PERSEPSI TOKOH MASYARAKAT KOTA TANJUNG PURA TENTANG ISU RIBA DALAM MENINGKATKAN MINAT MASYARAKAT MENABUNG DI BANK SYARIAH INDONESIA KCP STABAT

The development of Islamic banking in Indonesia today has experienced a rapid increase both in quantity and quality. As an institution that operates based on sharia principles, Islamic banks have different characteristics and assessments of financial performance from conventional banks. Islamicity Performance Index is one of the new concepts as a method that can be used to evaluate the performance of Islamic banks which are not only financially but also able to evaluate the principles of fairness and halalness of an Islamic banking.This study aims to reveal the application of sharia principles to the performance of Islamic Commercial Banks in Indonesia for the 2017-2020 period by using the Islamicity Performance Index. The ratios used are Profit Sharing Ratio, Zakat Performance Ratio, Equitable Distribution Ratio, Directors-Employees Welfare Ratio, Islamic Investment Vs Non-Islamic Investment, Islamic Income Vs Non-Islamic Income and the AAOIFI Index. The data used in this research is secondary data. The population of this study is all Islamic Commercial Banks in Indonesia for the 2017-2020 period, with a sample of five banks. Sampling was carried out using purposive sampling method. From the results of this study, it was found that the performance of Islamic banks can be said to be "unsatisfactory" because they have implemented profit sharing in accordance with Islamic rules and sharia, although the share of profit sharing is still lower than other financing. Islamic banks in issuing zakat are still not maximal, namely below 1%. In distribution to stakeholders, Islamic banks have issued qards and donations, providing employee salaries and net income which are still not felt by the benefits of the stakeholders. In the comparison of the average salary of directors with the average salary of employees, there is a difference in the average salary which is too high so that justice must be upheld in Islamic institutions to reduce the gap between directors and employees. Islamic Commercial Banks invest their funds in the halal sector with a ratio yield of 100% and already have 99% income from halal income. Shariah principles set by AAOIFI as a whole have been fulfilled by Sharia Commercial Banks in terms of promotion costs, risk-weighted assets, non-performing financing, interest-free income, profitability and distribution of zakat, although many of these points have not been maximized. The conclusion is that Islamic Commercial Banks in Indonesia still need to evaluate their performance for a better future.

The intention of this paper is to examine the level of customer’s satisfaction inboth conventional and Islamic banks and to find out that the customers of which type of bank are more satisfied. A modified SERVQUAL model has been used for this purpose. Field survey was carried out through questionnaire based on modified SERVQUAL model. Data were collected from 500 walk-in customers of Islamic and conventional banks andanalysed through SPSS 16. The results show that the customers of Islamic banks are more satisfied and loyal than the customers of conventional banks.This study will help policy makers of Islamic and conventional banks understand the behavioural differences of customers and will also help them to align their service quality according to customer’s perceptions.

Most boom-bust cycles witnessed across the world in recent decades have exposed several underlying factors that highlight the vulnerability of conventional banking, namely, high leveraging, wholesale financing, and utilization of complex instruments. Islamic financial institutions largely escaped the direct impact of the global financial crisis. In theory, Islamic banks are more resilient to shocks than conventional banks because ‘gharar’ considerations prohibit them from investing in excessively risky assets, as well as zero-sum betting on derivatives. Moreover, by promoting risk-sharing (as opposed to risk transfer) and endorsing investment in wealth-creating activities, the asset-based nature of Islamic financing naturally curbs excessive leverage. This paper investigates Does the Financing Model of Islamic Banks make them More Stable. For this, we proposed that the risk of fluctuation of the interest-based instrument (risk to banking sector stability) is counterbalanced by non-banking type movements through inventory changes thus making Islamic banking more stable. Specifically, we focused on three factors for comparison between Islamic and conventional banking systems, First factor was returns represented by ROA, ad ROE. The second was the stability, measured by volatility of returns. And the third factor was market risk represented by Beta. We hypothesized that the risk of the banking system is mainly due to interest rate movements. A sharp increase in interest rates would adversely affect the returns not only due to maturity mismatch problem but also due to increased loan loss provisions, taken because of higher chances to default. This makes the banking system more volatile and exposes it to systematic risk. Islamic banks on the other hand have mandatory involvement of underlying products in the lending transactions. This makes banks not only take exposure of those products on their balance sheet in form of inventory but also absorb their fluctuations in returns through mark to market adjustments. As these adjustments would no be highly correlating with interest-based earnings, as well as systematic risk, this would not only make total returns of Islamic banks more stable but also have less exposure to market risk. Since Islamic banks have a diverse earning base, the pure effect of inventory fluctuation was captured by Return of Financing product Inventory of Islamic Banks. Also, we explored the effect of different bank-specific factors on Returns (ROA, and ROE), stability (volatility of ROA, and ROE), and market risk (BETA), and how these factors affect conventional and Islamic banks differently. These included Loan ratio (LR), Asset growth (AG ), the logarithm of total assets (LogTA), the ratio of loan loss provision over assets (LLP), the ratio of equity to assets (EQA), Return of Financing product Inventory (FPI ), and FOCUS measures the degree of specialization/ diversification in a bank's earnings. Dataset of a total of 13 banks (9 Conventional and 4 Islamic banks) operating in Pakistan was collected, for the period from 2009 to 2018. Results were according to expectations. All three factors (returns, stability, and market risk) seem to have a significant difference in their means. Where Islamic banks seem to have higher and more stable returns (high ROA, with lower volatility of ROA and ROE). Pure inventory returns seem to have even lower volatility than both Islamic and conventional banks, supporting the claim that the effect of inventory portion in Islamic banks’ balance sheet makes them more stable. Islamic Banks also seem to have lower market risk (low Beta) as compared to conventional banks, presumably because of countercyclical inventory movements. The results of the regression suggested that size has a significant negative effect on ROE of both conventional and Islamic banks, size also seems to decrease the volatility of ROE in both types. Size also seems to decrease systematic risk in an Islamic bank. loan loss provision also seems to inversely affect ROE and its volatility, but interestingly, does not seem to affect Islamic banks. Capital adequacy also seems to affect the ROE of both Islamic and conventional banks but seems to provide stability in returns for Islamic banks as it has a negative effect on the volatility of both ROE and ROA. Asset growth also seems to be inversely affecting the volatility of ROA for the overall sample. Results also suggested that Diversification in a bank's earnings seems to improve ROA of conventional banks, whereas Financing product Inventory returns seem to be positively affecting the beta.

PurposeThe purpose of this study is to critically evaluate how conventional and Islamic banks trade off risk, efficiency and financial performance in their business models, to investigate how patterns of risk and efficiency vary between conventional and Islamic banks and to critically evaluate how the profitability of conventional and Islamic banks varies following the financial crisis.Design/methodology/approachThis study uses univariate and multivariate statistical techniques by investigating 12 Islamic banks and 34 conventional banks operating in the Gulf Cooperation Council (GCC) region has been studied over the period 2011–2018.FindingsThe results suggest that Islamic and conventional banks differ not in the levels of efficiency, risk and profitability, but rather in how risk and efficiency influence banks’ financial performance. Islamic banks are found to be less influenced by the adverse effects of credit risk, which is consistent with the risk-sharing nature of Islamic financing. However, the results only hold for return on assets (ROA) and return on equity (ROE) while the net interest margin is observed to be negatively influenced by credit risk. Lower cost-income efficiency is also found to boost ROA and ROE of Islamic banks which could be attributed to a larger share of non-interest revenues due to Sharīʿah-compliance.Research limitations/implicationsFrom a theoretical point of view, this study helps to understand the risk, efficiency and financial performance of Islamic banks in comparison with conventional banks.Practical implicationsThe results of this study can serve bank managers, regulators and shareholders. Policymakers should encourage a more risk-sharing structure of Islamic financing as it brings less adverse effects of credit risk and increases income sustainability for Islamic banks. The present study may help bank managers to improve the financial performance of their firms by controlling risk and efficiency. The study results also have implications for shareholders and depositors of Islamic and conventional banks as they should have a predetermined position about the level of credit risk and efficiency in each banking system.Originality/valueThe foremost contribution is that this is one of the few studies to compare risk, efficiency and financial performance of Islamic and conventional banks in the GCC region. By using the latest data, this paper hopes that the findings will be more relevant than previous studies to the current situation of the banking industry in the region.

PurposeThis paper aims to shed light on the risk structure in the presence of Islamic banking. The author concentrates on the relationship between Islamic banking and conventional banking in Turkey. Islamic banking and conventional banking are considered to be different kinds of sources for funding. Returns in the conventional banking are expected to be heavily influenced by the interest rate in the money market. However, Islamic banking returns are interest-free so that interest rate changes are not expected to affect the deposit returns in Islamic banks. Interest rates in the economy are a proxy to highlight the general risk level of the economy. By looking at the causal relationship between the deposit returns of both Islamic banks and conventional banks, it is possible to address the different types of banking in the general risk structure of the economy. This is one of the first studies to address the mentioned difference in banking sector in Turkish economy.Design/methodology/approachThis paper tries to identify the direction of causality between Islamic and conventional banking term deposit rates by means of Granger Causality. Also, Granger Causality test results will guide to explore the Islamic and conventional banking deposit return linkages. The author has extended the study with vector autoregressive analysis to understand the correlation structure between conventional deposit rates and the profit–loss sharing ratio of Islamic Banks. The author has also extended this study with impulse response functions to see whether the shocks hitting into the conventional banking affect Islamic banking and vice versa.FindingsThe results suggest that there is no significant clear relationship between both banking sectors. This result can be interpreted, as Islamic banks do not adjust their profit–loss sharing (PLS) ratios pegged to the interest rate offered by conventional banks. Also, conventional banks determine their interest rate without any connection to the Islamic banking PLS ratios. Overall results of this study contradict the findings of studies which conclude that Islamic banking might not be different from the conventional banking. It is reported that inferences from pair-wise Granger causality alone might be spurious, as the analysis based on non-stationary series can be a consequence of time functional characteristics of the time series.Social implicationsThe results can be taken as counter evidence to the hypothesis “Islamic banks determine their PLS ratios based on the interest rates offered by conventional banks”. This address that the Islamic banks may offer alternative financing methodology which has different procedure. Hence, Islamic finance can be taken as an alternative method with its asset-based healthier structure.Originality/valueThis is one of the first studies to address the Islamic versus interest-based banking difference in banking sector in Turkish economy. This paper tries to identify the direction of causality between Islamic and conventional banking term deposit rates by means of Granger causality.

The sharia banking phenomenon get higher attention for the last two decades, and received special attention by the banking industry. In sharia banking, interest-based principal is not allowed; instead, profit-and-loss-sharing is applied. In Indonesia, the practice of sharia-based banking system is based on the Banking Act No. 7 May 1992. This Act provides Islamic banks freedom to develop their own strategy to generate income, either in the form of profit sharing or through the interest. Although there was only one Islamic bank operated at the time the Government passed the law, the number has been continue to growing since then. This study aims to answer the question on the performance of Indonesian Islamic banks’ during the latest four-year period using individual-bank data. In addition, this study also attempts to compare the performance of Islamic and conventional banks. Using three financial efficiency ratios, (i.e. cost efficiency ratios, revenue efficiency ratios and profit efficiency ratios), it is found that there is a significant performance improvement of Islamic banks due to costs and revenue efficiency. T-test and F-test are used to check significance difference of Islamic and conventional banks. Results from the study show that Islamic banks experienced higher cost efficiency (CITR and NIER) than that of conventional banks. In addition, Islamic banks also appear to be able to generate more revenue and profit efficient than those of conventional banks. This indicates that Islamic banks are able to generate more revenue and profit than conventional banks, although they have less experience than conventional banks. Furthermore, big Islamic banks have also higher value of revenue efficiency (NIM) and profit efficiency ratios (ROAA and ROAE) than big conventional banks.

The banking industry in Indonesia is increasingly crowded with the emergence of banks operating under sharia principles. Although in general almost all banking products offered by Sharia banking and conventional commercial banks are relatively the same, in reality they both have different operational principles, especially in terms of efforts to obtain profits. In addition, the development between Sharia banking is not as expected given the population of Indonesia, which is predominantly Muslim. Sharia banking are far behind conventional banks. The aim of the research was to find out the perceptions of the people of North Sumatra on Islamic banking through surveys in 4 major cities namely Medan, Binjai, Langkat and Deli Serdang which were considered to represent the Muslim population in North Sumatra. This study used a quantitative descriptive survey and study . The survey is used to obtain a comprehensive picture of people's perceptions of Islamic banking in North Sumatra. Quantitative descriptive study, used to explore strategies and considerations used by Islamic banking to the community.The results of the study show that the three independent variables have an influence and it can be seen that the service variable is the main variable that contributes most to its relationship with the results of public perception on the two research objects on Banking.

This paper analyzes the performance of Islamic banks compared to that of conventional banks in Pakistan. This comparison is based on the financial performance, product services and customer perception. We have selected two Islamic banks, namely Meezan Bank limited & Albaraka Bank, and two conventional Banks, Soneri and My Bank. This selection was made because of the similar size of these banks in terms of their deposits. The paper shows that Islamic Banking is falling behind the conventional one both in terms of its business as well as customer perspective. The research is divided into three parts. First part covers the comparison of financial analysis between Islamic and conventional banks in Pakistan over last five years. For financial analysis, sixteen ratios are selected and are grouped in five major groups namely: profitability; liquidity; business development; efficiency and solvency ratios. The hypothesis is generated to rank the financial health of each bank. The second part compares the products services of Islamic and Conventional banks. This product service comparison is done on the basis of deposits, financing and services. For this deposits and certificates accounts are compared in terms of return or profit they are offering to their customers. Financing part measures the differences of car and home financing between Islamic and conventional banks. Last section of this part measures the difference of services that are provided by the respective banks to their customers. The final part of this research identifies the customer perception about Islamic and conventional banks. For this, a survey analysis is conducted from different customers of both Islamic and conventional banks. In this survey analysis, the rationale is to identify which banking system is preferred by customers. It is concluded that customers prefer Islamic banks rather than conventional banks.

This study assesses the non-performing loans of conventional and Islamic banks as well as the influence of ownership on the non-performing loans of conventional and Islamic banks. Due to fundamental differences in Islamic and conventional bank such as funding, non-performing loans might have differing effects on Islamic and conventional banks. This study utilised data of 26 conventional banks and 16 Islamic banks from Malaysia from 2012 to 2020. A Random Effect model was used to investigate the difference between conventional and Islamic banks’ non-performing loans as well as the influence of ownership on non-performing loans of conventional and Islamic banks. Results showed no significant differences for non-performing loans of conventional and Islamic banks. This result implies that despite the fact that Islamic banks may benefit from lower agency costs, this does not considerably decrease the likelihood of non-performing loans. Foreign Islamic banks shows higher non-performing loans in comparison to domestic Islamic banks. However, there were no significant differences for non-performing loans between foreign conventional and domestic conventional banks. This study suggests that Islamic bankers, particularly those intending to expand into other countries, investigate nonperforming loans, which can impact the risk of a foreign Islamic bank.

<em>Islamic bank is a bank that runs its business activities based on sharia principles. At the time of the economic crisis of 1998, many conventional banks collapse while Islamic banks are not affected. After the crisis, Islamic banking experienced significant growth in Indonesia. The problem discussed in this research is how is the history and development of regulation on Islamic banking in national legal system in Indonesia? The method used in this research is normative legal research by using approach of legislation. Sources of data used in this research are secondary data, namely data obtained from legislation, scientific journals, and legal literature. Data collection techniques used in this research is literature study. Data analysis technique used in this research is qualitative analysis. </em><em>The result of this research is that the initiative on establishment of Islamic bank in Indonesia was started since 1990 by the Indonesian Council of Ulama, which was realized with the establishment of Bank Muamalat Indonesia on November 1, 1991. The early development of Islamic banking in the national banking system was responded quickly by the government with the enactment of Act Number 7 of 1992 about Banking, which was later amended by Law Number 10 of 1998. In addition to being a devastation to the national banking system, the economic crisis that occurred in 1998 also became the starting point for the development of Islamic banking in Indonesia. Some conventional banks began to expand their business by establishing Islamic banks. Responding to the development of significant Islamic banking in the national banking system, on July 16, 2008 was enacted Law Number 21 of 2008 about Islamic Banking as the legal basis for Islamic banks in Indonesia.</em>

&lt;p class="Normal1"&gt;Purpose - This paper aims to develop the concept of prudential banking based on sharia principles to minimize non-performing financing in Indonesia.&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;&lt;p class="Normal1"&gt;Methode - This desk research was based on many relevant studies advanced in the literature. The review was particularly focus on Sharia Banking Law, Indonesian Banking Regulations, and Financial Services Authority Regulations. A secondary data published by the Indonesian Central Bank on Sharia Banking Statistics for 2014-2018 was used to sharpen the analysis. In addition, many previous studies on Sharia Banking conducted in other countries (e.g. Malaysia, Pakistan and other European countries) were discussed in order to widen the importance of Sharia banking in those countries.&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;&lt;p&gt;Findings - The findings of this study include as follows. First, the development of the concept of Islamic prudential banking in the operations of Islamic banks need to give attention towards business risk and the certainty of the implementation of Islamic principles. Second, the operational of Islamic banks need to consider the important of sharia human resources, sharia product, sharia process (marketing, management, and standard operational procedure (SOP)) as well.&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;&lt;p class="Normal1"&gt;Research limitation- This research limitation article requires follow-up to explore the potential of applying Islamic prudential banking in depth to Islamic banks in Indonesia and apply it to every operational standard procedure from banks.&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;&lt;p class="Normal1"&gt;Practical implications – The Practical implication is that Islamic prudential banking should be implemented in accordance with the Islamic concept in its operations so that it is truly able to minimize non performing financing. This study can also be used for policy instruments to improve Islamic Prudential Banking in Indonesia which is not yet available. Also, it can be implemented by other stakeholders of Islamic Banking .&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;&lt;p class="Normal1"&gt;Social implication- The social implication of this study to increase work motivation and raises honesty in work, in accordance with the objectives of Islamic banks.&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;&lt;p class="Normal1"&gt;Originality/Value - The originality of this study is due to the facts that studies on Islamic Prudential Banking have little examination. For this reason, this review study can be used as the important input to develop Islamic prudential banking and to be implemented by the banking and the regulators&lt;/p&gt;&lt;p class="Normal1"&gt; &lt;/p&gt;

This study was conducted to measure and compare the productivity level between conventional and Islamic commercial banks in Indonesia during the COVID-19 pandemic. The number of samples used in this study was 105 banks consisting of 95 conventional banks and 10 Islamic banks. The level of productivity was measured using the Malmquist Productivity Index (MPI) method and Data Envelopment Analysis (DEA) with an intermediation approach, while the productivity of conventional and Islamic commercial banks was compared using normality and different tests. The results showed that the productivity level of the Islamic banks with a Total Factor Productivity Changes (TFPCH) value of 1.001 was driven by technological advances. Meanwhile, the conventional banks were not productive. On the other hand, the results of the different tests showed that there was no significant difference between the productivity level of the conventional and Islamic banks. Conventional banks must enhance innovations in the use of technology in their operational activities to improve their productivity and maintain their high efficiency achievement. Meanwhile, Islamic banks could improve their efficiency in the operational activities so that they would achieve higher productivity and to innovate continually with the use of technology. During the study observation, there was no study comparing between the productivity level of conventional and Islamic commercial banks during the COVID-19 pandemic in Indonesia. Therefore, this research was the first study to discuss the comparison of productivity level between conventional and Islamic commercial banks in Indonesia during the COVID-19 pandemic.

Islamic Bank is a bank whose operating system uses sharia principles. Currently many terms are given to refer to Islamic Bank entities other than Islamic Banks themselves, namely Banks Without Riba (La Riba Bank), and Islamic Banks (Shari'a Bank) or banks based on sharia principles. Students are the right target for Islamic banking to increase savings growth. Savings are needed in students, not only students who come from within the city but also come from outside. The purpose of this study is to find out how the Economic School of Muhammadiyah Jambi students’ 'perceptions about Islamic banking, and how strong the influence of students' perceptions on the decision to save in Islamic banks. The theoryies used are perception theory by Michael W. Levine &amp; Shefner and the factors that influence consumer decisions by Mowen and Michael. The results of this study indicate that the perception of students of the Economic School of Muhammadiyah Jambi regarding sharia banking services in Jambi is very positive, indicated by the level of their understanding of Islamic banking services. They believe well that saving in Islamic banks is more beneficial than in conventional banks. However, the decision to save is still in conventional banks. There are only 24.6% of students who have savings in Islamic banks. The remaining 75.4% do not have savings in Islamic banks.

This research is motivated by curiosity about Islamic banking services in Riau Province during the Covid-19 pandemic. But before that, it is also important to examine customer knowledge on products and service facilities in Islamic banking, reasons customers choose Islamic banks, and reasons customers use both types of banks (Islamic banking and conventional banking). This research is a field research with survey technique. The population is Islamic banks customers in Pekanbaru and the samples in this study refer to the calculation of Hair et al with total assets of Islamic banks in 2020 as a consideration in determining proportional allocation. Sources of data in this research are primary and secondary data. While the data collection techniques using questionnaires and documentation. The data analysis technique uses descriptive statistics with a frequency distribution. The results of the research found that there are still many Islamic bank customers who do not know about specific Islamic bank products such musyarakah products, mudharabah products, ijarah products,and rahn services. The results also found that religious reasons are the main factor for customers in choosing of Islamic banks. The factor of ease of access to more branches is the main reason customers use both types of banks. Finally, the results of the research found that the most Islamic bank customers are satisfied with various aspects of the services provided by Islamic banks, while the five service aspects whith the highest level of customer satisfaction are Islamic bank staff friendliness, Islamic bank name and image, Islamic bank employee skills, confidentially Islamic bank customer data, as well as various kinds of facilities offered by Islamic banks. The results of this research are ini line with studies that have been conducted in Jordan and Kuwait, where the highest level of satisfaction is found in the name and image aspects of Islamic banks even though there are differences in respondent demographics and the condition of the Covid-19 pandemic.

PurposeBank customers’ perceptions of service quality and service image of Islamic banks may differ from those of conventional banks. The purpose of this paper is to examine the differing perceptions of customers of Islamic and conventional banking systems in an emerging market, which has rarely been addressed and adds to the body of knowledge on this topic. This study also re-examines the SERVQUAL model of customer banking services to measure their impact on customer satisfaction and loyalty.Design/methodology/approachThe study uses responses from a randomly drawn sample of 229 customers from conventional banks and 225 customers from Islamic banks operating in Bangladesh using a structured questionnaire. SPSS and structural equation modeling techniques were employed as statistical tools for data analysis.FindingsOverall, the examined service quality dimensions wield varying effects on client satisfaction mediated through the perceived image of banking services. Islamic bank customers’ perceptions of the level of reliability, responsiveness, security and reputation were significantly higher than those of conventional banks.Research limitations/implicationsThis study enhances our understanding of how Islamic banking practices differ from those of conventional banking in terms of service quality and image-related factors. More specifically, the findings of this research explain consumers’ perceived assessment of satisfaction and loyalty in a comparative research setting.Originality/valueNo prior studies have addressed the impact of the individual service quality dimensions on image factors in the context of conventional and Islamic banking in an emerging market, Bangladesh.