Bank Window Research Articles

A Study on The Cost And Profit Efficiency of Islamic and Conventional Bank Islamic Windows in Oman: A Proposed Framework

Objective: This study aims to analyze the efficiency of Islamic and conventional banks and their respective Islamic windows in Oman in terms of costs and profits. Theoretical Framework: The research employs a framework that examines cost and profit efficiency within the banking sector, contrasting the performance of full-fledged Islamic banks and Islamic windows of conventional banks. This framework also investigates the impact of bank-specific variables on efficiency levels. Method: Using empirical data from the Omani banking sector, the study quantifies efficiency by analyzing bank-specific variables such as capitalization, profitability, operational costs, and loan activity. The comparison includes both Islamic banks and the Islamic windows of conventional banks as of the end of the third quarter of 2022. Results and Discussion: The findings reveal that, overall, banks in Oman are more efficient at generating profits than controlling costs. Conventional banks, on average, demonstrate higher efficiency in both cost and profit metrics compared to Islamic banks. There exists a positive correlation between both types of efficiencies and factors like bank capitalization and profitability, while a negative correlation is evident with operational costs. Furthermore, increased loan activity is associated with higher profit efficiency but adversely affects cost efficiency. Research Implications: These results underscore significant efficiency disparities between Islamic and conventional banking sectors. They highlight the need for Islamic banks to enhance their cost management strategies without compromising profit generation, leveraging the benefits derived from their association with parent conventional banks. Originality/Value: The study contributes to the literature by providing a comparative analysis of cost and profit efficiencies in Islamic and conventional banks, with a particular focus on the unique market dynamics of Oman. This research is valuable for stakeholders in the Islamic banking industry, offering insights into leveraging existing infrastructures and enhancing operational efficiencies.

Islamic marketing of conventional banks: bridging managers’ and clients’ perceived gaps

Purpose While the Noble Quran dictates the prohibition of interest, conventional banks promote Islamic banking by opening Islamic banking windows. Against this backdrop, this study aims to investigate the perceived gaps between managers and clients in Islamic marketing and banking, focusing on conventional banks’ Islamic banking windows. Design/methodology/approach Guided by a qualitative approach, semi-structured personal interviews and observations served as the data collection methods, involving 25 banks and 50 respondents in 3 different districts, namely, Shirajganj, Rajshahi and Chapainawabganj of Bangladesh from January to October 2023. The data were analysed using ATLAS.ti 2023 to explore codes and quotations derived from 14 interview questions. Further, ATLAS.ti 2023 facilitated synthesizing content, concepts, code occurrence, network analysis and thematic analysis. Findings Islamic and non-Islamic banks use Quranic verses, hadiths (prophetic traditions), images of mosques, the Kaaba and Arabic texts as Islamic marketing tools. These spiritual, divine and prescriptive tools are associated with Islamic banking. However, conventional banks receive criticism for having separate Islamic banking windows to serve religiously conscious clients, which generates tension among clients and bank managers. Practical implications The findings can theoretically assist academics in examining conventional banks’ Islamic marketing and banking practices, opening Islamic banking windows. Importantly, Shariah boards can play policy roles in safeguarding the function of Islamic marketing and banking. Managers can use the findings to anticipate client perceptions and enhance Islamic marketing and banking strategies. Likewise, the social implications include the explicit stance of Shariah to mitigate the mixture of halal and haram banking. Originality/value This pioneering study explores the perspectives of Islamic banking windows by non-Islamic banks. The combination of Islamic marketing and banking is a noteworthy novelty in this study and deserves recognition for its unique contribution to halal marketing and finance.

Window dressing of regulatory metrics: Evidence from repo markets

This paper investigates both the magnitude and the drivers of bank window dressing behavior in euro-denominated repo markets. Using a confidential transaction-level data set, our analysis illustrates that banks engineer an economically sizeable contraction in their repo transactions around regulatory reporting dates. We establish a causal link between these reductions and banks’ incentives to window dress and document the role of the leverage ratio and the G-SIB framework as the most relevant drivers of window dressing behavior. Our findings suggest that regulatory action is warranted to limit banks’ ability to window dress.

EXPLORING THE BANKERS’ PERSPECTIVES ON SHARIAH AND OPERATIONAL ISSUES OF RESTRUCTURING AND RESCHEDULING IN ISLAMIC FINANCING DURING COVID-19 PANDEMIC

The Central Bank of Malaysia ordered all banks to give an automatic six months moratorium or loan or financing deferment starting April, 1 2020 to their customers during the Covid-19 pandemic since many customers had difficulties paying their monthly financing obligations to banks. Thus, the objective of this paper is to explore the bankers’ perspectives on Shariah and operational issues arising in Islamic banks in implementing moratorium which involves restructuring and rescheduling financing facilities during Covid-19 pandemic. At the same time, the methods these bankers used to manage the issues are also highlighted in this paper. A qualitative analysis is applied in this paper where the researchers conducted interview sessions with the Head of Shariah Department from an Islamic banking window and another from the Development Financial Institution which offers Islamic banking products and services. This study's findings show that there are certain perspectives from bankers in dealing with Shariah issues regarding restructuring and rescheduling during moratorium such as the issue of qalb al-dayn (debt restructuring), capitalization of accrued profit in the financing facilities as well as the operational issues related to the system and people. It can be deduced then that all Islamic banks were doing extremely well in their steadfast endeavors towards offering remedies to the issues faced for the sake of the overall improvement of Islamic banks in the implementation of restructuring and rescheduling of financing facilities as outlined by guidelines or Resolutions issued by the Shariah Advisory Council of Bank Negara Malaysia.

Exploring the Influence of Corporate and Shariah Governance on the Profitability of Banks and their Islamic Windows: A Comprehensive Study of Pakistan

The main purpose of our study is to take a look at how it impacts corporate governance and shariah governance on the profitability of conventional banks of Pakistan and their Islamic windows, one more objective of this study is to investigate whether there is any significant difference in the profitability of conventional banks after opening of Islamic windows. Our research study's theoretical basis draws from corporate governance theories, agency theory, resource dependence theory, and Islamic finance principles. By examining the relationships between these independent variables and the dependent variables (ROA and ROE) our study aims to provide insights into the factors influencing the financial performance of Shariah-compliant banks. Our study is based on 10 conventional banks which also provide Islamic windows. For our analysis in the current study, we will use annual data that covers the period from 2013 to 2022. To achieve these objectives we are using a linear regression model and paired sample t-test. Our findings conclude that bank age and board size have a significant positive impact on corporate governance in contrast, board diversity has a significant but negative impact on the ROA of conventional banks on the other hand bank size and board independence do not have any impact on ROA and if we talk about ROE board size and board independence had a helpful important impact on ROE while bank size bank age and board diversity doesn't have any significant impact on ROE of conventional banks of Pakistan. In the case of Shariah governance, only the Shariah board has a significant positive effect on ROA and ROE ratio on the other hand remuneration and charities don’t have any effect on the Islamic windows of conventional banks. We further discover no substantial variation in the ROA & ROE of Pakistani conventional banks following the establishment of Islamic windows. The findings of this study suggest that the government of Pakistan should focus on promoting good corporate governance practices in banks, especially regarding board size, bank age, board diversity, and shariah board because these factors increase the profitability of conventional banks.

Corporate governance, chief executive officer power and performance of Islamic banking in east africa

This study aims to investigate the relationship between corporate governance variables, CEO power, and the performance of Islamic banking in East Africa. A Hierarchical panel regression model was to test both direct and indirect effect. Panel data was collected from all 10 full-fledged Islamic banking in East Africa and conventional banks with Islamic banking window for 7 years (2013-2020). Empirical results showed that board independence, board financial expertise and board activity positively affect performance of Islamic banking in East Africa. Powerful CEO negatively moderated the effect of board independence and board financial expertise on performance of Islamic banking in East Africa. Based on the findings, board independence, board financial expertise and board activity play a major role on improving performance of Islamic banking. In addition, the study support agency theory perspective that powerful CEO can reduce independence of board directors, hence limiting board activity and board financial expertise positive contribution on performance of Islamic banking. There has been limited studies on corporate governance and performance of Islamic banking in East Africa. This study contributes on board independence, board financial expertise and board activity of Islamic banking literature. The study provided crucial insight on corporate governance variables of Islamic banking in East Africa and their link performance.

SHARI‘AH DISCLOSURE AND READABILITY OF ISLAMIC BANKS IN PAKISTAN

Islamic banks are required to ensure Shari‘ah compliance as established by regulatory authorities, i.e., the State Bank of Pakistan. Stakeholders consider Shari‘ah compliance as a crucial factor when investing in these banks, which is why annual reports are produced to communicate the level of compliance. However, these reports often lack complete and readable information about the banks’ level of Shari‘ah compliance. This study analysed the extent of Shari‘ah governance disclosure and readability in annual reports of 19 Pakistani banks, including full-fledged and window Islamic banks. Using the Shari‘ah disclosure index and content analysis, the study identified the disclosure level and explored the disclosures’ readability using Bog Index in the Shari‘ah reports. Results showed that full-fledged banks had a higher level of disclosure than window banks. Meanwhile, Shari‘ah reports were generally difficult to read. Improving the level of disclosure and readability in Shari‘ah reports can have a positive impact on all stakeholders. The study provides implications for management to enhance the level of SharÊ‘ah compliance and readability, which will lead to a better understanding of the banks’ operations, increased trust in these institutions, and ultimately, contribute to the growth and development of Islamic finance in Pakistan. Stakeholders such as investors, customers, and policymakers will be able to make more informed decisions with a clearer understanding of the banks’ operations. A better reputation for Islamic banking will help attract more customers and investors, further boosting the country’s growth and development of Islamic finance.

Business Ethics of Islamic Financial Institutions in Pakistan: Theory, Practice and The Way Forward for Sustainable Development

Purpose: This research study aims at the identification of loopholes in the business ethical framework of Islamic Financial Institutions (IFIs) in Pakistan. Design/Methodology/Approach: The researchers analysed the business ethics of IFIs in Pakistan with the help of Global Reporting Initiative (GRI) Sustainability Reporting Standards and Islamic Business Ethics. Findings: Our analysis indicates that IFIs do not seem to follow the ethical principles of Islam in true spirit for their business ethical framework. Among all IFIs in Pakistan, Takaful companies are overall best performers in GRI Sustainability Reporting Standards. Similarly, full-fledged Islamic banks and Islamic banking windows of conventional banks are the best performers in applying or disclosing Islamic Business Ethics in their annual reports. Originality/Significance: This may be perhaps the first paper which explores the business ethics of IFIs in Pakistan w.r.t to GRI standards and Islamic Business Ethics. Research Limitations/Implications: The paper focuses only on annual reports of IFIs for five years. Practical and Social Implications: This paper can provide food for thought to rethink the process of the current business ethical framework of IFIs in Pakistan. Furthermore, it suggests some practical ways for achieving higher levels of sustainable social, economic and environmental development of the country.

Ensuring The Compliance of Islamic Finance Applications with Shariah Principles in Ethiopia: The Way Forward

The notion behind Islamic finance is providing alternative Shariah-compliant financial services and products for those who do not willing to access conventional finance as it contravenes Shariah principles. Currently, Islamic finance is expanding throughout Muslim and non-Muslim countries. One of the most critical challenges of the Islamic financial sector is the extent of the compliance of Islamic finance practices with Shariah principles. Therefore, there should be a control mechanism for ensuring the compliance of the products and services provided by Islamic financial institutions with Shariah principles. Scholars argue that a Shariah governance framework should be applied by institutions engaged in Islamic finance in countries where Islamic finance is being practiced. Shariah governance framework is mainly categorized into two approaches centralized and decentralized Shariah governance framework. The availability of a centralized Shariah governance framework is essential in ensuring the application of Islamic finance in accordance with Shariah principles. Ethiopia is one of the countries that accommodated the application of Islamic finance through exclusively interest-free banking windows by conventional banks in 2011 and fully-fledged interest-free banks in late 2019. However, the National Bank of Ethiopia (NBE) did not specify any Shariah governance framework in any of its legislations. The unavailability of an established Shariah governance framework may expose the sector to Shariah non-compliance risk. This study investigates how to ensure Ethiopia's Islamic finance applications' compliance with the Shariah principles. Semi-structured interviews and document studies were conducted with 15 respondents, including experts in Islamic finance, Shariah scholars, and Islamic finance practitioners, to collect the needed data for this endeavor. The findings indicate that interest-free banks, especially interest-free banking windows, do not give the necessary attention to the issue of the Shariah governance framework. The presumed manifestations of Shariah compliance in Ethiopia are having Shariah advisory committee, using Arabic words and names for their products and services, declaring they are following the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) standards, and participating in corporate social activities. However, these claims are insufficient to argue that their products and services are Shariah-compliant, as long as an external authorized body should oversight and control their application. In addition, the results indicate that adapting the AAOIFI standards to the extent of industry development is recommended to ensure Shariah compliance in Ethiopia. Besides, considering responsible stakeholders in ensuring Shariah compliance, government/NBE and financial institutions engaged in Islamic finance are identified as primary stakeholders. On the other hand, the Ethiopian Islamic Affairs Supreme Council (EIASC), religious scholars and institutional Shariah advisors, interest-free professional associations, academicians in Islamic economics and finance, and educational institutions are considered secondary stakeholders. In addition, the findings also indicate that the policymakers' approaches of Türkiye, Malaysia, Kenya, and South Africa to the Islamic finance industry could be the best model for policymakers in Ethiopia. Establishing a centralized Shariah advisory committee under the NBE is recommended to ensure the compliance of interest-free finance applications with Shariah principles in Ethiopia. To this endeavor, all stakeholders such as government/NBE, financial institutions engaged in the Islamic finance industry, EIASC, religious scholars and institutional Shariah advisors, interest-free professional associations, academicians in Islamic economics and finance, and educational institutions should play a significant role by fulfilling their respective responsibilities.

Spin-Off Islamic Banking Window In Indonesia

<em>This article provides a discussion of some of the issues associated with Spin Off and areas that have not been critically discussed in the literature. Regulations in Indonesia require all Islamic Banking Windows to separate from their parent banks if the value of their assets reaches 50 percent of the total assets of their conventional banks or at least 15 years after the issuance of the regulation. This study is to find out how the Islamic Banking Windows spin-off is carried out, the reasons, readiness, impact, as well as criticism, suggestions and solutions to the spin-off policy. This qualitative research uses secondary data such as books, journals, articles by describing the spin-off problems comprehensively. We found 2 spin-off methods: establishing a new Islamic Commercial Bank (BUS) or transferring Islamic Banking Windows (UUS) rights and obligations to an existing BUS. A spin-off is important to do so that there is no mixing between conventional and Islamic so that there will be the development of purer Islamic products and increase customer trust and so that management is more independent in accordance with their respective businesses and can develop and compete. We also found a positive impact from the spin-off, namely increasing revenue, and accelerating the development and market share of BUS in Indonesia. The negative impact of spin-offs reduces the level of efficiency, the restructuring has not been properly controlled, the availability of networks and infrastructure is not adequate, and the stress of employees due to different leadership styles, organizational culture, or company orientation. Lastly, we find that UUS is not ready to do a spin-off before 2023 with the main problem, the capital. We suggest that regulators postpone their mandatory spin-off policy by 2023 and suggest other options such as mergers or conversions.</em>

The Impact of Competitive Strategies on Performance of Banking Sector; The Mediating Role of Corporate Social Responsibility and Operational Excellence

This study examined the mediating role of corporate social responsibility practices and the nexus between the operational excellence of competitive strategies, and performance, for Islamic banks operating in Pakistan. Particularly, two competitive strategies, namely, the cost-sensitive strategy and the differentiation strategy were considered. This study employed a structured questionnaire to collect the data from 512 respondents (361 from fully-fledged Islamic banks, FFIBs, and 151 from Islamic window banks, IWBs). A partial least square–structural equation modeling approach was employed to test the hierarchal component model. As a robustness check, the Gaussian copula approach was used to address the endogeneity issue, and the Partial least square prediction-oriented segmentation approach was adopted to explore the unobserved heterogeneity. The findings showed evidence of complementary partial mediation between competitive strategies and bank performance, channeled through operational excellence. However, corporate social responsibility (CSR) practices partially mediated the relationship between cost-sensitive strategy and bank performance. This study is worthwhile for managers, policy makers and regulatory authorities concerned with religiously conscious corporations.

THE SECTORAL FINANCING DIVERSIFICATION AND THE PROFITABILITY OF ISLAMIC BANKING IN INDONESIA

This study investigates the influence of sectoral financing concentration on the profitability of Islamic banking in Indonesia. The data is aggregated by Indonesian Islamic banks from January 2015 to June 2021. Islamic banks are divided into two, namely Islamic commercial banks and Islamic window banks. The study used Autoregressive distributed lag (ARDL) and Panel Mean Group (PMG). The results showed that sectoral financing concentration increased the profitability of Islamic commercial banks while diversification of sectoral financing boosted the profitability of Islamic window banks. In addition, this study also showed that size and inefficiency negatively affected the profitability of Islamic commercial banks and window banks. This result implies that the right sectoral financing policy for Islamic commercial banks is financing concentration. This strategy implies that Islamic commercial banks must build competitiveness in certain sectors of the economy. For this reason, there is a need to increase the skills of the worker to build a competitive advantage in the sector that is the focus of financing. In comparison, sectoral financing diversification is more applicable for Islamic window banks. To support this diversification strategy, banks must conduct good supervision in the financing, especially sectoral financing based on profit-sharing contracts.

Workflow Improvement after Implementing Remote Blood Allocation Devices at an Academic Medical Center Blood Bank

Abstract Introduction/Objective Patients with hematological cancer routinely receive red blood cell (RBC) transfusions in the outpatient infusion clinical setting as part of their clinical therapy. Typically, RBCs are delivered to the outpatient infusion clinic via the pneumatic tube (P-tube). However, due to the recent expansion of the hospital footprint and the new location of the transfusion services, the P-tube encountered challenges that impacted the reliability of the delivery of RBC, which can delay patient care and affect patient satisfaction. This study’s purpose is to evaluate the pre-and post-implementation of the Haemobank-20 (HB20), remote blood storage and dispensing device, by reviewing the turn-around time (TAT) and the number of orders fulfilled outside of the transfusion service. Methods/Case Report Blood products are stocked to the HB in the infusion center. An electronic transfusion schedule is reviewed the night before scheduled transfusions to ensure appropriate inventory. When a patient is ready for the transfusion, the clinical nurse will use the device to retrieve blood products for the patient from the HB20. The average timed delivery time from the transfusion service to the outpatient infusion center is about 11 minutes. Data was retrospectively gathered from a 10-month interval before and after HB20 implementation to evaluate the number of orders fulfilled by the HB20. Results (if a Case Study enter NA) The HB has helped maintain nurse-to-patient ratios, reduced traffic at the blood bank issue window, and significantly sped up the turnaround time of RBCs from 11 minutes to less than 60 seconds. Before HB implementation, staff at the blood bank received 2853 units of RBCs through the blood bank window. This has been decreased by 61.2 percent to 1136 RBCs. Conclusion Implementing the Haemobank-20 in the outpatient infusion center has successfully reduced the turnaround time and the workload within the Transfusion Services. The current results study demonstrate that the remote blood-release system is safe and helpful in improving the efficiency of blood issue for patients in remote outpatient locations.

EFFICIENCY OF ISLAMIC BANKS: EVIDENCE FROM ISLAMIC WINDOWS OF CONVENTIONAL BANKS IN ETHIOPIA

The study examines the cost and technical efficiency of selected Islamic banking windows of conventional banks in Ethiopia during the period of 2016-2020. The parametric method, stochastic frontier approach (SFA) was employed to measure both cost and technical efficiency of the banks. The efficiency scores of the sampled banks can be measured based on their performance in utilizing inputs to successfully generate output during the study period. It gauges the service quality of the banks taking loans and deposits as well as operating income and expenses into consideration. The study uses time series data from four conventional banks which provide Islamic banking widow in Ethiopia. The statistical findings show that the conventional banks have fairly better technical efficiency individually and collectively; however, the cost efficiency scores indicate that the banks are not efficient enough in terms of minimizing costs for a given scale and mix of outputs. Similarly, the results of the stochastic technical frontier estimates uncovers that there is positive significant relationship between the input variables namely total deposits and total operating expenses and output variables namely total financing and total operating income. The outputs remain an essential contributor to the cost efficiency in Islamic windows conventional banks in Ethiopia.

Financial strength of banking sector in Bangladesh: a CAMEL framework analysis

PurposeThis paper investigates the financial strength of banks in Bangladesh and factors affecting the financial strength over the years 2010–2015 on 35 banks.Design/methodology/approachAdditive value function with CAMEL rating (capital stength, asset quality, managerial efficiency, earning ability, liquidity) has been employed to calculate banks’ financial strength index (FSI). In the second stage, panel regression has been exercised to find out the determinants of banks’ financial strength.FindingsEmpirical finding exhibits that the Islamic banks of Bangladesh are financially stronger and outperform conventional and Islamic window banks with higher liquidity. In the ownership category, private banks have more financial strength with higher capital strength, asset quality, managerial efficiency and earning ability than public banks. Bank size, loan recovery, salary and banking sector development positively affect whereas the loan-asset negatively affect the bank’s financial strength in Bangladesh.Research limitations/implicationsThis study has its limitations despite its importance. CAMELS is a more improved form than using CAMEL. But because of the data deficiency on “S” which represents sensitivity, it would not be possible to use CAMELS framework. Further researchers could incorporate this.Practical implicationsGovernment and banks should allow Islamic banks to enter the market on easy terms because of their outstanding performance in the existing market. In addition, banks should provide loans with consideration so that they cannot create credit risk. In addition, they should calculate composite financial strength annually to understand which components they need to work on.Originality/valueThis study extends the extant result on the composite FSI. It is hard to examine the financial strength of banks using only ratio value, which misleads most of the time. The study offers evidence on how the FSI provides more rigorous results and what are the factors contribute most to the financial strength of banks.

SHARI’AH COMPLIANCE ISSUES IN THE PRACTICES OF MURABAHAH FINANCING PRODUCTS OFFERED BY BANKING INSTITUTIONS IN TANZANIA

Islamic banking industry in Tanzania began in 2008. Currently, it has several banking institutions with Islamic banking windows and one full-fledged Islamic bank. In this industry, Murabahah has been used in most of the financing products. Therefore, this paper discusses and analyses the Shari’ah compliant issues in the practices of Murabahah financing products offered by banking institutions in Tanzania and proposes the ways forward. The findings of this paper revealed that there are several Shari’ah problems such as charging of application fees, use of conventional insurance, uncertainty of agency contract and ownership of the commodity for sale. This happens due to absence of Islamic banking legal and regulatory framework, weaknesses in the banking institutions, and commitment of the people. The methodology adopted in this paper is based on qualitative and descriptive approaches, review, and analysis of authoritative and non-authoritative legal and Shari’ah sources, as well as observations. The study recommends for the establishment of Islamic banking legal and regulatory framework, adoption of guidelines for Murabahah financing, and enhancement of the Shari’ah Boards performance. Moreover, knowledge on the essence of Shari’ah compliance should be disseminated to the people, and Tawarruq Commodity Murabahah financing to meet the need for cash money should be introduced.

DO ISLAMIC BANKS IN INDONESIA TAKE EXCESSIVE RISK IN THEIR FINANCING ACTIVITIES?

This study analyzes the risk-taking behavior of Indonesian Islamic Banks by examining whether the relation between financing Growth rate and non-performing financing (NPF). We employ threshold regression models and bank-level data of 24 Islamic banks (full-fledged Islamic banks and Islamic banking windows) covering the period from 2009 to 2019. We find evidence for the excessive risk-taking of Islamic Banks. More specifically, while the relation between NPF and FGR is negative when the one-lagged NPF is below the threshold (estimated to be 5.42%), it turns positive once it is above the threshold. This means that banks with NPF above the 5.42 percent threshold tend to take risky loans.

Unit Usaha Syariah pada Perbankan Syariah: Tinjauan Pustaka dengan Bibliometrik

Islamic Banking Window have a good level of comparison and contribute to government policies in changing from Islamic business units to Islamic commercial banks. This study aims to find out which countries and their relationships with publications can be used as benchmarks for future research and present the findings of the most authored articles and provide direction for future research with the theme of Islamic Banking Window. This paper quantitatively analyzes the literature on Islamic Banking Window, as represented by English-language 60 articles from the Scopus database with a time span from 2008 to 2021. Using a bibliometric approach plus content analysis. We find that Malaysia is the most relevant country, Universiti Kebangsaan Malaysia (UKM) the most relevant institution and the International Journal of Islamic and Middle Eastern Finance and Management and Journal of Islamic Accounting and Business Research the most relevant journal. There are two main topics: (1) general studies on the Islamic banking window and (2) practical implications. We also offer future research directions.

Corporate Social Responsibility Moderates the Nexus between Financial Inclusion and Islamic Financial Stability

This research work checks the influence of the financial inclusion index (FI) and corporate social responsibility index (CSRI) on financial stability, profitability, and return on equity of the Islamic banks of Pakistan. Further, research works to check whether the corporate social responsibility index plays a moderating role in the association between the financial inclusion and financial stability of Islamic banks and windows of Islamic conventional banks of Pakistan. The corporate social responsibility index was measured through the contribution of social activity to society. Financial inclusion was measured through financial access to the entire society without any discrimination against society. In this paper, samples of the Islamic banks including the Islamic window of the conventional banks for 2005 to 2020 are investigated. Further, the data is selected of the variables from the financial statement and balance sheet of the banks. The fixed effects and generalized moments of the method are employed to check the affiliation between the FI and CSR on the stability and profitability of Islamic banks. The generalized moment of method (GMM) has been employed on the panel data set to control the endogeneity from the model. The empirical results of this research study have the following conclusion: Firstly, FI has a constructive and significant impact on the financial stability and profitability of the banks. Secondly, corporate social responsibility has a positive and significant impact on stability and profitability. Finally, the interaction term corporate social responsibility has a positive and significantly moderating effect on the relationship with the financial inclusion on the stability (FS) and profitability on the Islamic banks.

Full-Fledged VS Islamic Bank Windows: Which One Do Muslim Consumers Know Better and Prefer More?

<p>The study aims to compare the knowledge of and preference for the Islamic banking window and the full-fledged Islamic bank among Muslim customers. Data were collected from 1171 banking clients. Data were analyzed using descriptive analysis. The results show most Muslim customers do not know the difference between the full-fledged Islamic bank and the Islamic banking window. Yet, most Muslim customers favor the full-fledged Islamic bank to the Islamic windows since it is perceived to be more sharia compliant. Thus, the study theoretically contributes to Muslim banking behavior literature by providing empirical evidence on customer knowledge and preference in choosing an Islamic bank. Besides, the study provides knowledge to both the Islamic bank windows and full-fledged Islamic bank on the Muslim customers' understanding of both channels' availability.</p>