Development Of Islamic Banking Industry Research Articles

The Influence of Competency towards the Performance of Islamic Banking Industry in Malaysia

The purpose of this study is to explore the influence of competency which comprises of technical and behavioral competency among the employees of Islamic banking towards the performance improvement of Islamic banking industry in Malaysia. The study needed to be conducted due to the unfavorable achievement of Islamic banking industry after three decades of its establishment. Islamic banking needs to be more aggressive in providing competent human capital in line with the development of Islamic banking industry. The study related to the Islamic banking has been widely conducted but the use of McClelland and Spencer & Spencer theories to examine the effect of technical and behavioral competency towards the performance improvement of Islamic banking industry in Malaysia is still limited. Therefore, the first objective of the study is to determine the influence of technical competency among the Islamic banking employees towards the performance improvement of Islamic banking industry in Malaysia. The second objective is to find out the influence of behavioral competency among the Islamic banking employees towards the performance improvement of Islamic banking industry in Malaysia. Quantitative approaches through self-administered questionnaire were adopted and analyzed by using SEM-PLS. The total number of respondents is 370, where cluster and random sampling is used to select the respondents from each branch of Islamic banks in Malaysia. The results showed that both variables technical competency (β = 0.317, t = 4.484 p < 0.05), and behavioral competency (β = 0.294, t = 3.594 p < 0.05) were significantly influencing the improvement Islamic banking industry performance. Finally, this study has significant implications to the relevant parties to provide competent and highly performance human capital to the Islamic banking industry in Malaysia. The recruitment should not merely base on the experience and educational level but also taking into highly consideration positive personal attributes, attitudes and values. This is because the career in Islamic banking is not merely a career but a responsibility and sincerity which both are required in every aspect of the working environment.

PERAN DEWAN PENGAWAS SYARIAH DALAM PEMENUHAN PRINSIP SYARIAH DALAM PELAKSANAAN GOOD CORPORATE GOVERNANCE PADA PERBANKAN SYARIAH

This research is departing from the development of Islamic banking industry, which is growing rapidly. Moreover, the bank demanded to implement good corporate governance (GCG) in order to prevent any risk of islamic banking losses, both financial loss and reputation risk. The implementation of GCG in islamic banking industry have to meet the shariah compiance. Thus, to ensure the shariah compliance, it requires shariah supervisiory board (DPS), which it serves to maintain the bank‟s adherence to islamic principles in their activities to manage customer funds. The regulation of Bank of Indonesia no. 11/33/PBI/2009 on the implementation of GCG in islamic banks provide a comprehensive policy regarding the duties and the responsibilities of the DPS to ensure the fulfillment of islamic principles in implementation of good corporate governance in islamic banking.Keywords: Good corporate governance, Islamic Banking, Shariah Supervisiory Board, Shariah Principles, Regulation of Bank of Indonesia

Optimization the Role of Shariah Supervisory Board for Shariah Governance in Islamic Banking

Many studies show that one of the biggest challenges in Islamic banking is related to lack of proper and effective Shariah governance. By focusing on the role of Shariah Supervisory Board (SSB), this paper attempts to extract some keys on how to achieve better performance and development of Islamic banking industry by reviewing previous studies. This study was done by using literature review approach. This study concludes that increasing the size of SSB, improving higher skills and competences of SSB members, keeping the independency of SSB member as well as the need of Central Shariah Board (CSB) and shariah auditor would affect to better performance of Islamic banking.

PELATIHAN EKONOMI SYARIAH BAGI GURU SMK SEBAGAI INISIASI PEMBUKAAN PROGRAM STUDI PERBANKAN SYARIAH

The development of Islamic banking industry is rapid. Data from Indonesian Bank shows the growth of asset annually (YoY) are 33.49%. This rapid growth brings the consequences of increasingly needed of Human Resources who understand the concept, practical and operationalization of Islamic bank. Nevertheless, the results of Indonesian's Bank research showing that there are 90% of Islamic bank employees do not has Islamic economic background. To meet the needs of this human resources, some vocational high schools (Sekolah Menengah Kejuruan) already has expertise program in Islamic bank. However, the Collage of Education in Indonesia does not yet has a department of Islamic Economic Education or a similar study program that produces a teacher of Islamic bank. Synergy between collage and teachers is needed to increase the teachers competence in teaching in Islamic Bank. This community service program done to improve understanding of teachers by conducting training in Demak District. Training materials related to the concept of Islamic economy, operationalization of Islamic banks and accounting. Based on data using a different test T-Test yielded a significance value are 0.000. This result that this training provides benefits of improving teachers' understanding of Islamic economy.

Spin-off policy and efficiency in the Indonesian Islamic banking industry

Indonesian Islamic Banking Act requires conventional banks to spin-off their Islamic business units if they had fulfilled the spin-off criteria. Some of the Islamic business units had done the spin-off process although they are not fulfilling the spin-off criteria. The data showed that there is an efficiency decline after the spun-off. This study is going to examine the spin-off’s impact on the efficiency in spin-off banks. The method used in this paper is a difference-in-differences analysis. The sample used is four spin’s banks as treatment objects and two Islamic full-pledge banks as control objects. This research shows that there is an impact of spin-off policy on the efficiency in spin-off banks. There is an efficiency decrease in spin-off banks after the activities. It implies that the spin-off policy is not the only strategy that can be implemented. The policy-makers can choose other strategies to enhance the development of Islamic banking industry.

Efficiency versus Maqashid Sharia Index: an Application on Indonesian Islamic Bank

The Development of Islamic Banking Industry in Indonesia relatively shows a good tendency. In the market, inefficiency would be the great obstacles in head to head to conventional bank. Despite of efficiency performance in Islamic Bank, Islamic Bank also must have sharia compliance performance. So it needed to identified the efficiency of Islamic Bank in Indonesia and the achievement of Maslahah in term of three aspects, there are education, the creating of justice, and the attainment of welfare. This study would try to measure the efficiency of Islamic Banking Industry with Data Envelopment Analysis (DEA) method and also to evaluate the performance by using Maqasid Sharia Index (MSI). Banxia Frontier Analyst 3.1 used in the data calculation. The calculation of the level of Islamic Bank efficiency in this study are relative, not absolute. Result of this study indicate four main findings, first, Islamic bank involve in quadran 1 is Islamic bank who reached the highest efficiency and the best performance; there are BMI and Bank Panin Sharia. Islamic bank involve in quadran 2 is Islamic bank who reached the highest efficiency and the lowest performance, there are BSM, Maybank Sharia, and Bank Sharia Bukopin. Islamic bank involve in quadran 3 is Islamic bank who reached the lowest efficiency and have a good performance, there are BRI sharia, and BCA sharia. Islamic bank involve in quadran 4 is Islamic bank who reached the lowest efficiency and the lowest performance, there are Bank Mega Sharia, Victoria Sharia, BNI Sharia, and BJB Sharia.Keywords: Maqasid Index, Efficiency, DEA, Efficiency-Maqasid Quadrant (EMQ)

Spin-off and market share in the Indonesian Islamic banking industry: a difference in difference analysis

Abstract According to The Act No. 21 of 2008 concerning Islamic Banking in Indonesia, the conventional banks are obligated to spun-off their Islamic business units after achieving a certain set of requirements. The spin-off requirements are: (i) reach 50% market share asset of its parents; or (ii) 15 years after the implementation of the Islamic Banking Act. This study emphasizes the impact of Islamic banks' spin-off on market share. The method used in this study is a difference in difference analysis. This technique is a quasi-experiment separate into two groups, such as the treatment groups (four spin-offs' banks) and control group (two fullfledged Islamic banks). This study used quarterly data from 2005 until 2016. The results show that, first, there is a difference in the Islamic banks' market share between pre- and post-spinoff. Second, there is a difference in the market share of spin-offs' banks between pre- and postspin- off. Third, there are there external factors that can affect the Islamic banks' market share, i.e., inflation rate, interest rate, and economic growth rate. The paper is a useful source of information that may provide relevant guidelines in helping the future development of spin-off activity in Islamic banking industry. The finding could be helpful for policymakers to create a supporting strategy to accelerate the development of Islamic banking industry. This result also could be of use for Islamic banking industries in other countries.

THE EMERGENCE OF ISLAMIC BANKING: Development, Trends, and Challenges

Islamic banks have emerged over the last four decades and witnessed remarkable growth in terms of numbers of new Islamic banks being established all over the world.This expansion is paralleled to an equal high growth in Islamic banking education.There exist various colleges and universities offering courses related to Islamic banking and finance.This paper maps the growth and development of Islamic banking industry from 1963 to the 21st century both in terms of education, trend and challenges.This study could provide a systematic documentation of the rapid growth in the Islamic banking industry and able to attract new participants.However, the rapid development in the global financial markets poses various challenges to Islamic banking in the present era. These issues and challenges need to be addressed very carefully in order to sustain the rapid growth it experienced before.This paper highlights the various developments, issues and challenges confronting the Islamic banking to offer recommendations for further improvement.

ISLAMIC CORPORATE IDENTITY IN THE PRACTICE OF ANNUAL REPORT DISCLOSURE ISLAMIC BANK

<span>The development of Islamic banking is directed to provide great benefit to society and contribute optimally to the national economy. Islamic banking system and conventional banking system together synergistically supports the mobilization of public funds broadly improve the ability of finance to sectors of national economy. Together with the development of Islamic banking industry in Indonesia, there are many controversies from the community, where most problems highlighted are sticking the label of syariah in Islamic financial institutions are still considered not feasible. Based to these problems, researchers want to conduct this research on the suitability of the annual report disclosure practices of Islamic banks in Indonesia to the reporting standards that reflect the ideal of Islamic Corporate Identity.This study using a checklist for the data analysis consisting of the five themes and the eight dimensions that are should be disclosed in annual reports of Islamic banks. From the results of the assessment aspect of the checklist is then poured in the index EII (ethical identity index). From the calculation of EII, it can be seen that the annual report disclosure practices syariah banks for 2007, 2008, and 2009, has approached the ideal reporting standards that reflect the Islamic Corporate Identity.</span>

ANALISIS INDUSTRI PERBANKAN SYARIAH DI INDONESIA

The current development of Islamic banking industry in Indonesia is rapidly growing. This article analyzes the Islamic banking industry in Indonesia using Porter’s five-forces competitive industry approach. Each of the power industry are discussed. The conclusion indentifies Islamic banking industry conditions that need to be considered.