The goal of bank performance evaluation is to guarantee that they efficiently utilize resources. Financial performance analysis is a critical tool for recognizing the bank's weaknesses and strengths across its numerous activities. The CAMELS technique is regarded as a supervisory tool to evaluate bank performance based on several aspects, according to the literature review. Regulators use on-site and off-site monitoring tools to assess a bank's financial stability. The CAMELS rating system encourages transparency, evolution, and change in all financial institutions. Furthermore, this method identifies the structural strengths and weaknesses of financial organizations. This study conducts a comparative analysis of Islamic and conventional banks in Qatar using the CAMELS rating scale from 2015 to 2020. We used a sample of 14 banks in Qatar, four of which were Islamic while the others were conventional. The findings indicate that Islamic banks showcase superior performance in Qatar while outperforming their conventional counterparts in many variables. However, none of the banks in Qatar could obtain a rating of 1, indicating areas of weaknesses that need to be worked on, particularly in the area of liquidity, which was a critical factor for all banks. According to this study, the Qatar Central Bank should improve the monitoring and screening of all Islamic banks in Qatar. Furthermore, it is suggested that the Qatar central bank employs the CAMELS system to track operations and field offices for banks functioning to facilitate regular access to a stable banking sector. Banks can use CAMELS to track their performance, and the necessary actions must be undertaken.
{"title":"Financial Performance of Islamic and Conventional Banks in Qatar: A Comparative Analysis","authors":"Naseem Shah Shirazi","doi":"10.58932/muld0010","DOIUrl":"https://doi.org/10.58932/muld0010","url":null,"abstract":"The goal of bank performance evaluation is to guarantee that they efficiently utilize resources. Financial performance analysis is a critical tool for recognizing the bank's weaknesses and strengths across its numerous activities. The CAMELS technique is regarded as a supervisory tool to evaluate bank performance based on several aspects, according to the literature review. Regulators use on-site and off-site monitoring tools to assess a bank's financial stability. The CAMELS rating system encourages transparency, evolution, and change in all financial institutions. Furthermore, this method identifies the structural strengths and weaknesses of financial organizations. This study conducts a comparative analysis of Islamic and conventional banks in Qatar using the CAMELS rating scale from 2015 to 2020. We used a sample of 14 banks in Qatar, four of which were Islamic while the others were conventional. The findings indicate that Islamic banks showcase superior performance in Qatar while outperforming their conventional counterparts in many variables. However, none of the banks in Qatar could obtain a rating of 1, indicating areas of weaknesses that need to be worked on, particularly in the area of liquidity, which was a critical factor for all banks. According to this study, the Qatar Central Bank should improve the monitoring and screening of all Islamic banks in Qatar. Furthermore, it is suggested that the Qatar central bank employs the CAMELS system to track operations and field offices for banks functioning to facilitate regular access to a stable banking sector. Banks can use CAMELS to track their performance, and the necessary actions must be undertaken.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121362260","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 study aims to examine the influence of market cost of funds, credit risk, profitability, and size on the funding strategy and liquidity risk in Islamic banking. The analysis utilizes quarterly aggregated time series data on Islamic banking from September 2006 to June 2022. All variables are found to be integrated into order one, indicating they are I(1). The study employs the Vector Error Correction Model (VECM) to investigate the short-run and long-run relationships. The findings indicate that size and credit risk are positively associated with liquidity risk. Furthermore, credit risk demonstrates a long-term co-movement with liquidity risk. Additionally, the results reveal a negative association between profitability and funding strategy, suggesting that higher profitability is associated with a more conservative funding approach. Lastly, the cost of funds exhibits a negative association with funding strategy, implying that lower market cost of funds is linked to a more aggressive funding strategy.
{"title":"Factors Affecting Liquidity Risk in Islamic Banking in Pakistan","authors":"Salman Ahmed Shaikh","doi":"10.58932/muld0009","DOIUrl":"https://doi.org/10.58932/muld0009","url":null,"abstract":"This study aims to examine the influence of market cost of funds, credit risk, profitability, and size on the funding strategy and liquidity risk in Islamic banking. The analysis utilizes quarterly aggregated time series data on Islamic banking from September 2006 to June 2022. All variables are found to be integrated into order one, indicating they are I(1). The study employs the Vector Error Correction Model (VECM) to investigate the short-run and long-run relationships. The findings indicate that size and credit risk are positively associated with liquidity risk. Furthermore, credit risk demonstrates a long-term co-movement with liquidity risk. Additionally, the results reveal a negative association between profitability and funding strategy, suggesting that higher profitability is associated with a more conservative funding approach. Lastly, the cost of funds exhibits a negative association with funding strategy, implying that lower market cost of funds is linked to a more aggressive funding strategy.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115452684","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 Islamic capital market has emerged as a critical player in Islamic social finance, providing a Shariah-compliant alternative to traditional capital markets for Muslim customers. With a plethora of research in the field of Islamic finance, there is a growing body of empirical views regarding new enhancements in the Islamic capital market. Thus, it is imperative to understand the emergence of research in this area to conduct further studies on various aspects. In this study, data was extracted using the Scopus database, with "Islamic Capital Market" as the reference in "Article title, Abstract, and keywords," specifying the duration from 2000 to 2022. Various software tools such as VOS viewer, R studio, Biblioshiny, and Excel were employed to apply bibliometric methods for a comprehensive analysis of past research on Islamic Capital Market through different visualization methods. The findings reveal a clear research gap in the existing literature on Islamic Capital Market. While available research covers historical background and general discussions, significant areas, such as technology's use for innovation in the Islamic capital market, are not widely discussed. It is also noted that until 2011, there was no significant increase in research in this field. However, since then, numerous empirical and theoretical studies have been conducted, and it is expected that this growth will continue in the coming years. This study contributes to the understanding of the current state of research in the Islamic capital market and provides a basis for future research in this area.
{"title":"Islamic Capital Market Research: A Bibliometric Visualization based on Scopus Database (2000-2022)","authors":"M. Tahir, Umer Farooq, Hafiz Ahmad Iftikhar","doi":"10.58932/muld0012","DOIUrl":"https://doi.org/10.58932/muld0012","url":null,"abstract":"The Islamic capital market has emerged as a critical player in Islamic social finance, providing a Shariah-compliant alternative to traditional capital markets for Muslim customers. With a plethora of research in the field of Islamic finance, there is a growing body of empirical views regarding new enhancements in the Islamic capital market. Thus, it is imperative to understand the emergence of research in this area to conduct further studies on various aspects. In this study, data was extracted using the Scopus database, with \"Islamic Capital Market\" as the reference in \"Article title, Abstract, and keywords,\" specifying the duration from 2000 to 2022. Various software tools such as VOS viewer, R studio, Biblioshiny, and Excel were employed to apply bibliometric methods for a comprehensive analysis of past research on Islamic Capital Market through different visualization methods. The findings reveal a clear research gap in the existing literature on Islamic Capital Market. While available research covers historical background and general discussions, significant areas, such as technology's use for innovation in the Islamic capital market, are not widely discussed. It is also noted that until 2011, there was no significant increase in research in this field. However, since then, numerous empirical and theoretical studies have been conducted, and it is expected that this growth will continue in the coming years. This study contributes to the understanding of the current state of research in the Islamic capital market and provides a basis for future research in this area. ","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"160 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123536018","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 present study aims to highlight the issues related to the growth of Islamic Banking. Because of various modes of Islamic banking, the banking system is growing not only in Muslim countries but also in non-muslim countries. Likewise, Islamic banking is also growing in Pakistan in terms of its market capitalization as well as its banking accounts. However, despite the dominance of Muslims in the Islamic Republic of Pakistan, the growth of Islamic banking is not up to expectations. The present study aims to highlight the issues that create hurdles in the growth of Islamic banking. Based on the survey from the users and non-users of banking, the study postulates the reasons for the slow growth of Islamic banking. This study analyzes the customers’ perception and awareness level towards the IBI. It further investigates the relationship between different demographic variables and the perception and awareness of customers. A sample of 267 respondents from different regions of Muzaffarabad was selected. For the analysis, descriptive statistics & Logistic regression was adopted to check the relationship between demographic variables and perception and awareness. The respondents expressed their perception of some of the services and expressed dissatisfaction with few. Customers indicate that they are aware of different products but do not adopt these products.
{"title":"Islamic Banking: Role of Customer’s Perception and Awareness to make it competitive with Conventional Banking","authors":"Esmat Kazmi, M. Jamil","doi":"10.58932/muld0013","DOIUrl":"https://doi.org/10.58932/muld0013","url":null,"abstract":"The present study aims to highlight the issues related to the growth of Islamic Banking. Because of various modes of Islamic banking, the banking system is growing not only in Muslim countries but also in non-muslim countries. Likewise, Islamic banking is also growing in Pakistan in terms of its market capitalization as well as its banking accounts. However, despite the dominance of Muslims in the Islamic Republic of Pakistan, the growth of Islamic banking is not up to expectations. The present study aims to highlight the issues that create hurdles in the growth of Islamic banking. Based on the survey from the users and non-users of banking, the study postulates the reasons for the slow growth of Islamic banking. This study analyzes the customers’ perception and awareness level towards the IBI. It further investigates the relationship between different demographic variables and the perception and awareness of customers. A sample of 267 respondents from different regions of Muzaffarabad was selected. For the analysis, descriptive statistics & Logistic regression was adopted to check the relationship between demographic variables and perception and awareness. The respondents expressed their perception of some of the services and expressed dissatisfaction with few. Customers indicate that they are aware of different products but do not adopt these products.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124234244","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 research conducted is qualitative research, in which the researchers examine various sources pertaining to the whistle-blowing system in Islamic banking. The focus of this research is PT. Bank Syariah Indonesia (BSI), one of the largest Islamic banks in Indonesia that aims to become one of the top ten Islamic banks worldwide within the next five years. The purpose of this study is to gain understanding and insight into how the whistle-blowing system at BSI effectively controls fraud and crime within the Indonesian banking sector. According to a survey conducted by The Association of Certified Fraud Examiners (ACFE), banking fraud in Indonesia is reported to be at a staggering 41% when compared to other sectors. This finding highlights the importance of this research for the government, stakeholders, and banking industry participants. In addition to utilizing qualitative methods, this research incorporates an analysis of the BSI website and draws support from various sources related to the whistle-blowing system in Islamic banking. It is hoped that future research will continue to examine the implications of whistle-blowing systems in preventing fraud within the banking sector, particularly within Islamic banking, not only in Indonesia but also globally.
{"title":"Implementation of Whistle-blowing System to Prevent Sharia Banking Crime in Indonesia","authors":"Zulfikar Hasan","doi":"10.58932/muld0005","DOIUrl":"https://doi.org/10.58932/muld0005","url":null,"abstract":"The research conducted is qualitative research, in which the researchers examine various sources pertaining to the whistle-blowing system in Islamic banking. The focus of this research is PT. Bank Syariah Indonesia (BSI), one of the largest Islamic banks in Indonesia that aims to become one of the top ten Islamic banks worldwide within the next five years. The purpose of this study is to gain understanding and insight into how the whistle-blowing system at BSI effectively controls fraud and crime within the Indonesian banking sector. According to a survey conducted by The Association of Certified Fraud Examiners (ACFE), banking fraud in Indonesia is reported to be at a staggering 41% when compared to other sectors. This finding highlights the importance of this research for the government, stakeholders, and banking industry participants. In addition to utilizing qualitative methods, this research incorporates an analysis of the BSI website and draws support from various sources related to the whistle-blowing system in Islamic banking. It is hoped that future research will continue to examine the implications of whistle-blowing systems in preventing fraud within the banking sector, particularly within Islamic banking, not only in Indonesia but also globally.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"3102 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127469662","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 main objective of this study is to address the growth of the banking system in Bahrain and analyze the impact of Covid-19 on its financial performance due to the global pandemic effect. The sample has been taken from the banking sectors of Bahrain, which include three clusters: Islamic banking, conventional banking, and entire banks. Data were collected from the Central Bank of Bahrain (CBB), with quarterly data extracted from 2019-2020. This paper measures the impact of pre- and post-Covid-19 financial performance of Bahraini banks to determine the factors affecting the financial indicators that influence the banking sectors of Bahraini banks. The outcomes of the t-statistic failed to reject the null hypothesis, indicating no significant difference between the pre- and post-financial performance of the complete banking sectors of Bahrain. Furthermore, the study diagnoses the factors analysis, including capital adequacy, asset quality, profitability, and liquidity of the banking system of Bahrain. Islamic banking maintained a strong financial position in the pre- and post-Covid-19 periods, along with capital adequacy, asset quality, and profitability. It was observed that pre-Covid-19 conventional banks performed below par in terms of capital adequacy, asset quality, and liquidity, but post-Covid-19, the profitability ratio improved. The entire banking sector, before Covid-19, worked under pressure to generate profit, but after the coronavirus crisis, it recorded profits due to timely actions taken by the Government of Bahrain to reduce the adverse impact of Covid-19. This is a time of survival and growth for the banking industry during uncertainty, aiming to facilitate knowledge-driven insights for financial success.
{"title":"Do Financial Indicators Affect the Performance of the Banking Ecosystem of Bahrain? A Study of Covid-19 Unprecedented","authors":"Muhammad Irfan","doi":"10.58932/muld0004","DOIUrl":"https://doi.org/10.58932/muld0004","url":null,"abstract":"The main objective of this study is to address the growth of the banking system in Bahrain and analyze the impact of Covid-19 on its financial performance due to the global pandemic effect. The sample has been taken from the banking sectors of Bahrain, which include three clusters: Islamic banking, conventional banking, and entire banks. Data were collected from the Central Bank of Bahrain (CBB), with quarterly data extracted from 2019-2020. This paper measures the impact of pre- and post-Covid-19 financial performance of Bahraini banks to determine the factors affecting the financial indicators that influence the banking sectors of Bahraini banks. The outcomes of the t-statistic failed to reject the null hypothesis, indicating no significant difference between the pre- and post-financial performance of the complete banking sectors of Bahrain. Furthermore, the study diagnoses the factors analysis, including capital adequacy, asset quality, profitability, and liquidity of the banking system of Bahrain. Islamic banking maintained a strong financial position in the pre- and post-Covid-19 periods, along with capital adequacy, asset quality, and profitability. It was observed that pre-Covid-19 conventional banks performed below par in terms of capital adequacy, asset quality, and liquidity, but post-Covid-19, the profitability ratio improved. The entire banking sector, before Covid-19, worked under pressure to generate profit, but after the coronavirus crisis, it recorded profits due to timely actions taken by the Government of Bahrain to reduce the adverse impact of Covid-19. This is a time of survival and growth for the banking industry during uncertainty, aiming to facilitate knowledge-driven insights for financial success.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"64 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127382944","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 study was conducted to examine the role of financial inclusion in economic growth, poverty, and income inequality in developing countries from 2010 to 2020. A panel data consisting of 101 countries for the period 2010 to 2020 was compiled from the World Development Indicators and the Global Financial Inclusion Database (Global Findex Database). The collected data was analyzed using the System Generalized Method of Moments. The study's findings indicate that financial inclusion has a positive impact on improving economic growth and reducing income inequality in developing countries. However, contrary to existing literature, this study found that financial inclusion has a direct relationship with poverty, which can be attributed to the economic peculiarities of developing countries. Therefore, this study concludes that financial inclusion contributes to improved economic growth and reduced income inequality. Although it may not directly alleviate absolute poverty, it helps reduce poverty through the mechanisms of income inequality and economic growth. It is recommended that policymakers and regulators in respective countries focus on expanding the scope of financial inclusion to enhance economic growth and reduce income inequality.
{"title":"The Role of Financial Inclusion in Income Inequality, Poverty Reduction & Economic Growth in Developing Countries","authors":"Shakeel Shahzad","doi":"10.58932/muld0006","DOIUrl":"https://doi.org/10.58932/muld0006","url":null,"abstract":"This study was conducted to examine the role of financial inclusion in economic growth, poverty, and income inequality in developing countries from 2010 to 2020. A panel data consisting of 101 countries for the period 2010 to 2020 was compiled from the World Development Indicators and the Global Financial Inclusion Database (Global Findex Database). The collected data was analyzed using the System Generalized Method of Moments. The study's findings indicate that financial inclusion has a positive impact on improving economic growth and reducing income inequality in developing countries. However, contrary to existing literature, this study found that financial inclusion has a direct relationship with poverty, which can be attributed to the economic peculiarities of developing countries. Therefore, this study concludes that financial inclusion contributes to improved economic growth and reduced income inequality. Although it may not directly alleviate absolute poverty, it helps reduce poverty through the mechanisms of income inequality and economic growth. It is recommended that policymakers and regulators in respective countries focus on expanding the scope of financial inclusion to enhance economic growth and reduce income inequality.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"186 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123041631","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}
Recently, the COVID-19 pandemic and economic crisis have imposed constraints on government spending and increased borrowing to redevelop the economy. Thus, there is a need for alternative funding sources to ease the government's financial burden. Cash waqf has the potential to finance public health sector expenditures. Additionally, giving behavior plays a significant role in establishing cash waqf funds and ensuring the sustainability of waqf institutions. This paper examines the views of the public, specifically Muslims in the Klang Valley, Malaysia, regarding cash waqf and their willingness to contribute to it as an alternative financing method for public healthcare expenditures. The research framework combines variables from the Theory of Planned Behavior (TPB) and additional variables such as attitude, perceived behavioral control, religiosity, and trust in waqf institutions. The study finds that Muslims in the Klang Valley are aware of and willing to contribute to cash waqf for public health expenditure, especially during the COVID-19 pandemic. The study further reveals that attitude and perceived behavioral control are significant factors influencing their intention to contribute. These findings can encourage relevant authorities to consider cash waqf as an alternative financing source for public health expenditures, benefiting both Muslims and non-Muslims.
{"title":"Cash Waqf for Public Health Expenditure","authors":"N. M. Nor, Norhanim Mat Sarib","doi":"10.58932/muld0003","DOIUrl":"https://doi.org/10.58932/muld0003","url":null,"abstract":"Recently, the COVID-19 pandemic and economic crisis have imposed constraints on government spending and increased borrowing to redevelop the economy. Thus, there is a need for alternative funding sources to ease the government's financial burden. Cash waqf has the potential to finance public health sector expenditures. Additionally, giving behavior plays a significant role in establishing cash waqf funds and ensuring the sustainability of waqf institutions. This paper examines the views of the public, specifically Muslims in the Klang Valley, Malaysia, regarding cash waqf and their willingness to contribute to it as an alternative financing method for public healthcare expenditures. The research framework combines variables from the Theory of Planned Behavior (TPB) and additional variables such as attitude, perceived behavioral control, religiosity, and trust in waqf institutions. The study finds that Muslims in the Klang Valley are aware of and willing to contribute to cash waqf for public health expenditure, especially during the COVID-19 pandemic. The study further reveals that attitude and perceived behavioral control are significant factors influencing their intention to contribute. These findings can encourage relevant authorities to consider cash waqf as an alternative financing source for public health expenditures, benefiting both Muslims and non-Muslims.","PeriodicalId":336327,"journal":{"name":"International Journal of Islamic Economics and Governance","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129812514","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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