scholarly journals ANALYSIS OF THE EFFECT OF ISLAMIC BANK INCOME AND INCOME CONVENTIONAL BANKS AGAINST BANK PROFITABILITY

2022 ◽  
Vol 2 (1) ◽  
pp. 33-46
Author(s):  
Muhammad Erwin SP ◽  
Saparuddin Siregar ◽  
Sugianto Sugianto
Keyword(s):  
Field Survey ◽  
Islamic Banks ◽  
Payment Method ◽  
Bank Profitability ◽  
Islamic Bank ◽  
Three Stages ◽  
Conventional Banks ◽  
Banda Aceh

Bank Syariah Indonesia has sharia contracts that can make it easier for customers to get consumptive financing such as financing in the purchase of cars/motorcycles, but many people do not know that Islamic banks have such consumptive financing products. Based on the results of research on the mechanism and application of consumptive financing on the Oto iB Hasanah BNI Syariah Banda Aceh product, this can be done in three stages, namely: First, the customer applies for consumptive financing for the Oto iB Hasanah BNI Syariah Banda Aceh product by completing the file, second, checking data or verifying data for completeness and the truth of the file, thirdly, a field survey with the 5C principle (Character, Capacity, Capital, Condition and Collateral). murabahah namely an agreement on profit, payment method, sale and purchase agreement and delivery of goods.

Is Islamic bank profitability driven by same forces as conventional banks?

2016 ◽  
Vol 9 (1) ◽  
pp. 46-66 ◽  
Author(s):  
Hajer Zarrouk ◽  
Khoutem Ben Jedidia ◽  
Mouna Moualhi
Keyword(s):  
Dynamic Panel Data ◽  
Islamic Banking ◽  
Subprime Crisis ◽  
Islamic Banks ◽  
Mena Region ◽  
Bank Profitability ◽  
Content Type ◽  
Large Sample ◽  
Islamic Bank ◽  
Conventional Banks

Purpose The purpose of this paper is to ascertain whether Islamic bank profitability is driven by same forces as those driving conventional banking in the Middle East and North Africa (MENA) region. Distinguished by its principles in conformity with sharia, Islamic banking is different from conventional banking, which is likely to affect profitability. Design/methodology/approach The paper builds on a dynamic panel data model to identify the banks’ specific determinants and the macroeconomic factors influencing the profitability of a large sample of 51 Islamic banks operating in the MENA region from 1994 to 2012. The system-generalized method of moment estimators are applied. Findings The findings reveal that profitability is positively affected by banks’ cost-effectiveness, asset quality and level of capitalization. The results also indicate that non-financing activities allow Islamic banks to earn higher profits. Islamic banks perform better in environments where the gross domestic product and investment are high. There is evidence of several elements of similarities between determinants of the profitability for Islamic and conventional banks. The inflation rate, however, is negatively associated with Islamic bank profitability. Practical Implications The authors conclude that profitability determinants did not differ significantly between Islamic and conventional banks. Many factors are deemed the same in explaining the profitability of conventional as well as Islamic banks. The findings reported in the current paper might be of interest for policy makers. It is recommended to better implement non-financing activities to improve Islamic bank profitability. Originality/value Unlike the previous empirical research, this empirical investigation assesses the issue whether Islamic banks profitability is influenced by same factors as conventional model. It enriches the literature in this regard by considering the specificities of Islamic banking to identify the determinants of profitability. Moreover, this study considers a large sample (51 Islamic banks) through a different selection of countries/banks than previous studies. In addition, the period of study considers the subprime crisis insofar it ranges from 1994 to 2012. Hence, this broader study allows the authors to draw more consistent conclusions.

Determinants of Islamic Bank Profitability: Evidence from Indonesia

2020 ◽  
Vol 5 (1) ◽  
pp. 1-13
Author(s):  
Puji Sucia Sukmaningrum ◽  
Kashan Pirzada ◽  
Sylva Alif Rusmita ◽  
Fatin Fadhilah Hasib ◽  
Tika Widiastuti ◽  
...  
Keyword(s):  
Interest Rate ◽  
Quality Management ◽  
Banking Industry ◽  
External Factors ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Return On Assets ◽  
Internal Factors ◽  
Bank Profitability ◽  
Islamic Bank

Objective – Islamic Banks have a distinct advantage that is not only conduct a commercial operation, but to also conduct social operations. Therefore, Islamic Banks plays an important role in developing the Indonesian economy. The aim of this study is to investigate the impact of internal and external factors that affect the profitability of Islamic Banks in Indonesia. Methodology/Technique – The methodology of this research is multiple regression. The object of this research is the Islamic banking industry in Indonesia. Internal factors include size, liquidity, asset quality, management, and efficiency ratio. External factors include interest rate and inflation. Return on Assets is used to measure profitability. The monthly data is collected from the financial reports of Islamic Banks between 2011 to 2016. Findings – The findings show that size, liquidity, assets quality, management ratio, interest rate and inflation lead to a greater Return on Assets (profitability) in Islamic Banks in Indonesia. Efficiency however does not have a significant effect on profitability of Islamic Banks in Indonesia. Novelty – Based on the results of this research, it can be concluded that the Islamic banking industry can use those variables to improve the profitability of Islamic banks in the future. In addition, there are two variables that affect the profitability of Islamic banking industry. For the Islamic banking industry should anticipate the movement of inflation and interest to improve the profitability of Islamic banks. Type of Paper: Empirical paper. Keywords: Islamic Banks; Profitability; Internal Factors; External Factors; Indonesia. Reference to this paper should be made as follows: Sukmaningrum, P.S; Pirzada, K; Rusmita, S.A; Hasib, F.F; Widiastuti, T; Hendratmi, A. 2020. Determinants of Islamic Bank Profitability: Evidence from Indonesia, J. Fin. Bank. Review, 5 (1): pp. 01 – 13 https://doi.org/10.35609/jfbr.2020.5.1(1) JEL Classification: G21, G24.

Integration of Islamic bank specific risks and their impact on the portfolios of Islamic Banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Alamdar Ali Shah ◽  
Raditya Sukmana ◽  
Bayu Arie Fianto
Keyword(s):  
Risk Management ◽  
Portfolio Diversification ◽  
Islamic Banks ◽  
Content Type ◽  
Management Framework ◽  
Risk Return ◽  
Islamic Bank ◽  
Risk Management Framework ◽  
Impact Risk ◽  
Conventional Banks

Purpose This study aims to propose a risk management framework for Islamic banks to address specific risks that are unique to Islamic bank settings. Design/methodology/approach A unique methodology has been developed first by exploring the dynamics and behaviors of various risks unique to Islamic banks. Second, it integrates them through a series of diagrams that show how they behave, integrate and impact risk, returns and portfolios. Findings This study proposes a unique risk-return relationship framework encompassing specific risks faced by Islamic banks under the ambit of portfolio theory showing how Islamic banks establish a steeper risk-return path under Shariah compliance. By doing so, this study identifies a unique “Islamic risk-return” nexus in Islamic settings as an explanation for the concern of contemporary researchers that Islamic banks are more risky than conventional banks. Originality/value The originality of this study is that it extends the scope of risk management in Islamic banks from individual contract-based to an integrated whole, identifying a unique transmission path of how risks affect portfolio diversification in Islamic banks.

scholarly journals KIAI AND ISLAMIC BANK (The Typology of Kiai Based on Their Perception and Behaviour toward Islamic Bank)

1970 ◽  
Vol 5 (1) ◽  
pp. 1-8
Author(s):  
AM. M. Hafidz MS ◽  
Agus Fakhrina
Keyword(s):  
Sampling Technique ◽  
Phenomenological Approach ◽  
Primary Data ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Central Java ◽  
Conventional Banks ◽  
Important Position ◽  
Qualitative Phenomenological ◽  
And Behavior

This article aims to explain the perceptions and behavior of Moslem scholars (ulama/kiai) on the coast of Central Java toward Islamic banks. It is unassailable that finding out the kiai’s perception and behavior toward Islamic banks becomes unavoidable because the kiai occupies a very important position in the social structure as an agent of social change. In order to have an approriate understanding toward the perception and behavior, this study used qualitative-phenomenological approach. The main source of primary data were obtained from the kiai in Pekalongan region by using purposive sampling technique. Indepth-interview as the prominent method in gaining data was reinforced by observation method. To get validity of data, internal and external validity were performed. The former was taken through four stages, namely triangulation, emic process, member checking and prolonged time; and the latter through transferability. Data were analyzed inductively through three cronological steps, e.i. data reduction, display and conclusion drawing. Based on the perceptions and behavior of scholars toward Islamic banks, this study concludes that there are three categories of kiai. The first is an idealist compromise (kompromis-idealis) which argues that Islamic banks do not fully comply with sharia compliance yet, the use of Islamic banks is compulsory and conventional banks are not substitutes for Islamic banks. The second is a realistic compromise (kompromis realistis) which infers that Islamic banks are not fully accordance with sharia commpliance, the use of Islamic banks is not mandatory, but conventional banks are not substitutes for Islamic banks. The third is resistance (resisten) which argues that Islamic banks are not much different from conventional banks, so making use of Islamic bank is not obligation, and conventional banks substitute Islamic banks.

Islamic bank rent

2014 ◽  
Vol 7 (2) ◽  
pp. 170-181 ◽  
Author(s):  
Yasushi Suzuki ◽  
S.M. Sohrab Uddin
Keyword(s):  
Empirical Evidence ◽  
Banking Sector ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Franchise Value ◽  
Conventional Banks ◽  
First Time ◽  
Rent Theory

Purpose – This paper aims to draw on the bank rent approach to evaluate the existing pattern of financing of Islamic banks and to propose a fairly new conceptualization of Islamic bank rent. Design/methodology/approach – The bank rent theory is adopted to generate the theoretical underpinnings of the issue. After that, empirical evidence from the banking sector of Bangladesh is used to support the arguments. Findings – Repeated transactions under murabaha are observed in the Islamic banking sector of Bangladesh. The asset-based financing gives the Bangladeshi Islamic banks relatively higher Islamic bank rent opportunity for protecting their “franchise value” as Shari’ah-compliant lenders, while responding to the periodic volatility in transaction costs of profit-and-loss sharing. Research limitations/implications – The bank rent approach suggests that the murabaha syndrome can be ironically justifiable. On the other hand, the current profit-and-loss sharing risk provides an idea of the difficulty in assuming the participatory financing with higher credit risk in practice. Islamic scholars and the regulatory authority need to design an appropriate financial architecture which can create different levels of rent opportunities for Islamic banks to avail the benefit from the variety of Islamic financing as declared by Islamic Shari’ah. Originality/value – This paper introduces a fairly new concept of “Islamic bank rent” to make sense of the murabaha syndrome. This approach also contributes to clarifying the unique risk and cost to be compensated with the spreads that Islamic banks are expected to earn. To draw empirical evidence, as far as it could be ascertained, the data of both Islamic banks and conventional banks with Islamic banking windows/branches are used for the first time.

scholarly journals ANALISIS PERLAKUAN AKUNTANSI GADAI EMAS SYARIAH PADA BANK BJB SYARIAH KANTOR CABANG PEMBANTU KARAWANG

1970 ◽  
Vol 1 (1) ◽  
Author(s):  
Mumun Maemunah
Keyword(s):  
Islamic Banking ◽  
Islamic Banks ◽  
Business Unit ◽  
Islamic Bank ◽  
Conventional Banks

ABSTRAK: Undang-undang Nomor 21 Tahun 2008 tentang perbankan syariah, merupakan peraturan yang menjadi landasan perbankan syariah dalam menjalankan kegiatannya bank syariah melakukan inovasi-inovasi melalui produk yang ditawarkan agar tetap bisa bersaing secara sehat dengan bank konvensional.Praktek gadai emas pada dasarnya tidak melanggar hukum atau peraturan nasional. Bank Indonesia telah mengeluarkan peraturan mengenai produk-produk yang akan ditawarkan oleh Bank Syariah kepada nasabahnya. Yaitu melalui peraturan Bank Indonesia Nomor 10/17/PBI/2008 tentang Bank Syariah dan Unit Usaha Syariah. Praktek gadai emas pada dasarnya tidak melanggar hukum atau peraturan nasional. Bank Indonesia telah mengeluarkan peraturan mengenai produk-produk yang akan ditawarkan oleh Bank Syariah kepada nasabahnya. Yaitu melalui peraturan Bank Indonesia Nomor 10/17/PBI/2008 tentang Bank Syariah dan Unit Usaha Syariah. Kata Kunci : Akuntansi, Gadai Emas, Syariah ABSTRACT: Law No. 21 of 2008 concerning Islamic banking, the rules that form the basis of Islamic banking in performing activities of Islamic banks make innovations through products offered in order to remain able to compete fairly with conventional banks. The practice of pawning gold is basically not violate national laws or regulations. Bank Indonesia has issued a regulation regarding the products that will be offered by the Islamic Bank to its customers. Namely through regulation of Bank Indonesia Number 10/17 / PBI / 2008 regarding Sharia Bank and Sharia Business Unit. The practice of pawning gold is basically not violate national laws or regulations. Bank Indonesia has issued a regulation regarding the products that will be offered by the Islamic Bank to its customers. Namely through regulation of Bank Indonesia Number 10/17 / PBI / 2008 regarding Sharia Bank and Sharia Business Unit. Keywords: Accounting, Gold Pawn, Sharia

scholarly journals Assessing satisfaction among Islamic Bank Customers’ in Bangladesh

2018 ◽  
Vol 10 (3) ◽  
pp. 1377-1405
Author(s):  
Kashrima Nawreen ◽  
Suhaily Shahimi
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Significant Relationship ◽  
Islamic Banks ◽  
Contrast Level ◽  
Significant Percentage ◽  
Independent Variables ◽  
Islamic Bank ◽  
Long Run ◽  
Conventional Banks

This study is conducted to assess the level of customer satisfaction in Islamic banks from the context of Bangladesh.  In the process, 300 questionnaires were distributed, and 236 were returned completed.  The results of the questionnaire analysis reveal that there is significant relationship between three of the independent variables, namely- tangible products, personnel service quality and level of commitment to customer satisfaction.  In contrast, level of compassion does not have a significant relationship with customer satisfaction.  The analyses further reveal that the respondents were satisfied with the overall Islamic Banks’ infrastructure operating in Bangladesh, and most of the respondents did not have intentions to switch to the conventional counterparts.  However, the main reason for the account holders to switch to Islamic banks is because they wanted to deal with Shahriah compliant banking.  The analyses also indicate that a significant percentage of the respondents have accounts with both Islamic banks and conventional banks.  The study has suggested that Islamic Banks should enhance Shahriah compliant framework to generate more income, experience speedy growth, and remain sustainable in the long run. 

scholarly journals Examining the Nexus between Riba and Gharar, and Islamic Banking Products Among Zanzibar People

2021 ◽  
pp. 27-34
Author(s):  
Hamad Mohammed Shkeily ◽  
Naziruddin Abdullah
Keyword(s):  
Hypothesis Test ◽  
Reliability And Validity ◽  
Income Level ◽  
The Other ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Other Hand ◽  
The People ◽  
Conventional Banks

This paper aims at examining the nexus between riba, gharar and income level, and Islamic Banking Products among Zanzibar people. The Islamic bank products such as Murabahah, Musharakah, Mudarabah, Ijarah, Hawalah, Takaful and Sukuk were considered as independent variables for this study. On the other hand, the dependent variables investigated were three (3) namely riba, gharar and income level. A total of 116 respondents consisting of Zanzibar people residing in different districts responded to the survey questionnaire via google form. The study used statistical techniques to analyse the collected data in terms of demographic, descriptive, reliability and validity analysis and presented by charts, tables and curves. The hypothesis test has been conducted using correlation analysis. Statistically, the finding revealed that, the people of Zanzibar were against Riba but in favour of Murabahah, Musharakah, Mudarabah, Ijarah, Hawalah, Takaful and Sukuk with p≤0.01. The result also revealed that the people of Zanzibar were against gharar with p≤0.01. On the other hand, income level showed a significant correlation against Mudarabah, Ijarah, Hawalal, Takaful and Sukuk as p≤0.01. These findings suggest that the products and services of Islamic banks have a significant relationship with Riba, Gharar and level of income for Islamic banks’ shariah priority. It is also shown that riba and gharar were significantly impacted the people of Zanzibar for the influence on the acquisition of Islamic bank facilities which are vital on direct effects that attract customers and investors in which they are customised from conventional banks products. As the awareness level from these Islamic products are high, it is recommended that Islamic banks should focus in designing Islamic banks products (Murabahah, Musharakah, Mudarabah, Ijarah, Hawalah, Takaful and Sukuk) that will comply with Shariah requirement.

scholarly journals COMPARISON OF ISLAMIC BANKING PERFORMANCE IN INDONESIA, PAKISTAN, AND BANGLADESH: SHARIA MAQASHID INDEX APPROACH

2021 ◽  
Vol 10 (1) ◽  
pp. 1
Author(s):  
Mohammad Nur Rianto Al Arif ◽  
Dede Yati
Keyword(s):  
Performance Indicators ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Index Approach ◽  
And Performance ◽  
Conventional Banks ◽  
The One ◽  
Islamic Values ◽  
One Way Anova

There is a different characteristic between Islamic banks and conventional banks, so Islamic banks must have performance measures based on Islamic values in them. This study aims to measure the performance of Islamic banks in three countries - Bangladesh, Indonesia, and Pakistan - using the Sharia Maqashid Index. Also, this study examined whether there were differences in Sharia Maqashid Islamic bank indexes in the three countries using the one-way ANOVA test. The results of the study, in general, showed that the Al-Arafah Islamic Bank of Bangladesh received the highest score, followed by Bank of BNIS and Bank of BRIS. Besides, the results of the study also showed that there were differences in performance. This result implies that Islamic banks should use the maqashid sharia framework as a benchmark for their objective and performance indicators.========================================================================================================ABSTRAK – Perbandingan Kinerja Perbankan Syariah di Indonesia, Pakistan, dan Bangladesh: Pendekatan Indeks Maqashid Syariah. Terdapat perbedaan karakteristik antara bank syariah dan bank konvensional, sehingga ukuran kinerja bank syariah harus didasarkan pada nilai-nilai syariah yang terdapat di dalamnya. Penelitian ini bertujuan untuk mengukur kinerja bank syariah di tiga negara yaitu Bangladesh, Indonesia, dan Pakistan dengan menggunakan Sharia Maqashid Index. Selain itu, penelitian ini juga menguji apakah ada perbedaan indeks bank syariah Maqashid Syariah di tiga negara dengan menggunakan uji one-way ANOVA. Hasil penelitian secara umum menunjukkan bahwa Bank Islam Al-Arafah Bangladesh memperoleh skor tertinggi, disusul oleh Bank BNIS dan Bank BRIS. Selain itu, hasil penelitian juga menunjukkan adanya perbedaan kinerja di tiga negara tersebut. Hasil ini menyiratkan bahwa bank syariah harus menggunakan kerangka maqashid syariah sebagai tolok ukur tujuan dan indikator kinerjanya.

scholarly journals Analisis Akad Mudharabah di Perbankan Syariah

2017 ◽  
Vol 11 (1) ◽  
pp. 16
Author(s):  
Hidayati Nasrah
Keyword(s):  
Islamic Banking ◽  
Islamic Banks ◽  
Gift Giving ◽  
Islamic Bank ◽  
Ownership Status ◽  
Conventional Banks

This study tried  to  see  mudharabah  practices  by  Islamic banks, whether the implementation  and practice  mudharabah  is in accordance with  Islamic Shari'a. In this study  also  described  the practice of  gift-giving  in early  when customers  deposit  funds  in Islamic banks. Practices  carried out  by the  Islamic Bank  raises  a lot of  criticism from  people who think  that  Islamic banks  are notdifferent from conventional banks, only  the title  that  sharia. The study was conducted  with descriptive methods,  compare  theory  derived  from the study ofliterature  with the practice  in the field. The study found  there are many  Islamic banking  practices  in the implementation of  mudharabah,  particularly in terms ofcapital ownership  status  and responsibility  to bear  the risk  violate  what  isoutlined in the  Shariah. In  terms of  gift-giving  at the beginning, it was found  thatthe gift  made  Islamic banks  with  a specific purpose,  grant  can not be  justified  inShari’a.

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