An Islamic Perspective on Corporate Social Responsibility of Islamic Banks

Abstract

Basically, all of the world’s top multinationals engage in corporate social responsibility (CSR) in some form and there is almost no country in which business has not taken up the challenge of CSR in some way. As a result, Islamic banks which are also part of business community face even more expectations in performing CSR as Islamic institutions. However, the status of CSR concept and the accountability of Islamic bank in performing CSR activities have not been ascertained from Shari’ah perspective. Therefore, this study aims at determining the status of CSR notion and investigating the legal status of Islamic bank in performing CSR activities from an Islamic perspective. This study is based on Islamic religious values and beliefs according to Shari’ah, which is the sacred law of Islam derived from the holy Qur’an and the Prophet’s hadith. Evidently, it was found that social responsibility is a wonderful concept and a noble practice which is required in Islam, even has been embedded in Islamic teaching fundamentally based on the khalifah concept. It was also found that Islamic bank is an acknowledged legal entity in Islam which consequently, is accountable for CSR.