The role of Sharia governance in minimizing credit risk in Islamic banking: a systematic literature review

IF 2.5 Q2 BUSINESS, FINANCE Journal of Islamic Accounting and Business Research Pub Date : 2024-04-17 DOI:10.1108/jiabr-11-2022-0301

Annisa Adha Minaryanti, Tettet Fitrijanti, Citra Sukmadilaga, Muhammad Iman Sastra Mihajat

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Abstract

Purpose

The purpose of this paper is to engage in a systematic examination of previous scholarship on the relationship between Sharia governance (SG), which is represented by the Sharia Supervisory Board (SSB), and the Internal Sharia Review (ISR), to determine whether the ISR can minimize financing risk in Islamic banking.

Design/methodology/approach

The literature search consisted of two steps: a randomized and systematic literature review. The methodology adopted in this article is a systematic literature review.

Findings

To reduce the risk of financing in Islamic banking, SG must be implemented optimally by making rules regarding the role of the SSB in supervising customer financing. In addition, it is a necessary to establish an entity that assists the SSB in the implementation of SG, namely, the ISR section, but there is still very little research on the role of the SSB and ISR in minimizing financing risk.

Practical implications

Establishing an ISR to assist the SSB in carrying out its duties has direct practical implications for Islamic banking: minimizing financing risks and compliance with Islamic Sharia principles. In addition, new rules regarding the role of SSBs and the ISR in reducing credit risk include monitoring customers to ensure that they fulfill their financing commitments on time. This new form of regulation and review can be used as a reference by the Otoritas Jasa Keuangan or Finance Service Authority to create new policies or regulations regarding SG, especially in Indonesia.

Originality/value

Subsequent research may introduce other more relevant variables, such as empirically testing the competence, independence or integrity of SSB and the ISR team as it attempts to minimize the risk of financing in Islamic banks. In addition, further research is expected to examine whether the SSB or the ISR team has a positive or negative influence on the risk of financing Islamic banks with secondary data.

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伊斯兰教法治理在最大限度降低伊斯兰银行业信贷风险方面的作用：系统文献综述

本文的目的是对以前关于伊斯兰教法治理（SG）（以伊斯兰教法监督委员会（SSB）为代表）与内部伊斯兰教法审查（ISR）之间关系的学术研究进行系统研究，以确定内部伊斯兰教法审查是否能最大限度地降低伊斯兰银行业的融资风险。本文采用的方法是系统性文献综述。研究结果要降低伊斯兰银行业的融资风险，就必须通过制定有关伊斯兰国家银行在监督客户融资方面的作用的规则来优化实施 SG。此外，有必要建立一个实体来协助 SSB 执行 SG，即 ISR 部门，但有关 SSB 和 ISR 在最大限度降低融资风险方面的作用的研究仍然很少。此外，有关 SSB 和 ISR 在降低信贷风险方面的作用的新规定包括监督客户，确保他们按时履行融资承诺。这种新的监管和审查形式可以供Otoritas Jasa Keuangan或金融服务管理局参考，以制定有关SG的新政策或法规，尤其是在印度尼西亚。原创性/价值后续研究可能会引入其他更相关的变量，如通过实证检验SSB和ISR团队的能力、独立性或完整性，因为他们试图将伊斯兰银行的融资风险降至最低。此外，预计进一步的研究将利用二手数据检验 SSB 或 ISR 团队对伊斯兰银行融资风险的影响是积极的还是消极的。

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来源期刊

Journal of Islamic Accounting and Business Research BUSINESS, FINANCE-

CiteScore

4.80

自引率

22.70%

发文量

期刊介绍： The journal provides a dynamic forum for the advancement of accounting and business knowledge based on Shari’ah and Islamic activities that have an impact on the welfare of society. JIABR publishes articles on the interplay between Islamic business ethics, accounting, auditing and governance, in promoting accountability, socio-economic justice (adl) and everlasting success (al-falah). It seeks to inform, among others, current theoretical and empirical research and practice in Islamic accounting, auditing and corporate governance, management of Islamic organizations, accounting regulation and policy for Islamic institutions, Shari’ah auditing and corporate governance, financial and non-financial performance measurement and disclosure in Islamic institutions and organizations. All styles of research, theoretical and empirical, case studies, practice-based papers and research notes that are well written and falling within the journal''s scope, are generally welcomed by the journal. Scope/Coverage Development of accounting, auditing and corporate governance concepts based on Shari’ah Socio-political influence on accounting and auditing regulation and policy making for Islamic financial institutions and organizations Historical perspectives on Islamic accounting, auditing and financial management Critical analysis on issues and challenges on accounting disclosure and measurement, Shari’ah audit and corporate governance Controls and risks in Islamic organizations Financial and non-financial performance measurement and disclosure.