Assessing the effect of organisational commitment on turnover intentions amongst Islamic bank employees

PurposeThe research aims to test the links amongst Meyer and Allen's three levels of organisational commitment and the commitment's effect on reducing turnover intentions for Islamic bank (IB) employees during the lockdown caused by coronavirus disease (COVID-19).Design/methodology/approachThe research follows a variable-centred approach. Primary data are collected through a survey of 324 respondents comprising IB employees from three Arab countries, notably the United Arab Emirates (UAE), Lebanon and Oman. Exploratory factor analysis (EFA) and Cronbach's alpha test are conducted to test the construct validity, reliability and internal consistency of collected data. Descriptive statistics are used to interpret the data. Zero-order correlations, multiple regression analysis and Fisher's Z-test are applied to assess the interrelations of the various groups of variables and the determinants of turnover intentions.FindingsResults show that there is a high level of significant intercorrelation amongst affective, normative and continuance commitments as well as amongst organisational commitment, individual differences and turnover intentions for IB employees from the three studied Arab countries. The results confirmed that turnover intentions are minimised in the presence of all three organisational commitment subscales and that individual differences amongst IB employees and organisational efficiency moderate the relationship between organisational commitment and turnover intentions.Originality/valueThere is no empirical work that has been done on the determinants of turnover intentions amongst IB employees during the lockdown. This is valuable to organisational behaviour scholars and practitioners who are interested in the role that organisational commitment plays in IB's employment behaviour.

Proposing an organizational framework for the Sharīʿah Secretariat of Islamic banks in Bangladesh

PurposeSharīʿah Secretariat plays a significant role in assisting Sharīʿah Supervisory Boards (SSBs) in their role in achieving Sharīʿah compliance in Islamic banks (IBs). The key objective of the study is to develop a demographic framework of the Sharīʿah Secretariat for the IBs in Bangladesh.Design/methodology/approachThe study applied qualitative case study research. The data have been collected from 17 respondents through semi-structured interviews from IBs and professional experts in Bangladesh.FindingsThis study proposes a full-time Sharīʿah Secretariat and several departments for further enhancement of the Sharīʿah functions in IBs in Bangladesh. The framework proposed in this study covers the formation, functions, composition, qualification, reporting line, independence, remuneration and terms of appointment of the Sharīʿah Secretariat to set a uniform benchmark for all IBs in Bangladesh. It is anticipated that the outcomes of this research will assist to further strengthen the Sharīʿah governance of IBs in Bangladesh.Research limitations/implicationsThis research contributed to the national and global regulatory authorities and IBs by proposing a Sharīʿah Secretariat framework for the smooth functioning of the IBs in Bangladesh. The framework proposed in this study covers the formation, functions, composition, qualification, reporting line, independence, remuneration and terms of appointment of Sharīʿah Secretariat.Originality/valueThis study proposed a framework which is considered the first organizational framework so far for the Sharīʿah Secretariat of IBs in Bangladesh. IBs can apply this proposed framework to form their Sharīʿah Secretariat structure.

Performance comparison between Islamic and conventional stocks: evidence from Pakistan's equity market

PurposeThis paper aims to examine the performance of Islamic and conventional stocks listed at the Pakistan Stock Exchange by using both parametric and non-parametric approaches. The motivation is to do risk-return analysis of Islamic stock prices and conventional stock prices.Design/methodology/approachIt uses various measures of performance, e.g. Sharpe ratio, Treynor ratio, Jensen's alpha, beta, generalized auto-regressive conditional heteroskedasticity and stochastic dominance. Using the Karachi Meezan Index-30 (KMI-30) and the Karachi Stock Exchange Index-30 (KSE-30) as proxies for Islamic and conventional stock prices, respectively, it examines the performance of Islamic and conventional stocks. The daily data of KMI-30 and KSE-30, covering period from June 9, 2009 to June 20, 2020 are used.FindingsThe results show that the overall KMI-30 outperforms the KSE-30. The returns of the KMI-30 are greater than the KSE-30. However, the risk and volatility of the KMI-30 and KSE-30 are similar. Further, the KMI-30 has higher excess returns per unit of total risk than the KSE-30. But both indexes have similar excess returns per unit of systematic risk. Moreover, the KMI-30 returns have stochastically dominance over the KSE-30 returns. These results reveal that the Islamic index performs better than the conventional index.Practical implicationsThe findings provide several practical implications in financial and investment decisions making by investors, managers and policymakers such as strategies for asset allocation and investment. Further, in risk management, it provides guidance for allocating portfolios and managing risk. The investment in Islamic stocks may mitigate potential risk within asset portfolios.Originality/valueThis research is unique in its approach to the analysis of the performance comparison of conventional and Islamic stock by using comprehensive parametric and non-parametric estimation techniques. Such research has not been undertaken in the Pakistan's equity market since.

Objectives and measures of performance of Islamic microfinance banks in Indonesia: the stakeholders' perspectives

PurposeThis study investigates both internal and external stakeholders' views on the objectives and measures of performance of Indonesian Islamic microfinance banks (IMFBs).Design/methodology/approachThis study uses a qualitative approach. In-depth interviews were conducted with a wide range of internal and external stakeholders of IMFBs in Indonesia. The primary stakeholders interviewed comprised the board of directors of IMFBs located in several provinces in Indonesia, including rural and urban areas. The external stakeholders were the regulators/supervisors, represented by the Indonesian Financial Services Authority and Sharīʿah advisors of the National Sharīʿah Board as well as Muslim scholars. The data were analysed using CAQDAS, a computer-assisted tool for qualitative analysis.FindingsThe objectives of the IMFBs are seen to represent more than profits or economic well-being. Their objectives also comprise spirituality and daʿwah (Islamic propagation). Daʿwah is conducted through the provision of funding and services that are aligned with Sharīʿah (Islamic law), the dissemination of information about Islamic financing, which is based on Islamic values and principles, and the payment of zakat (Islamic alms) and charitable contributions. The measures of performance are considered to be more holistic than those of conventional banks. Profit and growth are deemed important as the means to achieve social well-being objectives.Research limitations/implicationsBetter insights into the objectives and measures of IMFBs could be achieved from interviews with other stakeholder categories, such as customers and the community. This could be the focus of future research.Originality/valueThis study added a new discussion to the limited empirical literature on IMFBs by investigating the views of stakeholders on the objectives and performance of IMFBs in Indonesia.

Sharīʿah governance and agency dynamics of Islamic banking operations in the Kingdom of Saudi Arabia

PurposeThis study aims to investigate and point out the variations of agency theory in the context of Sharīʿah governance in Islamic banking operations in the Kingdom of Saudi Arabia (KSA).Design/methodology/approachThe study followed the approach of quantitative Corporate Governance Index (CGI) by computing the Gov-index (Gompers et al., 2003) and the Gov-score (Brown and Caylor, 2004; Saffieddine, 2009) to examine corporate governance (CG) issues using primary as well as secondary data. The primary data was generated from three full-fledged Islamic banks (IBs) and nine traditional banks with Islamic banking wings, all operating in the KSA. The approach was to provide an insight into the agency structure in the context of Islamic banking, which may lead to a trade-off between the conformity of Sharīʿah (Islamic law) rules and processes followed in safeguarding the rights of investors.FindingsThe majority of the Islamic banking services that are surveyed in this study acknowledge the significance of Sharīʿah governance and have implemented the fundamental methods, in conformity with this system. Certain flaws in Sharīʿah governance principles pertaining to audit, control and transparency are reported.Practical implicationsThe research outcomes will be invaluable to IBs aiming to improve existing SG practices. It also has implications for IB managers to design strategies while complying with regulations and to protect the interests of all investors without breaching the ethics of Sharīʿah.Originality/valueThis paper adds original value to the body of knowledge on agency relationship by analysing the dynamics of agency theory in the unique and complex context of Sharīʿah governance of IBs or those offering Islamic products in the KSA. The results can be used as a valuable feedback for improvement of Sharīʿah governance in the banking system in the KSA and the Gulf region at large.

Factors necessary for effective corporate waqf management for Malaysian public healthcare

PurposeThis research paper aims to determine the factors needed to propose a platform where waqf (Islamic endowment) organizations can collaborate with government public hospitals to develop corporate waqf hospitals. Consequently, the elements of governance and sustainability are included in the management of corporate waqf hospitals thereby leading to the corporatization of public hospitals.Design/methodology/approachThis study adopts the qualitative research methodology and undertakes content analysis of data collected from journal articles, magazines and official websites. Data analysis involves open coding with NVivo 12.FindingsGeneral findings from the literature review have shown that architectural and engineering fundamentals were essential factors in the success of past waqf hospitals of the era between 8th and 14th centuries. In that era, the decentralized waqf-based hospitals employed the mutawalli (the trustee/manager of the waqf assets) to govern the administration of the hospitals. Present corporate waqf hospitals can exploit the elements identified from past waqf-based hospitals and additionally adopt the private-public partnership model in the form of a muḍārabah (profit-sharing contract) agreement to design a sustainable waqf governance model for Malaysian public healthcare services.Research limitations/implicationsThe proposed platform is designed for a corporate waqf model developed in collaboration between Malaysian waqf institutions and public healthcare services. It abides by both the Malaysian fatwa (Islamic rulings) on waqf and the laws of the Malaysian Government.Practical implicationsThere is potential for developing the Malaysian corporate waqf-governance healthcare model which will enable the hospital to provide better quality healthcare to more patients through upgrading the quality of equipment used in hospitals and/or better facilities at equal or lower costs. Consequently, this will not only improve waqf management and distribution but also result in reduction of government expenditure.Social implicationsThis research promotes the concept of a corporate waqf hospital which will provide innumerable beneficial healthcare services in terms of improved healthcare quality at affordable costs to the general public and at no cost to the poor and the underprivileged.Originality/valueAlthough waqf has played an important role as a vehicle for Islamic financing in the society for centuries, a model of collaboration or partnership of waqf with public healthcare services has yet to be explored and developed. With proper corporate governance and well-managed sustainability in a corporate waqf model, this newly developed partnership between waqf institutions and public healthcare providers can be a first step in many more interesting collaborative arrangements that can be established between waqf institutions and public services in the future.

Islamic finance and economic growth: the Turkish experiment

PurposeThis study aims to empirically investigate the connection between Islamic finance and economic growth in Turkey using the endogenous growth model.Design/methodology/approachIt applies quantile regression with the Markov chain marginal bootstrap resampling technique by adopting total Islamic financing as the main exogenous explanatory factor in the endogenous growth model, while the gross domestic product (GDP) is employed as a measure of economic growth. The sample consists of all full-fledged participation (Islamic) banks operating in Turkey spanning from 2013Q4 until 2019Q4. The study uses academic literature, official financial reports from the Participation Banks Association of Turkey, REDmoney Group, Islamic Financial Services Board (IFSB) and the International Monetary Fund (IMF) database.FindingsThe results show that Islamic finance is promoting economic growth in Turkey, which mirrors the success of the New Turkish Economy Program (2019–2021) which aims at boosting economic growth by enhancing the Islamic finance share in the Turkish banking sector and the global market.Research limitations/implicationsTurkey has a dual banking system (conventional and participation (Islamic)) and both can influence the country's real economy. This study is limited to the influence of Islamic banking on Turkish economic growth. The study also restricts its size and coverage from 2013Q4 to 2019Q4, to cover the years over which data for all variables included in the research are available.Practical implicationsThis paper suggests the adoption of the Turkish successful experiment as a path to reach economic growth by increasing the Islamic finance share in the banking industry for countries that seek to promote economic growth by Islamic finance, as the findings of this paper support.Originality/valueThis study is the first that examines the influence of Islamic finance on economic growth under a new theoretical framework of the endogenous growth model in Turkey using a robust non-parametric approach.

Cash waqf from the millennials' perspective: a case of Indonesia

PurposeThe purpose of this study is to explore the awareness and willingness level of millennials in Indonesia toward cash waqf (cash endowment). Cash waqf has gained huge attention in Indonesia because of its flexibility, especially after officially announcing that cash waqf practices are sharia-compliant in 2002 in the country. Millennials comprise 33.75% of the total Indonesian population. Therefore, it is vital to analyze cash waqf from an Indonesian perspective. This study provides vital information for all institutions that are concerned with the enhancement of the cash waqf contributions in Indonesia.Design/methodology/approachSelf-structured questionnaires were distributed in Java Island to collect the data. The data were examined by employing suitable statistical tools. Besides, post-interview fact-finding was conducted with cash waqf experts from different related institutions in Indonesia to reach a more in-depth understanding about cash waqf issues.FindingsThe results depict a high level of awareness about cash waqf among millennials in Indonesia. The results further reveal a lower willingness level to contribute to cash waqf of the sample population as compared to their level of awareness about cash waqf. Moreover, cash waqf promotions must focus on delivering a deeper understanding about the concept and how it differs from other types of Islamic philanthropy. The results suggest that waqf trustees in the country must be more transparent. Moreover, the Indonesian Waqf Board should implement stricter rules to monitor waqf trustees.Research limitations/implicationsThis research concerns the willingness and awareness toward cash waqf among Indonesian Muslims who were born between 1980 and 2000.Practical implicationsAs a Muslim-majority country, one would expect Indonesia to make much progress in cash waqf. By providing an explanatory understanding of willingness and awareness of cash waqf among Indonesians, this research can be helpful in designing proper educative marketing campaigns for future endowers to cash waqf activities to ensure cash waqf institutions provide efficient services. It is advisable to emphasize the transparency of waqf organizations. This will add to the nazhir's (waqf trustee) reputation, thereby boosting waqf's national shares by ensuring a proper allocation of cash waqf. The regulator should be more strict in monitoring nazhir’s practices. For instance, it could include a periodic assessment of waqf entities.Originality/valueThis study is original in nature; there is no previous study that addresses the millennial’s perspective toward cash waqf in Indonesia. Hence, this study presents precious information for policy makers, practitioners and researchers.