindingsThis study finds that Islamic banks are providing interest free services, ensuring that transactions and contracts offered by Islamic banks are legal and offering conflict-free environment to customers. In contrast, estimated results expose that Islamic banks are not sharing risk and Sharia’h supervisory board is not performing its role perfectly. Similarly, it is found that organization and distribution of zakat and qard-ul-hassan are weak at Islamic banks. Research limitations/implicationsData are collected from Islamabad federal capital of Pakistan that hold just 5 per cent share of Islamic banking industry. This small share may not provide true picture of Islamic banking sector. Practical implicationsTo ensure risk sharing, Islamic banking industry must consider the development of new modes of financing and innovation of more products based on Sharia’h. State Bank of Pakistan should ensure separate regulatory framework that enable Islamic banks to provide qard-ul-hassan, organize and allocate zakat. Originality/valueThis paper discusses the perception of bankers, who are actually the executors, about Shariah’s practices at Islamic banks in Pakistan. There are not many discussions on this topic that could be found, and hence this could be considered as a significant contribution by this paper to the existing literature of Islamic finance.

Independence and effectiveness of Shariah supervisory board of Islamic banks: evidence from an emerging economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Kausar Alam ◽  
Muhammad Shahin Miah
Keyword(s):  
Central Bank ◽  
Banking Sector ◽  
Supervisory Board ◽  
Islamic Banking ◽  
Research Approach ◽  
Islamic Banks ◽  
Legitimacy Theory ◽  
Snowball Sampling ◽  
Content Type ◽  
Theoretical Contribution

PurposeThe main objective of the study is to ascertain the level of independence and the effectiveness of the Shariah Supervisory Board (SSB) members of Islamic banks in Bangladesh. This is because only SSB members are empowered to oversee and certify the overall business functions of Islamic banks.Design/methodology/approachThis paper implements qualitative case research approach to explore the research objective in the context of Bangladesh. We applied purposeful and snowball sampling tactics for selecting respondents. By using a semi-structured questionnaire and face-to-face interviews, we collect data from SSB members, central bank executives and experts in Islamic banking and Shariah governance.FindingsThe study finds that majority Islamic banks' SSB's positions are similar to the Board of Directors (BOD) of the banks. Next, this study finds that in recruiting/selecting SSB members, some banks do not follow the guidelines of the central bank. This study finds mixed evidence regarding the independence of the members of the SSB. Most of the respondents opined that SSBs do not have power; in some cases, members of SSB are not independent and seeming powerless as BOD selects and recruits them. In contrast, they are dependent on management in respect of strategy implementation.Research limitations/implicationsThe study significantly contributed to the national and global regulatory bodies by identifying an important governance determinant of Islamic banks that is the independence of SSB members, which is highly important for both Shariah functions, and to enhance the trust level of the stakeholders. This study makes a theoretical contribution by documenting the violation of stakeholder theory and agency theory in recruiting SSB members by BOD's choice. The lack of SSB members' independence has an impact on Shariah legitimacy of the Islamic banks which is contradictory with the notion of legitimacy theory. This study recommends the central bank to ensure the independence of the SSB and central bank should take initiatives to develop an environment for the Islamic banking sector.Originality/valueThis study extends the literature of corporate governance relating to Islamic banking and financial institutions. More specifically, this paper explores the necessity of independence of members of the monitoring body (here SSB), an important constituent of governance, to ensure high-quality governance and transparency in reporting to increase diverse stakeholders' trust/confidence. The absence of independence of SSB in performing their functions contradicts with the agency, stakeholder and legitimacy theory, which is inconsistent with global evidence, that demands further investigations.

scholarly journals DRAMATURGY: RIBA ON HOME OWNERSHIP LOAN IN ISLAMIC BANKING (CASE STUDY ON BANK BTN SYARIAH KCPS CIPUTAT, TANGERANG SELATAN)

2021 ◽  
Vol 3 (1) ◽  
pp. 25
Author(s):  
Aulia Julian Faizatunazilla ◽  
Siti Jamilah
Keyword(s):  
Islamic Law ◽  
Home Ownership ◽  
Supervisory Board ◽  
Primary Data ◽  
Islamic Banking ◽  
Islamic Banks ◽  
The Public ◽  
Islamic Bank ◽  
Back Stage

The purpose of this study was to determine usury behavior in the Housing Loan or Credit in Islamic banks and to determine the application of the existing contract system in Housing Loans in Islamic banks using the dramaturgy method. The data used in this study is primary data, where researchers conducted interviews directly with the Bank BTN Syariah KCPS Ciputat, a member of the Sharia Supervisory Board and one of the customers who used a House Ownership Credit product at an Islamic bank. The results of this study can be concluded that the front stage that the bank shows to the public is in accordance with the back stage that the bank does not show to the public and Bank BTN Syariah KCPS Ciputat conducts its business in accordance with Islamic law and the fatwa of the National Sharia Council. So that in this study Bank BTN Syariah KCPS Ciputat does not have usury in its business.

دراسة وتحليل تعليمات حوكمة الرقابة الشرعية الصادرة عن بنك الكويت المركزي (Study of the Instructions of Shariah Governance Issued by the Central Bank of Kuwait)

2018 ◽  
Vol 15 (1) ◽  
pp. 105-149
Author(s):  
عبدالعزيز الناهض ◽  
يونس صوالحي
Keyword(s):  
Central Bank ◽  
The State ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance System ◽  
History Of ◽  
The State Of Kuwait ◽  
Shariah Governance

الملخّص تهدف هذه الدراسة إلى تصحيح المفاهيم الواردة في بعض الدراسات السابقة حول نظام الحوكمة الشرعية لدولة الكويت، خصوصاً التصور الخاطئ لبعض هذه الدراسات حول دور هيئة الفتوى بوزارة الأوقاف والشؤون الإسلامية بدولة الكويت. بالإضافة إلى سعي الدراسة لتوثيق تاريخ تطور تعليمات الحوكمة الشرعية الصادرة عن بنك الكويت المركزي، التي قد أغفلت عنها الدراسات السابقة، من خلال تقسيم تاريخ صدور التعليمات إلى ثلاثة مراحل أساسية. وفي الختام تسعى الدراسة إلى تحليل ودراسة تعليمات "حوكمة الرقابة الشرعية في البنوك الكويتية الإسلامية" الصادرة مؤخراً عن بنك الكويت المركزي، مع بيان آثار هذه التعليمات على البنوك الإسلامية العاملة في دولة الكويت. الكلمات المفتاحيّة: مصرفية إسلامية، حوكمة شرعية، رقابة شرعية، بنك الكويت المركزي.              Abstract This study aims at rectifying the concepts contained in some previous studies on the Sharia governance system in the State of Kuwait, especially the misconception of some of these studies on the role of the Fatwa Committee in the Ministry of Awqaf and Islamic Affairs. In addition, the study seeks to document the history of the development of the instructions of the SharÊÑah governance issued by the Central Bank of Kuwait, which has been overlooked by previous studies, by dividing the date of issuing the instructions into three basic stages. Lastly, the study seeks to analyze and study the instructions of the "Governance of SharÊÑah Supervision in Kuwaiti Islamic Banks" issued recently by the Central Bank of Kuwait, with the effect of these instructions on the Islamic banks operating in the State of Kuwait. Keywords: Islamic banking, SharÊÑah governance, SharÊÑah supervision, Central Bank of Kuwait.

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 An Investigation on Sharia Governance in Islamic Banking A Case of Islamic Banks in Oman

2021 ◽  
Vol 8 (7) ◽  
pp. 330-340
Author(s):  
Ziyad Juma Al-Musheifri
Keyword(s):  
Conceptual Framework ◽  
Islamic Law ◽  
Supervisory Board ◽  
Research Paper ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Legal Documents

The concept of Sharia governance in Islamic banks in Oman was highlighted by presenting the conceptual framework for Sharia governance and regulating the Islamic banks through Sharia governance. Finally, the study explains the role of Sharia governance in raising the efficiency of Islamic banks. As this research paper concluded that Sharia governance has a major role in Islamic banks, through the existence of a Sharia supervisory body on all transactions that take place inside these banks, which prevents the occurrence of any activities that violate the provisions of Islamic law, as happens in other banks. The Sharia Supervisory Board for Muzn is the highest authority in the bank with regard to all matters related to Islamic law. It ensures that the commission’s decisions are strictly followed. The Sharia Supervisory Board reviews product papers, structures, policies, and legal documents and all other tasks. The board also provides decisions based on Sharia in all matters and related banking issues, including opinion on all aspects of the bank's commitment to Islamic law. The findings indicated that Sharia governance laws must be applied by Islamic banks and they need to make updates through the SSB and AAOIFI boards. Sharia was found to be a regulatory and supervisory component that Islamic banks must operate under to ensure the religion has been applied within the establishment of the banks.  

scholarly journals Central bank impact on practicing Mudarabah financing in Islamic banks: the case of Tanzania

2019 ◽  
Vol 14 (1) ◽  
pp. 81-93
Author(s):  
Habiba H. Omar ◽  
Mohd E. Yusoff
Keyword(s):  
Central Bank ◽  
Supervisory Board ◽  
Regulatory Regime ◽  
Islamic Banking ◽  
Islamic Banks ◽  
The Public ◽  
Financial Regulations ◽  
Technical Structure ◽  
Bank Managers ◽  
The Impact

This paper investigates the challenges faced by Islamic banks in practicing Mudarabah financing under conventional regulatory regime by interviewing eleven Islamic bank managers from three selected banks. Thematic data analysis was employed to understand hindrances for Islamic banks in operating Mudarabah financing under conventional regulatory regime. Findings of the study have provided a number of major challenges that hinder Islamic banks performance in Tanzanian context. The challenges include irregularities of policies and regulations, non-supportive operational and technical structure, and missed perceptions of Mudarabah among the public. However, a new challenge of the impact of the central bank on Islamic banks was identified. It is expected that Tanzanian Islamic banking performance will enhance if the central bank introduces sharia regulations for Islamic banking, initiates the central sharia supervisory board, and harmonize country regulations with financial regulations regarding Islamic perspectives.

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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