Islamic Bank: A Bank of Ethics in Compliance with Corporate Social Responsibility

Abstract

Purpose: This paper aims to shed light on the issue's prospects, as ethics in Islamic banking may become another distinguishing factor when compared to its conventional counterpart. This comparative research will compare co-operative banks that emphasize ethical operations to Islamic banking in Pakistan. Although ethics in other countries' co-operative banks has become a new market segment and succeeded because it drew many new customers who wanted to engage in a morally sound investment, Islamic banks continue to concentrate only on sharia. Design/Methodology/Approach: The qualitative method is used in this study by analyzing statutes, particularly Islamic jurisprudences, local and international protocols, conventions, and treaties Findings: In this work, it shows that ethics has the potential to make Islamic banking a full-fledged financial system if it is used as one of Islam's three pillars. Implications/Originality/Value: In the Islamic economy, Islamic banking is unquestionably at the forefront. Along with Faith (Aqidah) and Islamic Legal Jurisprudence (Sharia), Ethics (Akhlak), as in corporate social responsibility, is a core part of Islam that doesn't get as much attention as it should. An Islamic bank should primarily concentrate on sharia despite balancing those three pillars. In practice, a business with a high ethical standard must be profitable, legal, honest, and ethical while also considering long-term sustainability.