This study is one of very few studies which explained problem of misunderstanding the impact of Islamic Banks controller types on income statement data disclosure. Searcher found the possibility separating controller rules between international, local, managers, employees and Islamic supervisory board which will give different accounting data in income statement to cause unfairly evaluation. Misunderstand comes as result to different controlling factors types, different expect ways to face return default and cost, and different ways to face increasing tax which obligates to understand this impact before evaluate Islamic bank income statement results.
{"title":"Impact of Islamic Banks Controller Types on Income Statement","authors":"Abdullah Ibrahim Nazal","doi":"10.15640/JIBF.V5N2A7","DOIUrl":"https://doi.org/10.15640/JIBF.V5N2A7","url":null,"abstract":"This study is one of very few studies which explained problem of misunderstanding the impact of Islamic Banks controller types on income statement data disclosure. Searcher found the possibility separating controller rules between international, local, managers, employees and Islamic supervisory board which will give different accounting data in income statement to cause unfairly evaluation. Misunderstand comes as result to different controlling factors types, different expect ways to face return default and cost, and different ways to face increasing tax which obligates to understand this impact before evaluate Islamic bank income statement results.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67167635","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Credit card, which is one of the noncash payment methods, has been growing exponentially. Credit card generally uses credit balances advanced by the banks to make payments. The banks charge cardholders for using the credit payment system or based on the outstanding balances owed. Charging fees based on the outstanding balances can tantamount to Riba Nasi’ah. To avoid thisRiba, the Islamic banks have packaged their cards based on certain Islamic ‘transaction principles’. These packages include Charge cards, Qard Al-hasan cards, Bay Al-Inah cards, Tawarruq cards, and Murabahah cards.Some of these packages have become subjects of increasing juristic criticism. I review these packages and conclude that they suffer either from reduced Shari’ah compliance or high price.I propose an alternative package that could minimize the juristic criticisms and improve competitiveness. It extends the Tawarruq package by introducing a buy-and-hold element in the ownership of the underlying asset. It eliminates the need for revolving money credit that can attract interest charges and replaces it with cash reserve and asset holding that the cardholder replenishes as he/she makes repayments into his/her card.
{"title":"Islamic Credit Cards: How Do They Work, And Is There A Better Alternative?","authors":"B. Sillah","doi":"10.15640/JIBF.V5N2A1","DOIUrl":"https://doi.org/10.15640/JIBF.V5N2A1","url":null,"abstract":"Credit card, which is one of the noncash payment methods, has been growing exponentially. Credit card generally uses credit balances advanced by the banks to make payments. The banks charge cardholders for using the credit payment system or based on the outstanding balances owed. Charging fees based on the outstanding balances can tantamount to Riba Nasi’ah. To avoid thisRiba, the Islamic banks have packaged their cards based on certain Islamic ‘transaction principles’. These packages include Charge cards, Qard Al-hasan cards, Bay Al-Inah cards, Tawarruq cards, and Murabahah cards.Some of these packages have become subjects of increasing juristic criticism. I review these packages and conclude that they suffer either from reduced Shari’ah compliance or high price.I propose an alternative package that could minimize the juristic criticisms and improve competitiveness. It extends the Tawarruq package by introducing a buy-and-hold element in the ownership of the underlying asset. It eliminates the need for revolving money credit that can attract interest charges and replaces it with cash reserve and asset holding that the cardholder replenishes as he/she makes repayments into his/her card.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166891","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rina Ani Sapariyah, Achmad Choerudin, Yanti Setyorini, Yenni Khristiana
This research aimed to determine the influence of Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Return on Asset (ROA), Return On Equity (ROE), Loan on Deposit Ratio (LDR) between conventional and syariah banks in Indonesia. This study is quantitative research. The population in this study is Indonesian banking opened syariah unit those are 12 Syariah Bank (BUS). The sampling technique used was purposive sampling criteria; with result were 6 convensional and 6 syariah banks. Data analysis methods used in the study were multiple linier regression analysis, difference test paired sample T-Test and difference test Wilcoxon. The study showed Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Return On Asset (ROA), Return On Equity (ROE), Loan on Deposit Ratio (LDR) between conventional banks with syariah banks have significant contradiction.
{"title":"Financial Performance of Conventional and Syariah Banks: An Empirical Studies in Indonesia","authors":"Rina Ani Sapariyah, Achmad Choerudin, Yanti Setyorini, Yenni Khristiana","doi":"10.15640/JIBF.V5N2A2","DOIUrl":"https://doi.org/10.15640/JIBF.V5N2A2","url":null,"abstract":"This research aimed to determine the influence of Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Return on Asset (ROA), Return On Equity (ROE), Loan on Deposit Ratio (LDR) between conventional and syariah banks in Indonesia. This study is quantitative research. The population in this study is Indonesian banking opened syariah unit those are 12 Syariah Bank (BUS). The sampling technique used was purposive sampling criteria; with result were 6 convensional and 6 syariah banks. Data analysis methods used in the study were multiple linier regression analysis, difference test paired sample T-Test and difference test Wilcoxon. The study showed Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Return On Asset (ROA), Return On Equity (ROE), Loan on Deposit Ratio (LDR) between conventional banks with syariah banks have significant contradiction.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166900","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper provides an insight for assessing risk management frameworks for implementation by the Islamic banks. Considering the dynamic nature of ever-increasing internal and external forces from which diverse banking risks are emanating, it becomes imperative to continue updating the risk management mechanisms. This is absolutely necessary in order to ensure full compliance with the relevant Sharī`ah principles, strengthen depositors’ protection, engender consumer confidence, minimize the impact of failure, improve quality of services, reduce costs of operation, provide greater competitive advantage, create new markets for investments, and attract more customers. Although the risk management mechanisms cannot be generalized because Islamic financial institutions are not the same in their operational activities, sizes, personnel and sophistication, but the frameworks outlined in this paper can provide useful clues for effective and comprehensive risk management and mitigation. Keyword: Islamic Bank, Risk Mitigation, Supervision, Shari’ah-compliance, contract.
{"title":"Frontiers and Mechanics of Risk Management in Islamic Banking System - Policy Measures for Effective Risk Mitigation","authors":"Abubakar Yusuf Sanyinna, Hydzulkifli Hashim Omar","doi":"10.15640/JIBF.V5N1A4","DOIUrl":"https://doi.org/10.15640/JIBF.V5N1A4","url":null,"abstract":"The paper provides an insight for assessing risk management frameworks for implementation by the Islamic banks. Considering the dynamic nature of ever-increasing internal and external forces from which diverse banking risks are emanating, it becomes imperative to continue updating the risk management mechanisms. This is absolutely necessary in order to ensure full compliance with the relevant Sharī`ah principles, strengthen depositors’ protection, engender consumer confidence, minimize the impact of failure, improve quality of services, reduce costs of operation, provide greater competitive advantage, create new markets for investments, and attract more customers. Although the risk management mechanisms cannot be generalized because Islamic financial institutions are not the same in their operational activities, sizes, personnel and sophistication, but the frameworks outlined in this paper can provide useful clues for effective and comprehensive risk management and mitigation. Keyword: Islamic Bank, Risk Mitigation, Supervision, Shari’ah-compliance, contract.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166847","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kenya is a Muslim minority country in which Islamic banking and finance has assumed great importance in recent years. From a humble beginning in the form of Islamic windows with limited products and services, the concept has gradually enlarged to encompass full-fledged Islamic banks. This paper describes the historical development and overview of the Islamic Financial Institutions in Kenya. It also highlights the key areas that have contributed to the growth of the Islamic financial services sector namely, Shariah governance, niche market strategy and promising regulatory environment.
{"title":"Expanding the Islamic Financial Services Frontier: Lessons from Islamic Finance Sector in Kenya","authors":"I. M. Salim","doi":"10.15640/JIBF.V5N1A1","DOIUrl":"https://doi.org/10.15640/JIBF.V5N1A1","url":null,"abstract":"Kenya is a Muslim minority country in which Islamic banking and finance has assumed great importance in recent years. From a humble beginning in the form of Islamic windows with limited products and services, the concept has gradually enlarged to encompass full-fledged Islamic banks. This paper describes the historical development and overview of the Islamic Financial Institutions in Kenya. It also highlights the key areas that have contributed to the growth of the Islamic financial services sector namely, Shariah governance, niche market strategy and promising regulatory environment.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166775","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose: The aim of this research is to empirically investigate the relationship between levels of awareness, perceptions and purchase intentions towards Islamic insurance (Takaful) products amongst Australian Muslim consumers. We delineate between general and life insurance products and seek to examine possible relationships between three components of the consumer attitude as expounded by Rosenberg and Hovland (1960) in their tripartite attitudinal model and levels of religiosity. Design/methodology: We utilize responses gained from a convenience sample of 150 Australian Muslim consumers located across metropolitan Sydney. The study was administered online via Facebook invitations. Findings: Perception plays no significant role in mediating the relationship between religiosity and purchase intentions. There was found to be a significant positive relationship awareness and perceptions of both Islamic general and life insurance and a significant negative relationship between religiosity and purchase intentions towards Islamic general insurance. Low to moderate levels of awareness were reported across general and life insurance. Limitations: The convenience sample was drawn from a homogenous sample located within the same city. This may have affected the results and impacted generalisability of results. Implications & value: The study highlights the importance of raising awareness of such products amongst Australian Muslim’s and is a pioneering study within the context of a secular non-Muslim country.
{"title":"Australian Muslim Consumers and Takaful Products: an Empirical Study Investigating Awareness, Perceptions and Purchase Intentions","authors":"Muhammad K. Abdulsater","doi":"10.15640/jibf.v5n2a3","DOIUrl":"https://doi.org/10.15640/jibf.v5n2a3","url":null,"abstract":"Purpose: The aim of this research is to empirically investigate the relationship between levels of awareness, perceptions and purchase intentions towards Islamic insurance (Takaful) products amongst Australian Muslim consumers. We delineate between general and life insurance products and seek to examine possible relationships between three components of the consumer attitude as expounded by Rosenberg and Hovland (1960) in their tripartite attitudinal model and levels of religiosity. Design/methodology: We utilize responses gained from a convenience sample of 150 Australian Muslim consumers located across metropolitan Sydney. The study was administered online via Facebook invitations. Findings: Perception plays no significant role in mediating the relationship between religiosity and purchase intentions. There was found to be a significant positive relationship awareness and perceptions of both Islamic general and life insurance and a significant negative relationship between religiosity and purchase intentions towards Islamic general insurance. Low to moderate levels of awareness were reported across general and life insurance. Limitations: The convenience sample was drawn from a homogenous sample located within the same city. This may have affected the results and impacted generalisability of results. Implications & value: The study highlights the importance of raising awareness of such products amongst Australian Muslim’s and is a pioneering study within the context of a secular non-Muslim country.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166940","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Research aims to examine the implications of globalization for the nature of domestic inflation in Indonesia and to measure how far the influence to the Islamic monetary policyand how Islamic Monetary Policy deal with it. Specifically, whether the role played by each channel in the monetary policy transmission weakened or strengthened is investigated. To achieve these objectives a dynamic factor model with stochastic volatility (DFM-SV)model of the Indonesian monetary economy is constructed. However, before these objectives are addressed the issue of whether the monetary policy shocks have plausible macroeconomic effects is dealt with. To that end, a nonrecursive identifying strategy is applied.Time series econometric methods such as cointegration test, Granger causality test and generalized impulse response functions are applied in examining the dynamic relationship of the variables. Keyword: globalization, inflation, volatility, Islamic monetary policy
{"title":"The Impacts of Globalization on Inflation andTransmission of Islamic Monetary Policy: Case Study in Indonesia","authors":"Yoghi Citra Pratama","doi":"10.15640/JIBF.V5N2A4","DOIUrl":"https://doi.org/10.15640/JIBF.V5N2A4","url":null,"abstract":"This Research aims to examine the implications of globalization for the nature of domestic inflation in Indonesia and to measure how far the influence to the Islamic monetary policyand how Islamic Monetary Policy deal with it. Specifically, whether the role played by each channel in the monetary policy transmission weakened or strengthened is investigated. To achieve these objectives a dynamic factor model with stochastic volatility (DFM-SV)model of the Indonesian monetary economy is constructed. However, before these objectives are addressed the issue of whether the monetary policy shocks have plausible macroeconomic effects is dealt with. To that end, a nonrecursive identifying strategy is applied.Time series econometric methods such as cointegration test, Granger causality test and generalized impulse response functions are applied in examining the dynamic relationship of the variables. Keyword: globalization, inflation, volatility, Islamic monetary policy","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Tawarruq as one of the most commonly used financing products by Islamic banks has been faced with a lot of criticism. One of these criticisms is that it is used to circumvent interest. This paper assesses these criticisms in the light of current practices in Malaysia. Our methodology is qualitative and specifically involves explanatory design. Our findings reveal that the current practice of Tawarruq in Malaysia is faced with a lot Shari’ah compliance issues.
{"title":"Issues with the Use of Tawarruq in Malaysia","authors":"Habeebah Simisola Fa-Yusuf, Ndeye Djiba Ndiaye","doi":"10.15640/JIBF.V5N2A5","DOIUrl":"https://doi.org/10.15640/JIBF.V5N2A5","url":null,"abstract":"Tawarruq as one of the most commonly used financing products by Islamic banks has been faced with a lot of criticism. One of these criticisms is that it is used to circumvent interest. This paper assesses these criticisms in the light of current practices in Malaysia. Our methodology is qualitative and specifically involves explanatory design. Our findings reveal that the current practice of Tawarruq in Malaysia is faced with a lot Shari’ah compliance issues.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67167036","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Akeem Kolawole Odeduntan, A. A. Adewale, S. Hamisu
The present paper seeks to analyze the financial stability of Islamic banks in Malaysia. Using the time frame of 2008 to 2012, the paper adopts Z-score analysis, Liquidity ratio, Nonperforming financing as well as Credit risk ratio to assess financial stability of Islamic banks. The relevant data were collected from the annual reports of sixteen Islamic banks in Malaysia as obtainable in the bank-scope data base. The finding of the paper reveals that the Z-score is relatively high and thus suggests that Islamic banks at the moment are on the whole financially stable. The paper however finds that Islamic banks at present grant excessive financing while the total assets they invest on financing are on the increase. This therefore portrays an impending financial crisis for Islamic banks if their current financing mechanism is not revisited. The implication of this paper is that Islamic banks have the potentials of absorbing shock and are not likely to experience financial mess in the immediate term provided their liquidity ratios and loan to deposit ratios are regularly kept under check.
{"title":"Financial Stability of Islamic Banks: Empirical Evidence","authors":"Akeem Kolawole Odeduntan, A. A. Adewale, S. Hamisu","doi":"10.15640/JIBF.V4N1A5","DOIUrl":"https://doi.org/10.15640/JIBF.V4N1A5","url":null,"abstract":"The present paper seeks to analyze the financial stability of Islamic banks in Malaysia. Using the time frame of 2008 to 2012, the paper adopts Z-score analysis, Liquidity ratio, Nonperforming financing as well as Credit risk ratio to assess financial stability of Islamic banks. The relevant data were collected from the annual reports of sixteen Islamic banks in Malaysia as obtainable in the bank-scope data base. The finding of the paper reveals that the Z-score is relatively high and thus suggests that Islamic banks at the moment are on the whole financially stable. The paper however finds that Islamic banks at present grant excessive financing while the total assets they invest on financing are on the increase. This therefore portrays an impending financial crisis for Islamic banks if their current financing mechanism is not revisited. The implication of this paper is that Islamic banks have the potentials of absorbing shock and are not likely to experience financial mess in the immediate term provided their liquidity ratios and loan to deposit ratios are regularly kept under check.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In our paper we will address two major empirical components, using a sample of fifty six banks, divided into four groups belonging to eight countries for a period of ten years (2003-2012) divided into three phases before, during, and after the subprime crisis. First, we would compare the efficiency of Islamic and conventional banks by using data envelopment analysis (DEA). Then we will use the parametric approach (Tobit model) to determine the impact of determinants of financial stability on banking solidity. To sum up, the stability of Islamic banks, especially investment essentially amounts to their asset quality that have a positive and remarkable effect during the crisis, but the weakness of their counterpart returns to the negative leverage and liquidity.
{"title":"Islamic Finance, Financial Crisis, and Determinants of Financial Stability: Empirical Evidence throughout the Two Approaches","authors":"Amine Nafla, Amine Hammas","doi":"10.15640/JIBF.V4N1A6","DOIUrl":"https://doi.org/10.15640/JIBF.V4N1A6","url":null,"abstract":"In our paper we will address two major empirical components, using a sample of fifty six banks, divided into four groups belonging to eight countries for a period of ten years (2003-2012) divided into three phases before, during, and after the subprime crisis. First, we would compare the efficiency of Islamic and conventional banks by using data envelopment analysis (DEA). Then we will use the parametric approach (Tobit model) to determine the impact of determinants of financial stability on banking solidity. To sum up, the stability of Islamic banks, especially investment essentially amounts to their asset quality that have a positive and remarkable effect during the crisis, but the weakness of their counterpart returns to the negative leverage and liquidity.","PeriodicalId":31275,"journal":{"name":"Journal of Islamic Banking and Finance","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67166654","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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