Article : Ethical Legitimacy of Islamic Banks and Shariah Governance: Evidence from Bangladesh

Journal : Journal of Public Affairs

Author(s) : Mosab I Tabash, Md Kausar Alam, Md Mizanur Rahman

Affiliation : College of Business Administration, Al Ain University, Al Ain, United Arab Emirates
Author Email : kausarflorence@gmail.com
Publisher : John Wiley and Sons, Ltd
Volume : 22
Issue : 2
Year : 2022
EISSN : 1479-1854
DOI : 10.1002/pa.2487

Abstract : The research paper's fundamental objective is to examine the ethical legitimacy of the
Islamic banks through the two crucial internal mechanisms of Shariah Governance (SG), that is, Shariah
Supervisory Board (SSB) and Shariah officers. A semi-structured questionnaire has been applied to
collect data for attaining the research objectives. However, 17 respondents have been interviewed who
have practical experiences concerning Islamic banks and SG. The study explores inappropriate SG
practices, reporting, disclosure, and fatwas resolutions, which generate confusion among the customers
and damage Islamic banks' institutional image. Islamic banks do not follow the proper SG guidelines and
Shariah principles. These findings denote a negative legitimization of Islamic banks and SG practices. The
study considerably contributes to the enhancements of the responsibilities of the national and global
regulatory bodies by providing internal Shariah authorities authorization from their ethical perspective.
This research has numerous unique practical implications for the Islamic banks and the central bank of
Bangladesh, which will help them to apply Shariah principles, improve the SG practices, and enhance
Shariah compliance quality. This research extends the literature concerning SG and the legitimacy,
legitimacy theory, and institutional theory of the Islamic banks concerning Bangladesh. This is the first
research that explores the ethical legitimacy of Islamic banks.

Article : Impact of Bank Regulation on Risk of Islamic and Conventional Banks

Journal : International Journal of Finance and Economics

Author(s) : Hafiz Hoque, Heng Liu

Affiliation : The York Management School, Department of Accounting and Finance, York, UK
Author Email : hafiz.hoque@york.ac.uk
Publisher : John Wiley and Sons, Ltd
Volume : 28
Issue : 1
Year : 2023
Start Page : 1025
End Page : 1062
Keywords : Bank Regulation, Financial Crisis, Insolvency Risk, Islamic Banking, Systemic Risk
EISSN : 1099-1158
DOI : 10.1002/ijfe.2462
Abstract : We analyse the impact of bank regulation on the risks of Islamic banks (IBs) and
conventional banks (CBs) between 2004 and 2015 by employing 455 CBs and 95 IBs from 22 countries
where IBs and CBs coexist. Since the objective of Basel regulations is to achieve a stable banking sector
by mitigating risks, we examine the impact of bank regulations on various risks of IBs and CBs by using a
regression framework. We examine solvency risk, credit risk, idiosyncratic risk and systemic risk by using
capital oversight, restriction on activities, private monitoring and supervisory power bank regulation data
provided by the World Bank. The findings show that though the Basel regulations were originally
developed for CBs, our results imply that they are effective for IBs as well as CBs. However, our study also
shows that regulations affect IBs and CBs differently as their business models are different. More
targeted regulations towards IBs would be necessary to support IBs. Additionally, in regions with higher
economic freedom indexes, banking regulations can mitigate the risk of IBs and CBs to a greater extent.
Our results imply that the combination of free economic policies and banking supervision addresses risks
in banking effectively. Finally, the bank regulations did not appear to be able to control the risk of the
sample banks during the 2007–2009 crisis. Hence, the Basel committee needs to rethink about
regulations during crisis times.

Article : The Islamic Rate of Return Versus the Nominal Rate of Interest: A Macroeconometric Model

Journal : Eastern Economic Journal

Author(s) : Ibrahim L Awad

Affiliation : Department of Finance and Economics, College of Business and Economics, Qatar
University, Doha, Qatar
Author Email : ibrahim.ibrahim@qu.edu.qa"> <meta name="citat
Publisher : Palgrave Macmillan Ltd
Volume : 47
Issue : 2
Year : 2021
Start Page : 253
End Page : 272
Keywords : Macroeconometric Model, Monetary Policy, Islamic Banks
EISSN : 1939-4632
DOI : 10.1057/s41302-020-00170-8

Abstract : This paper investigates the question of “will the replacement of the nominal interest rate
by the expected Islamic real rate of return have positive consequences on the macroeconomic
performance?” The study adopts a dynamic small-scale macroeconometric model, which describes the
transmission mechanisms among macroeconomic variables under three scenarios about the Islamic real
rate of return. The baseline model and the model scenarios are solved using the stochastic simulation.
The results of the study indicate that scenario 1 of a zero Islamic real rate of return, or equivalently a
zero real interest rate, is superior over other model scenarios, given the priority of the goal of price
stability among other objectives of monetary policy.
Article : Banks’ Gifts in Islamic Financial Institutions

Journal : Intellectual Discourse

Author(s) : Abdulrahman Abdullah Alssadi

Publisher : International Islamic University Malaysia
Volume : 29
Issue : 1
Year : 2021

Abstract : This paper is a discussion about prizes in Islamic financial institutions, highlighting the
different advantages and disadvantages of current account. The paper consists of prizes offered by
Islamic banks to clients, which can be divided according to their type into: a) the rewards and material
benefits, b) Intangible rewards and benefits. The paper discusses ruling on prizes and gifts for current
accounts. The ruling on the bank offering prizes and gifts to current account holders. The ruling on
offering prizes and benefits that are not required and do not take into account the amounts deposited in
the current account. The ruling on offering rewards and benefits to the bank’s clients without being
specific to current account holders. To fulfil the objective of this paper, qualitative approach is used. The
paper is organized into the following issues with three sections. First section is related to the discussion
on truth about prize giving by Islamic banks, which consist on rulings on prizes and gifts in current
accounts and jurisprudential conceptualisation for the current account. The second section is rulings on
prize giving in current accounts and rulings regarding prices and gifts. The third section is research on
rulings regarding prize giving in investment accounts. Downloads Download data is not yet available.

Article : A Case Study of Safa Baitul Maal-An Islamic Micro Finance Institution in Hyderabad India

Journal : Journal of Management and Strategy

Author(s) : Atif Aziz, B D Pandey

Publisher : Sciedu Press
Volume : 11
Issue : 4
Year : 2020
EISSN : 1923-3973
DOI : 10.5430/jms.v11n4p41

Abstract : Islamic Microfinance refers to interest free microfinance in which no interest is charged
from the poorest members of the society who are (areas in which poor people are living) marked
negative by commercial banks i.e. the people are not given any loans. The main aim of any Islamic
microfinance institution is to help the financially backward people to set up their small businesses
without adding any further financial burden on them. The other objective of Islamic Microfinance is
poverty alleviation and brings the poorest of the poor in the main stream. Unlike commercial banks and
conventional microfinance, the objective of Islamic Microfinance is not to make profit but to earn reward
from Allah (the Creator of Universe) both in this world and Hereafter. Islamic Microfinance or Interest
free microfinance is most important tool to protect poor and poorer from the clutches of Sahukars
(money vendors) who give meagre amount of Rs 800-1000 to small vendors in the morning and ask for
principal and interest in the evening. In this paper, the authors have taken up the study of Safa Baitul
Maal (SBM) interest free microfinance based in Hyderabad India. The selected institution has also been
evaluated on various aspects such as its modus operandi, current status, outreach. The institution is
fairly new which started its microfinance activities in 2014 in Kishan bagh Hyderabad Telangana India.
The findings are very impressive, the shariah compliance is strictly followed. The loan amount
distribution which was Rs 0.1 million in 2014 has now increased to 1 million in 2019. Initially only 20
persons were given interest free loan now this number is increased to 1500 persons in 2019 and 1800 in
2020.

Article : The Impact of Islamic Banking Corporate Governance on Green Banking

Journal : Administrative Sciences

Author(s) : Jabbar Sehen Issa, Mohammad Abbaszadeh, Mahdi Salehi

Affiliation : Department of Economics and Administrative Sciences, Ferdowsi University of Mashhad,
Mashhad 9177948974, Iran
Author Email : abbas33@um.ac.ir
Publisher : Multidisciplinary Digital Publishing Institute
Volume : 12
Issue : 4
Year : 2022
Keywords : Corporate Governance, Islamic Banking, Green Banking
EISSN : 2076-3387
DOI : 10.3390/admsci12040190

Abstract : The primary purpose of the research is to investigate the impact of Islamic banking
corporate governance on green banking in Iraq. In other words, the current study seeks to find an
answer to whether corporate governance in Islamic banking can affect green banking in Iraq. For this
purpose, the research method is applied based on the objective and descriptive survey. The statistical
population of this research is all the managers, employees, and customers of the public and private
banks of Iraq, and a total of 70 questionnaires have been completed and analyzed. The sampling method
is non-random, and the available population was selected as the sample size. In this research, PLS tests
have been used to investigate the effect of independent variables on the dependent variable. The results
indicate that corporate governance in Islamic banking has had a positive effect on green banking,
meaning that the increase of corporate governance mechanisms in Iraqi Islamic banking increase the
level of attention of Iraqi Islamic banks to green banking matters. The current research was conducted in
Iraq's developing or emerging financial markets, which are highly competitive and under insufficient
supervision.

Article : Islamicity Performance and Intellectual Capital in Performance Assessment Sharia Banking
Finance

Journal : Journal of Research in Business and Management

Author(s) : Safria Syarifuddin, Abdul Hamid Habbe, Amiruddin
Affiliation : Economics and Business, Hasanuddin University Makassar, Indonesia
Publisher : Quest Journals Inc
Volume : 9
Issue : 4
Year : 2021
Keywords : Profit Sharing Ratio, Zakat Performance Ratio, Equitable Distribution Ratio, Employed
Capital, Human Capital, Structural Capital, Financial Performance
EISSN : 2347-3002

Abstract : This study aims to examine and analyze the effect of the Islamicity performance index using
proxies for profit sharing ratio, zakat performance ratio, equitable distribution ratio, and intellectual
capital using proxies of capital employed, human capital, structural capital on Islamic banking financial
performance. This study uses a quantitative approach. The object studied was Islamic commercial banks
during the 2014- 2018 period. The sample in this study was 7 companies obtained using the purposive
sampling technique. Data obtained by non-participant observation and analyzed using multiple linear
regression analysis. The results showed that the profit-sharing ratio affects the financial performance of
Islamic banking. Zakat performance ratio affects the financial performance of Islamic banking. The
equitable distribution ratio affects the financial performance of banks. Capital employed does not affect
banking financial performance. Human capital and Structural capital affects banking financial
performance.

Article : Islamic Banking Products, Services and Objectives: Perspectives of Shariah Supervisors and
Regulators

Journal : International Review of Management and Business Research

Author(s) : Muhammad Aqib Ali, Talat Hussain

Affiliation : University of Management and Technology, Lahore.
Author Email : email_aqib@yahoo.com
Publisher : International Review of Management and Business Research
Volume : 10
Issue : 1
Year : 2021
Keywords : Islamic Banking, Islamic Finance, Pakistan, Products, Perceptions, Shariah Compliance
DOI : 10.30543/10-1(2021)-21

Abstract : The study is aimed at assessing the opinions of vital Islamic banking stakeholders including
members of various Islamic banking Shariah Supervisory Boards (SSBs) and pertinent personnel from
Pakistan’s central bank – The State Bank of Pakistan (SBP). The research analyzes the percepts of
respondents regarding various aspects relevant to Islamic banking (IB) products, service and objectives.
The paper employs qualitative research approach in analyzing the Shariah and regulatory experts’
viewpoints regarding Islamic banking. The study is conducted using semi-structured interviews of twelve
Shariah supervisors and nine SBP staff members serving in the Islamic banking department and Islamic
banking focus groups in the regional/field offices of the State Bank of Pakistan. The study is of pioneering
nature involving qualitative research design and inclusion of two of the most significant stakeholder
groups from the Islamic banking sector of Pakistan who have not been included in the past studies
regarding Islamic banking perceptions. The research findings highlighted that Shariah objectives are top
priority of Islamic banks as per the views expressed by members of Shariah boards of various banks
while in opinion of Islamic banking regulators, Islamic banks’ major concern is to achieve their business
objectives.

Article : Selected Characteristics of Islamic Banking in Context of Real Sphere Development

Journal : Global Journal of Business, Economics and Management

Author(s) : PaweÅ Mrowiec, Magdalena WÃjcik Jurkiewicz

Affiliation : School of Finance and Law in Bielsko-Biala, Bielsko-Biala, Poland
Publisher : Science Park Research, Organization and Counseling
Volume : 11
Issue : 1
Year : 2021
Start Page : 01
End Page : 09
Keywords : Shariâ&euro, &trade, ah Laws, Financial Crisis, Real Sphere Development, Bank
Profitability
DOI : 10.18844/gjbem.v11i1.4692

Abstract : The objective of this study is to analyse the selected characteristics of Islamic banking in
the context of real sphere development. It is hypothesised that Islamic economic principles could be
applied to some extent to Western banking. To this end, selected features of Islamic and Western
banking were analysed for their impact on the real sphere, including analysis of Islamic banks’ assets
in the years 2006–2015 and the transposition of these data to assets of ten top commercial banks in
the world. A literature review related to the functioning of Islamic banking, content analysis and
deduction method was used to achieve this purpose. The authors, as a result of the research carried out,
contradict the hypothesis indicating that it is impossible to directly compare Islamic banking to
conventional banking, as the scope of services provided, system assumptions and, above all, their
complexity, determines a different approach to their management and monitoring. As a result of
scientific research, the authors of the paper contributed to opening new research areas in the field of
Islamic banking.

Article : Issues and Challenges of Financial Management Practices in Islamic Financial Institutions:
Empirical Evidence from Bangladesh

Journal : Indian Journal of Finance and Banking

Author(s) : Serajul Islam, Abdullahil Mamun, Anwarul Islam K M, Mohammad Rahim Uddin, Tania
Sultana
Publisher : Centre for Research on Islamic Banking & Finance and Business
Volume : 5
Issue : 1
Year : 2021
Keywords : Islamic Finance, Shariah Compliance, Bangladesh
EISSN : 2574-609X
DOI : 10.46281/ijfb.v5i1.963

Abstract : Studies suggest several issues and challenges of financial management practices in Islamic
banks and insurance companies and Islamic non-bank financial institutions (INBFIs) in Bangladesh. The
purpose of the research is to examine the issues and challenges of Islamic Financial Management (IFM)
from an empirical perspective. The study relies on a structured questionnaire survey in prominent
Islamic financial institutions (IFIs) of Bangladesh for achieving its objective. After confirming data
reliability based on Cronbach's alpha, the study proceeds to analyse by applying descriptive statistics and
principal component factor analysis using correlation, Kaiser-Meyer-Olkin (KMO) and Bartlett's Test and
VARIMAX Rotation. The study finds that there is no separate regulatory framework to supervise and
monitor IFIs in Bangladesh rather the central bank regulates the Islamic financial system based on the
existing laws and regulations of the conventional financial system. The findings of this study suggest that
the government should establish a separate regulatory body for monitoring the IFI’s functions so that
they can perform their activities smoothly in the congenial environment in Bangladesh.

Article : Islamic Financing Portfolio and its Comparative Growth Potential

Journal : Islamic Banking and Finance Review

Author(s) : Noman Arshed, Sadia Yasmin, Muhammad Gulzar

Affiliation : School of Business and Economics, University of Management and Technology, Lahore,
Pakistan
Publisher : University of Management and Technology
Volume : 7
Year : 2020
EISSN : 2413-2977
DOI : 10.32350/ibfr/2020/0700/440

Abstract : Background – Growth has a strong association with financial sector development. As both
micro and macro projects significantly count institutionalized financing contented to the access of
finance and help to reduce the cost. Islamic finance development incorporates several benefits such as
the transformation of the economy towards the Shari’ah compliancy, higher degree of risk-sharing, and
integration of returns with the risk/performance associated with the investment venture thus ultimately
leading to social prosperity. Objectives - This study envisages the exploration of the contribution of
different type of Islamic banking financing which Islamic Banks are utilizing in their capital structure, on
the economic growth. This assessment may help in empirically identifying the financing which has been
fruitful to promote growth. This is because each of these Islamic financing products has their essence in
the path of growth. Design/methodology/approach - Gross Domestic Product (GDP) is taken as the
dependent variable. And the Solow model based controlling variables includes Labor Resource (L), and
Physical Capital (K) while the base variable are the financing modes. The quarterly data is collected for 9
countries which are available between 2014Q1 and 2017Q4. Findings – The results indicate that other
than Istisna financing, all other financings have a positive effect on economic growth, whereas Salam
financing has highest growth potency. Originality/value – Previous studies lack in providing a country-
level comparison of growth effect of country-level Islamic capital structure. While, considering financing
as an input of economic growth within a panel data setup. This study is finding growth based weights on
the popular Islamic financing options, which policymakers can use to find a particular financing which
needs promoting in order to boost economic growth.

Article : Islamic Banks between Reality and Challenges

Journal : Academy of Accounting and Financial Studies Journal

Author(s) : Mohammed Yousif Oudah Al-Muttar

Publisher : Allied Business Academies
Volume : 26
Issue : 2
Year : 2022
Keywords : Islamic Bank, Reality, Challenges
EISSN : 1528-2635

Abstract : A bank is a financial institution, with the stated objective of facilitating financial
transactions for clients, and keeping and operating funds. Banks originated and developed in Europe
over a period of 400 years, but when they moved to Islamic societies, they faced rejection from religious
Muslims because the nature of their work violates the rules of Islamic dealing in several respects, the
most important of which is dealing with usury (interest), in addition to many other detailed aspects. That
is why Islamic banks faced great difficulties and challenges in terms of support and marketing, and for
this reason Islamic banks were addressed in this study for the purpose of analyzing these problems and
challenges and developing effective solutions to them.

Article : The Internal Sharia Auditor in Islamic Banks

Journal : Journal of Management Information and Decision Sciences

Author(s) : Emad Ali Meeloud Abdullah, Shahir Akram Hassan

Affiliation : Centre for Islamic Development Management Studies (ISDEV), Universiti Sains Malaysia
Publisher : Allied Business Academies
Volume : 25
Issue : 2S
Year : 2022
Keywords : Shariah Auditor, Control And Guidance, Islamic Banks
EISSN : 1532-5806

Abstract : The internal Sharia auditor is an essential in Islamic banks because of the significance of the
role, as well as the impact he/she has on Islamic financial services and the ability to acquire services that
are in compliance with Islamic Sharia. In light of the fact that the only thing that differentiates Islamic
banking from traditional banking is its adherence to Islamic Sharia rules, it is obvious that every Islamic
financial organization has a Sharia auditor. The purpose of this research is to understand the role of
Sharia audit in Islamic banks, as well as to analyze and describe the roles and requirements of the
internal Sharia auditor in controlling and directing the operation of Islamic financial institutions. In order
to meet the study's aims, the following question was posed to participants: What is the role of the
internal Sharia auditor in controlling and directing the work of Islamic banks? This study found that
Sharia auditors have positively influenced Islamic financial products offered by Islamic banks, in terms of
ensuring the safety of these products for customers. This was made possible through the findings of this
study, which utilized a descriptive approach to accomplish the study's objectives. The researcher utilized
previous studies and research in libraries to complete this study. The study recommended concentrating
efforts on developing and improving Sharia audit management, as well as providing it with the attention
it deserves. Additionally, the report advised expanding the number of Sharia auditors at each Islamic
bank in order to perform more audits of financial transactions and thereby contribute to the control and
direction of Islamic banks' operations

Article : The Islamic Need for Investing Inherited Wealth and Accounting Treatments

Journal : Journal of Muamalat and Islamic Finance Research

Author(s) : Umar Habibu Umar, Md Harashid Haron

Publisher : Universiti Sains Islam Malaysia
Volume : 18
Issue : 1
Year : 2021
Keywords : Islamic Inheritance, Accounting, Inherited Wealth, Musharakah, Mudarabah
EISSN : 0126-5954
DOI : 10.33102/jmifr.v18i1.323

Abstract : Islamic inheritance involves the allocation of the wealth of a Muslim deceased among
his/her heirs after the settlement of legacies and debts. Irrespective of the amount given to each heir, if
not invested,one day it will be finished through consumption, which could sooner or later make them
live in poverty. Hence, this study intends to justify the Islamic need for investing inherited wealth.
Another objective is to provide accounting treatments for basic Islamic inheritance transactions and the
admission of heirs into an inherited business through the adaption of the provisions of AAOFI accounting
and Bank Negara Malaysia (BNM) Shariah standards for musharakah and mudarabah. The study
established that the investment of inherited wealth in either musharakah or mudarabahventures is in
line with the Shariah to enable heirs to generate income sustainably to afford their needs. The study also
showed the accounting treatments forbasic Islamic inheritance transactions in order to determine the
share of the equity and profit or loss of each heir from the business properly and correctly