Historical Review of IJIF This year we celebrate 15 years since the launch of ISRA International Journal of Islamic Finance (IJIF). IJIF started in 2009 under the ownership and management of the International Shari’ah Research Academy for Islamic Finance (ISRA) with the vision to promote further innovation in the Islamic finance industry and academia by providing a platform for publishing high quality research in the areas of Islamic banking, economics, finance, law and takāful. ISRA initially published two issues of the Journal per annum in hard copies. Three types of articles were considered: articles of academic rigour, articles by practitioners who have experience in applied Islamic finance, and the research works carried out by ISRA researchers under the heading ‘Research Notes’.
{"title":"Editorial","authors":"B. S. Sairally","doi":"10.55188/ijif.v15i1.481","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.481","url":null,"abstract":"Historical Review of IJIF \u0000This year we celebrate 15 years since the launch of ISRA International Journal of Islamic Finance (IJIF). IJIF started in 2009 under the ownership and management of the International Shari’ah Research Academy for Islamic Finance (ISRA) with the vision to promote further innovation in the Islamic finance industry and academia by providing a platform for publishing high quality research in the areas of Islamic banking, economics, finance, law and takāful. ISRA initially published two issues of the Journal per annum in hard copies. Three types of articles were considered: articles of academic rigour, articles by practitioners who have experience in applied Islamic finance, and the research works carried out by ISRA researchers under the heading ‘Research Notes’.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42888682","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 ‒ Considering the proclamations of trustworthiness within the Islamic financial system and the positive relationship between stock market reaction and earnings announcement of the trustworthy firm, this paper aims to empirically test the presence of trust in Sharīʿah-compliant listed firms in Pakistan. Design/Methodology/Approach ‒ The research question has been addressed by investigating firms listed on the Pakistan Stock Exchange (PSX) from 1 July 2019 to 30 June 2020. Event study method has been used by taking Abnormal Return Variance (ARV) and Abnormal Trading Volume (ATV) as proxies to measure the investors’ reaction following earnings announcements. Findings ‒ The results suggest that stock price variations around earnings announcements are negatively related to trustworthy firms compared to less-trusted firms (i.e., Sharīʿah non-compliant firms). For ATV, it was found that traders react to annual earnings announcements for both types of firms in a similar way. Originality/Value ‒ This research is an attempt to evaluate the Islamic financial system from its trustworthiness perspective. Sufficient literature has already documented that being trustworthy is obligatory for Sharīʿah-compliant firms. This study contributes to the literature by examining whether the market/investors trust such firms or not. Research Limitations/Implications ‒ This research is based on a single-country analysis with a research span of one year. Cross-country analysis with a broader time horizon may give further clarity. Practical Implications ‒ This paper has made a valuable contribution to the literature by providing the guideline on how investors’ reactions to Sharīʿah-compliant firms differ from their reactions to Sharīʿah non-compliant firms. It also indicates how religious elements may subdue other social factors such as trust. This paper has also explored the market reaction by assessing both the liquidity and volatility of the stock market in Pakistan.
{"title":"Who Gets Believed? Trust and Investor Reaction to Earnings Announcements in Sharīʿah-Compliant vs. Sharīʿah Non-Compliant Firms","authors":"Q. Ahmed, S. Sharif","doi":"10.55188/ijif.v15i1.482","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.482","url":null,"abstract":"Purpose ‒ Considering the proclamations of trustworthiness within the Islamic financial system and the positive relationship between stock market reaction and earnings announcement of the trustworthy firm, this paper aims to empirically test the presence of trust in Sharīʿah-compliant listed firms in Pakistan. \u0000Design/Methodology/Approach ‒ The research question has been addressed by investigating firms listed on the Pakistan Stock Exchange (PSX) from 1 July 2019 to 30 June 2020. Event study method has been used by taking Abnormal Return Variance (ARV) and Abnormal Trading Volume (ATV) as proxies to measure the investors’ reaction following earnings announcements. \u0000Findings ‒ The results suggest that stock price variations around earnings announcements are negatively related to trustworthy firms compared to less-trusted firms (i.e., Sharīʿah non-compliant firms). For ATV, it was found that traders react to annual earnings announcements for both types of firms in a similar way. \u0000Originality/Value ‒ This research is an attempt to evaluate the Islamic financial system from its trustworthiness perspective. Sufficient literature has already documented that being trustworthy is obligatory for Sharīʿah-compliant firms. This study contributes to the literature by examining whether the market/investors trust such firms or not. \u0000Research Limitations/Implications ‒ This research is based on a single-country analysis with a research span of one year. Cross-country analysis with a broader time horizon may give further clarity. \u0000Practical Implications ‒ This paper has made a valuable contribution to the literature by providing the guideline on how investors’ reactions to Sharīʿah-compliant firms differ from their reactions to Sharīʿah non-compliant firms. It also indicates how religious elements may subdue other social factors such as trust. This paper has also explored the market reaction by assessing both the liquidity and volatility of the stock market in Pakistan.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43921793","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}
Norazlina Abd. Wahab, Saeed Awadh Bin-Nashwan, Mohd Nazri Chik, Mohd Yahya Mohd Hussin
Purpose ― The aim of this study is to explore the initiative taken by Bank Islam Malaysia Berhad (BIMB) in upholding Islamic social finance (ISF) through the innovative BangKIT Microfinance product. Design/Methodology/Approach ― This paper adopts the qualitative approach to review and synthesise the relevant literature on microfinance and Islamic microfinance and, moreover, analyses the BangKIT Microfinance product offered by BIMB. Findings ― The paper identifies the ISF initiative undertaken by BIMB as one of the primary objectives of Islamic banks with the noble aim to contribute to the society. This study makes some recommendations for further improvement of the product to unlock the full potential of ISF. It also proposes such a unique ṣadaqah-based product to other Islamic financial institutions (IFIs) and Islamic microfinance institutions (IsMFIs) to promote the provision of credits to individuals and businesses that lack access to fundamental financial products and services. Originality/Value ― This paper sheds light on the use of loans and ṣadaqah-based products as a microfinance initiative offered by an Islamic bank. Although there are several microfinance institutions (MFIs) in Malaysia, this product is amongst the pioneer contributions to the role of Islamic banks in ISF.
{"title":"Islamic Social Finance Initiatives: An Insight into Bank Islam Malaysia Berhad’s Innovative BangKIT Microfinance Product","authors":"Norazlina Abd. Wahab, Saeed Awadh Bin-Nashwan, Mohd Nazri Chik, Mohd Yahya Mohd Hussin","doi":"10.55188/ijif.v15i1.483","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.483","url":null,"abstract":"Purpose ― The aim of this study is to explore the initiative taken by Bank Islam Malaysia Berhad (BIMB) in upholding Islamic social finance (ISF) through the innovative BangKIT Microfinance product. \u0000Design/Methodology/Approach ― This paper adopts the qualitative approach to review and synthesise the relevant literature on microfinance and Islamic microfinance and, moreover, analyses the BangKIT Microfinance product offered by BIMB. \u0000Findings ― The paper identifies the ISF initiative undertaken by BIMB as one of the primary objectives of Islamic banks with the noble aim to contribute to the society. This study makes some recommendations for further improvement of the product to unlock the full potential of ISF. It also proposes such a unique ṣadaqah-based product to other Islamic financial institutions (IFIs) and Islamic microfinance institutions (IsMFIs) to promote the provision of credits to individuals and businesses that lack access to fundamental financial products and services. \u0000Originality/Value ― This paper sheds light on the use of loans and ṣadaqah-based products as a microfinance initiative offered by an Islamic bank. Although there are several microfinance institutions (MFIs) in Malaysia, this product is amongst the pioneer contributions to the role of Islamic banks in ISF.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":"1 1","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41327626","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 — This study empirically assesses the extent to which the conventional deposit rate (CDR) affects the Islamic deposit rate (IDR) in Indonesia and Malaysia within the dual banking system. Design/Methodology/Approach — This study uses non-linear autoregressive distributed lag (NARDL) and panel cointegration. Monthly data are employed, but the time period for the two countries examined is different because of data availability. The study thus covers the period 2009:M1 to 2020:M12 for Indonesia and 2000:M1 to 2020:M12 for Malaysia. Findings — The findings confirm evidence of the long-run link between IDR and CDR, where the IDRs in Indonesia and Malaysia asymmetrically respond to changes in CDRs. In addition, Indonesia’s IDRs adjust faster in response to the decline in CDRs compared to increases in CDRs. However, Malaysia’s IDRs adapt faster in response to increases in CDRs than their decreases. The panel cointegration results reinforce the asymmetric findings. Originality/Value — To the best of our knowledge, this paper is the first study to examine the extent to which IDRs asymmetrically respond to CDRs in a dual baking system in Indonesia and Malaysia. Practical Implications — Islamic banks (IBs) follow CDRs in determining IDRs due to uncompetitive IDRs, implying that IBs suffer from displaced commercial risk. Therefore, IBs may adopt a policy to address liquidity issues through investment risk reserves (IRR) and profit equalization reserves (PER) to reduce the distinctive gap between IDRs and CDRs.
{"title":"The Dynamic Link Between Islamic and Conventional Deposit Rates in a Dual Banking System","authors":"Agus Widarjono, Md. Mahmudul Alam, Abdur Rafik","doi":"10.55188/ijif.v15i1.487","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.487","url":null,"abstract":"Purpose — This study empirically assesses the extent to which the conventional deposit rate (CDR) affects the Islamic deposit rate (IDR) in Indonesia and Malaysia within the dual banking system. \u0000Design/Methodology/Approach — This study uses non-linear autoregressive distributed lag (NARDL) and panel cointegration. Monthly data are employed, but the time period for the two countries examined is different because of data availability. The study thus covers the period 2009:M1 to 2020:M12 for Indonesia and 2000:M1 to 2020:M12 for Malaysia. \u0000Findings — The findings confirm evidence of the long-run link between IDR and CDR, where the IDRs in Indonesia and Malaysia asymmetrically respond to changes in CDRs. In addition, Indonesia’s IDRs adjust faster in response to the decline in CDRs compared to increases in CDRs. However, Malaysia’s IDRs adapt faster in response to increases in CDRs than their decreases. The panel cointegration results reinforce the asymmetric findings. \u0000Originality/Value — To the best of our knowledge, this paper is the first study to examine the extent to which IDRs asymmetrically respond to CDRs in a dual baking system in Indonesia and Malaysia. \u0000Practical Implications — Islamic banks (IBs) follow CDRs in determining IDRs due to uncompetitive IDRs, implying that IBs suffer from displaced commercial risk. Therefore, IBs may adopt a policy to address liquidity issues through investment risk reserves (IRR) and profit equalization reserves (PER) to reduce the distinctive gap between IDRs and CDRs.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46551841","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 ― This study evaluates the bookkeeping practices of Muslim traders that carry out their trading activities in Kano State, Nigeria, from an Islamic inheritance perspective. Design/Methodology/Approach ― The major source of data was the administration of questionnaires. Semi-structured interviews were also conducted to support the results. Findings ― The questionnaire results found traders maintaining incomplete and improper records of their assets and liabilities. They also kept very minimal records for waṣiyyah (Islamic will). The findings imply that their inheritable wealth would not be fairly distributed based on the provisions of Islamic inheritance law. This claim was supported by real-life cases obtained through interviews portraying the consequences of incomplete and improper bookkeeping records. Originality/Value ― This paper is a pioneer study that empirically links bookkeeping practices to Islamic inheritance. Research Limitations ― This study is limited to Kano State, which is one of the 36 states of Nigeria. Practical Implications ― Traders are required to maintain proper and complete records of their assets, liabilities and waṣiyyah with a view to ensuring that their wealth is fairly distributed among their claimants when they die. Social Implications ― Keeping proper and complete records by traders could maximise the share to be given to each of their heirs and would save them against exposure to poverty, particularly if the wealth is properly invested.
{"title":"Evaluating the Bookkeeping Practices of Muslim Traders in the Context of Islamic Inheritance","authors":"Umar Habibu Umar, M. Haron","doi":"10.55188/ijif.v15i1.485","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.485","url":null,"abstract":"Purpose ― This study evaluates the bookkeeping practices of Muslim traders that carry out their trading activities in Kano State, Nigeria, from an Islamic inheritance perspective. \u0000Design/Methodology/Approach ― The major source of data was the administration of questionnaires. Semi-structured interviews were also conducted to support the results. \u0000Findings ― The questionnaire results found traders maintaining incomplete and improper records of their assets and liabilities. They also kept very minimal records for waṣiyyah (Islamic will). The findings imply that their inheritable wealth would not be fairly distributed based on the provisions of Islamic inheritance law. This claim was supported by real-life cases obtained through interviews portraying the consequences of incomplete and improper bookkeeping records. \u0000Originality/Value ― This paper is a pioneer study that empirically links bookkeeping practices to Islamic inheritance. \u0000Research Limitations ― This study is limited to Kano State, which is one of the 36 states of Nigeria. \u0000Practical Implications ― Traders are required to maintain proper and complete records of their assets, liabilities and waṣiyyah with a view to ensuring that their wealth is fairly distributed among their claimants when they die. \u0000Social Implications ― Keeping proper and complete records by traders could maximise the share to be given to each of their heirs and would save them against exposure to poverty, particularly if the wealth is properly invested.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45472651","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 — This research explores the impact of COVID-19 on the financial return of Islamic banks (IBs) in nine countries located in the Middle East and North Africa (MENA) region. It also examines the determinants of IBs’ profitability during stable and uncertain periods, namely before and during the development of coronavirus. Design/Methodology/Approach — The financial data of this paper were collected from annual reports of IBs and the Orbis Bank Focus database over four years: 2018, 2019, 2020 and 2021. Descriptive statistics were used to examine the progress of IBs’ performance from 2018 to 2021. The t-test was employed in this research paper to compare the financial proxies of IBs, and the multiple regression model was used to assess the determinants of IBs’ performance before and during the development of coronavirus in MENA countries. Findings — The empirical findings show that IBs in MENA countries were dramatically influenced by the development of COVID-19. All financial proxies of IBs like financial return and liquidity experienced a sharp drop during the lockdown period. The empirical findings also indicate that the financial situation of IBs in 2021 became close to the pre-pandemic situation but was nonetheless below the banks’ performance prior to the pandemic period (2018-2019). Finally, the results show that the determinants of IBs’ return were not the same during stable and uncertain periods. During the COVID-19 period, credit risk, managerial efficiency and oil price were the significant determinants of IBs’ profitability. Before the development of COVID-19, besides the elements of credit risk, managerial efficiency and oil price, liquidity risk and bank size were also found to have an influence on IBs’ profitability. Originality/Value — The research offers new insights to top managers in IBs to increase the institutions’ financial return and mitigate the negative shock of crises by managing several factors such as credit risk and managerial efficiency.
{"title":"The Impact of COVID-19 on the Performance of Islamic Banks in the MENA Region","authors":"Hani El-Chaarani","doi":"10.55188/ijif.v15i1.488","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.488","url":null,"abstract":"Purpose — This research explores the impact of COVID-19 on the financial return of Islamic banks (IBs) in nine countries located in the Middle East and North Africa (MENA) region. It also examines the determinants of IBs’ profitability during stable and uncertain periods, namely before and during the development of coronavirus. \u0000Design/Methodology/Approach — The financial data of this paper were collected from annual reports of IBs and the Orbis Bank Focus database over four years: 2018, 2019, 2020 and 2021. Descriptive statistics were used to examine the progress of IBs’ performance from 2018 to 2021. The t-test was employed in this research paper to compare the financial proxies of IBs, and the multiple regression model was used to assess the determinants of IBs’ performance before and during the development of coronavirus in MENA countries. \u0000Findings — The empirical findings show that IBs in MENA countries were dramatically influenced by the development of COVID-19. All financial proxies of IBs like financial return and liquidity experienced a sharp drop during the lockdown period. The empirical findings also indicate that the financial situation of IBs in 2021 became close to the pre-pandemic situation but was nonetheless below the banks’ performance prior to the pandemic period (2018-2019). Finally, the results show that the determinants of IBs’ return were not the same during stable and uncertain periods. During the COVID-19 period, credit risk, managerial efficiency and oil price were the significant determinants of IBs’ profitability. Before the development of COVID-19, besides the elements of credit risk, managerial efficiency and oil price, liquidity risk and bank size were also found to have an influence on IBs’ profitability. \u0000Originality/Value — The research offers new insights to top managers in IBs to increase the institutions’ financial return and mitigate the negative shock of crises by managing several factors such as credit risk and managerial efficiency. ","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44673783","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}
Marhanum Che Mohd Salleh, N. Abdullah, M. Chowdhury, Nor Azizan Che Embi, Salina Kassim
Purpose ― The main objective of this research is to examine the viability of the proposed Islamic health protection retirement plan (i-HPRP) among public and private employees in terms of their perceived benefits, future commitment, and preferences. Design/Methodology/Approach ― Quantitative research design is chosen to achieve the purpose of the research. A total of 498 Malaysians located in different states were surveyed, and partial least squares-structural equation modelling (PLS-SEM) analysis was conducted for data analysis. Findings ― Results of the analysis indicate that most of the respondents believed that the suggested plan is viable in terms of the benefits it provides and in line with their future commitment. In addition, both public and private employees have high interest in the proposed plan that appears to suit their retirement plans and health protection needs during that period. Originality/Value ― This study structured an original illustrative retirement health protection plan to test its viability among public and private employees. Research Implications/Limitations ― Results of this research are significant in proving that the suggested model of i-HPRP is attractive and would have positive acceptance among Malaysians once offered in the takāful (Islamic insurance) market. It would motivate takāful operators to develop this model as currently there are limited annuity takāful products offered in the market.
{"title":"Viability of Islamic Health Protection Retirement Plan (i-HPRP) Among Malaysian Public and Private Employees","authors":"Marhanum Che Mohd Salleh, N. Abdullah, M. Chowdhury, Nor Azizan Che Embi, Salina Kassim","doi":"10.55188/ijif.v15i1.486","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.486","url":null,"abstract":"Purpose ― The main objective of this research is to examine the viability of the proposed Islamic health protection retirement plan (i-HPRP) among public and private employees in terms of their perceived benefits, future commitment, and preferences. \u0000Design/Methodology/Approach ― Quantitative research design is chosen to achieve the purpose of the research. A total of 498 Malaysians located in different states were surveyed, and partial least squares-structural equation modelling (PLS-SEM) analysis was conducted for data analysis. \u0000Findings ― Results of the analysis indicate that most of the respondents believed that the suggested plan is viable in terms of the benefits it provides and in line with their future commitment. In addition, both public and private employees have high interest in the proposed plan that appears to suit their retirement plans and health protection needs during that period. \u0000Originality/Value ― This study structured an original illustrative retirement health protection plan to test its viability among public and private employees. \u0000Research Implications/Limitations ― Results of this research are significant in proving that the suggested model of i-HPRP is attractive and would have positive acceptance among Malaysians once offered in the takāful (Islamic insurance) market. It would motivate takāful operators to develop this model as currently there are limited annuity takāful products offered in the market.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45873505","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 — This paper aims to determine the influence of the purpose for issuing ṣukūk (operations, financing, and investment/acquisition) on different types of debt covenants (balance sheet, income statement, and collateral-based covenants). It also examines the ability of the ṣukūk rating to mediate the relationship between loan purposes and debt covenants. Design/Methodology/Approach — The research data were 236 ṣukūk that were listed on the Indonesia Stock Exchange (IDX) until December 2020. They were collected through the IDX official website. Logistic regression and the Sobel test were used to test the direct and indirect influences among the variables studied. Findings — The results showed that loan purposes affected the types of debt covenants. Loans for operational purposes seemed to be in accordance with the debt covenant with restrictions on income statement (IS), balance sheet (BS) and collateral. Loans for investment/acquisition were more appropriate to both BS and collateral-based debt covenants, while loans for financing were better suited to BS-based debt covenants. This study also proves that the ṣukūk rating could mediate associations between loan purposes, especially for investment/acquisition, and the types of debt covenants. Practical Implication — This research is useful for ṣukūk investors to consider the investment by looking at the purposes, ratings and ṣukūk covenants. In addition, it is helpful for ṣukūk holders, represented by trustees, in determining debt covenants in the form of ṣukūk with different purposes. Research Implication — The results of this study described how accounting information improved contract efficiency. This research provided important evidence of the association between the structure of debt covenants and loan purposes. It provided empirical evidence of the debt covenant hypothesis in agency theory on the importance of designing debt contracts to reduce monitoring costs. Originality/Value — This study employed the debt covenant on ṣukūk in Indonesia. The use of the ṣukūk rating as an intervening variable between loan purpose and debt covenant has not been studied previously. This study also divided debt covenant into four types by adding the collateral-based debt covenant because ṣukūk are different from other types of debt and require underlying assets in their issuance.
{"title":"The Right Purpose on the Right Covenant: Does the Loan Purpose Affect the Debt Covenant Through the Ṣukūk Rating?","authors":"Dwi Sulistiani, B. Tjahjadi","doi":"10.55188/ijif.v15i1.489","DOIUrl":"https://doi.org/10.55188/ijif.v15i1.489","url":null,"abstract":"Purpose — This paper aims to determine the influence of the purpose for issuing ṣukūk (operations, financing, and investment/acquisition) on different types of debt covenants (balance sheet, income statement, and collateral-based covenants). It also examines the ability of the ṣukūk rating to mediate the relationship between loan purposes and debt covenants. \u0000Design/Methodology/Approach — The research data were 236 ṣukūk that were listed on the Indonesia Stock Exchange (IDX) until December 2020. They were collected through the IDX official website. Logistic regression and the Sobel test were used to test the direct and indirect influences among the variables studied. \u0000Findings — The results showed that loan purposes affected the types of debt covenants. Loans for operational purposes seemed to be in accordance with the debt covenant with restrictions on income statement (IS), balance sheet (BS) and collateral. Loans for investment/acquisition were more appropriate to both BS and collateral-based debt covenants, while loans for financing were better suited to BS-based debt covenants. This study also proves that the ṣukūk rating could mediate associations between loan purposes, especially for investment/acquisition, and the types of debt covenants. \u0000Practical Implication — This research is useful for ṣukūk investors to consider the investment by looking at the purposes, ratings and ṣukūk covenants. In addition, it is helpful for ṣukūk holders, represented by trustees, in determining debt covenants in the form of ṣukūk with different purposes. \u0000Research Implication — The results of this study described how accounting information improved contract efficiency. This research provided important evidence of the association between the structure of debt covenants and loan purposes. It provided empirical evidence of the debt covenant hypothesis in agency theory on the importance of designing debt contracts to reduce monitoring costs. \u0000Originality/Value — This study employed the debt covenant on ṣukūk in Indonesia. The use of the ṣukūk rating as an intervening variable between loan purpose and debt covenant has not been studied previously. This study also divided debt covenant into four types by adding the collateral-based debt covenant because ṣukūk are different from other types of debt and require underlying assets in their issuance.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46991140","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}
Pub Date : 2022-12-08DOI: 10.1108/ijif-12-2022-261
B. S. Sairally
{"title":"Editorial","authors":"B. S. Sairally","doi":"10.1108/ijif-12-2022-261","DOIUrl":"https://doi.org/10.1108/ijif-12-2022-261","url":null,"abstract":"","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44624531","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}
Pub Date : 2022-11-07DOI: 10.1108/ijif-04-2021-0067
Nur Yusliana Yusoff, Rusni Hassan
PurposeThis paper aims to highlight provisions that may attract corporate criminal liability (CCL) in legislation and regulations enacted in Malaysia. Further, this paper identifies gaps or obstacles in the implementation of CCL in Islamic banks (IBs) in Malaysia.Design/methodology/approachThis research adopts the qualitative methodology. More specifically, it uses normative legal research by focusing on primary and secondary data obtained from legislation, regulations, decided case laws, guidelines, law textbooks and bank annual reports in relation to CCL provisions. It also conducts semi-structured interviews with different categories of experts, including legal practitioners (lawyers), regulators from Bank Negara Malaysia (BNM) and Securities Commission Malaysia, officers of the Attorney General's Chambers and officers from legal departments in IBs.FindingsThe results conclude that IBs should implement the law on CCL because they are considered corporations. It is also found that not all IBs complied with CCL provisions brought corporate offenders before the court.Research limitations/implicationsThis research is restricted by its specialisation in CCL in IBs in Malaysia.Practical implicationsThe CCL provision has to be implemented effectively by IBs to achieve the benefit. However, not all IBs implement CCL provision properly. The understanding created by the interview data illuminates the challenges in implementing CCL provisions. Thus, this paper seeks to change the approach in the implementation of CCL provisions by IBs in Malaysia.Originality/valueThe paper touches upon a new area, notably CCL in IBs, which is not well researched in past literature. Although there is a vast research on CCL, corporate crime in IBs in Malaysia is still an unexplored area. This study gives light on the implementation of CCL provisions in IBs.
{"title":"Corporate criminal liability in Islamic banks in Malaysia","authors":"Nur Yusliana Yusoff, Rusni Hassan","doi":"10.1108/ijif-04-2021-0067","DOIUrl":"https://doi.org/10.1108/ijif-04-2021-0067","url":null,"abstract":"PurposeThis paper aims to highlight provisions that may attract corporate criminal liability (CCL) in legislation and regulations enacted in Malaysia. Further, this paper identifies gaps or obstacles in the implementation of CCL in Islamic banks (IBs) in Malaysia.Design/methodology/approachThis research adopts the qualitative methodology. More specifically, it uses normative legal research by focusing on primary and secondary data obtained from legislation, regulations, decided case laws, guidelines, law textbooks and bank annual reports in relation to CCL provisions. It also conducts semi-structured interviews with different categories of experts, including legal practitioners (lawyers), regulators from Bank Negara Malaysia (BNM) and Securities Commission Malaysia, officers of the Attorney General's Chambers and officers from legal departments in IBs.FindingsThe results conclude that IBs should implement the law on CCL because they are considered corporations. It is also found that not all IBs complied with CCL provisions brought corporate offenders before the court.Research limitations/implicationsThis research is restricted by its specialisation in CCL in IBs in Malaysia.Practical implicationsThe CCL provision has to be implemented effectively by IBs to achieve the benefit. However, not all IBs implement CCL provision properly. The understanding created by the interview data illuminates the challenges in implementing CCL provisions. Thus, this paper seeks to change the approach in the implementation of CCL provisions by IBs in Malaysia.Originality/valueThe paper touches upon a new area, notably CCL in IBs, which is not well researched in past literature. Although there is a vast research on CCL, corporate crime in IBs in Malaysia is still an unexplored area. This study gives light on the implementation of CCL provisions in IBs.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47213348","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}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：