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.

UNIT KEPATUHAN DAN AUDIT INTERNAL BANK SYARIAH DI INDONESIA; SUDAHKAH SESUAI DENGAN PRINSIP SHARIAH GOVERNANCE?

Shariah governance is crucial in the Islamic banking system to ensure that all commercial operations comply with Islamic principles and differentiate Islamic banking operations from conventional banking. This research discusses the similarities between the practice of the compliance unit and internal audit of Islamic banks in Indonesia and Bank Indonesia/ OJK’s regulations and existing standards. The data for the research were collected through interviews and documentation instrument, and analyzed by using qualitative methods. Based on the analysis, the researcher identified that the work practices of the compliance unit and internal audit of Islamic banks in Indonesia are in line with regulations promoted by Bank Indonesia/ OJK, AAOIFI and IFSB shariah governance, but are still not comprehensive when compared to the Shariah governance framework of Bank Negara Malaysia and the opinions of other practitioners of Islamic Economics.

EMERGENCE OF FINANCIAL TECHNOLOGY IN ISLAMIC BANKING INDUSTRY AND ITS INFLUENCE ON BANK PERFORMANCE IN COVID-19 SCENARIO: A CASE OF DEVELOPING ECONOMY

Technological intervention and financial innovation are an essential element for the banking sector especially in post-Covid 19 scenario. Islamic banking industry has also no exception and Islamic banks could attain institutional objectives over financial technology. The motivation behind research is to investigate emergence of financial technology in Islamic Banking Industry and its Influence on Bank Performance. The population of the study consists of Islamic banks and windows of Islamic banks operating in Pakistan. The sample size consists of four Islamic banks, five Islamic windows of conventional banks, and State bank of Pakistan. Purposive sampling technique was used by researcher. Semi-structured interviews were conducted and NVIVO software was used for data analysis. Findings indicate that technologies used by different banks to serve the customer are blockchain, mobile banking, customer relations management, cyber security, cloud banking, and fintech start-up. Reaction and response of the Islamic finance industry to the rise of financial technology and its impact on Pakistan is obvious.

PANDEMI COVID-19 IMPLIKASI BAGI PEMBIAYAAN BANK SYARIAH DI INDONESIA

The Covid-19 pandemic is the result of the spread of coronavirus that occurs almost all over the world. In Indonesia, covid-19 first occurred on 02 March 2020. At that time, Indonesian citizen was infected by one of the Foreign Nationals of Japan. The transmission of covid-19 is increasing for a long time, until now covid-19 has spread in almost all 34 provinces in Indonesia. Health problems that further adversely affect almost all sectors of the industry, one of which is the Islamic banking industry. Therefore, the Financial Services Authority (OJK) issued several stimulus policies as a measure of anticipation of customers defaulting. This research is a descriptive study with the aim to determine the impact of pandemic covid-19 on Sharia bank financing in Indonesia. The samples used in this study were 11 Sharia commercial banks. The results showed that there are 8 Sharia commercial banks experiencing a downward trend in breeding, especially in April 2020. It can be concluded that the impact of covid-19 has a decrease in Sharia banking financing. Policies carried out by each Sharia commercial bank related to the anticipation of covid-19 to its financing activities, each bank implements a financing restructuring policy to debtors affected by the spread of covid-19

The Effect of Profit Sharing Financing and Receivables towards Total Assets in Islamic Banking: Case Study in BNI Syariah

The objective of my research is to observe at the relationship between receivables, profit-sharing financing to total assets at BNI Syariah Bank from 2016-2020. Total assets in BNI Syariah frequently endure fluctuations in total assets each year, whether receivables and profit-sharing financing have a significant effect on variable Y (total assets). The method that researchers run is a quantitative method using the help of SPPS software, while the variables that influence are the dependent variable receivables and profit-sharing financing. The funding channelled by BNI Syariah is essentially the same as other Islamic banks in Indonesia. Because it still uses an agreement that has long practised in the Islamic banking system, such as the Murabaha contract for the provision of receivables, Mudharabah and Musyarakah contracts for profit sharing between customers and banks. The relationship between Receivables and Revenue Sharing Financing has a positive correlation between variables. This research can also provide some connection between Murabahah and Musharaka which are one of the main product sources of BNI Syariah bank. The originality of the research that the researcher makes is his own, it is not copied and that the researcher's research idea is new and can add new knowledge.

Shari’ah Governance of Islamic Non-Banking Financial Institutions in Malaysia: A Conceptual Review

It is widely recognized that Malaysia is among the leading countries in the Islamic banking industry. This is due to its comprehensive regulatory framework from the Shari’ah aspects, particularly Shari’ah governance. Bank Negara Malaysia (BNM), as the regulator, is closely monitoring all players in this industry so that they can follow all its policies and regulations closely. Nevertheless, the Islamic Non-Banking Institutions (NBFIs), seem to be contrary in this aspect. In fact, it is not compulsory for the NBFIs to adhere to the BNM’s policies, particularly regarding the Shari’ah governance framework. Therefore, this study aims to explore Shari’ah governance practices among selected Islamic NBFIs in Malaysia. Since this study is a conceptual review, it adopts library research to achieve its objective. The finding reveals that there are different practices of Shari’ah governance among the Islamic NBFIs due to different sizes of their institutions and the complexity of their products. While the flexibility may bring benefits for the NBFIs, their respective regulators should enhance the Shari’ah governance aspects by providing a comprehensive policy as well as improving its enforcement particularly from the check and balance perspective. Also, the study suggests that the Islamic NBFIs should establish an association among its members to promote coordination, strengthen the governance, and exchange views, particularly on Shari’ah aspects.

Dispute Resolution for Islamic Banks in Indonesia

The rapid growth of Islamic banking and finance industry demanded an improvement in term of standards, frameworks, policy, technologies, resources, and guidelines in order to go beyond without compromising the core values of Islam itself. In the context of legal framework of Islamic banking and finance, it is most likely this industry needs to be highly regulated in order to avoid manipulation and abuse by the irresponsible parties. One of the crucial issue in the area of Islamic Banks in Indonesia is regarding about the dispute resolution mechanism for Islamic Banks. Based on Indonesian positive law, there are two alternative dispute resolution mechanisms that can be exercised by parties to settle disputes in cases involving Islamic Financial Institutions (IFIs) namely through litigation or non-litigation. Litigation comes under the jurisdiction of the Religious Court. Researcher in this study are look deeper into the dispute resolution mechanism for Islamic Banks in Indonesia, as well as going through some decided cases. And based on the study done, it was found that alternative dispute resolution mechanism is more effective to resolve Islamic Banks dispute rather than litigation. In the future, researchers may conduct more research to examine deeper about the dispute resolution mechanism for the whole Islamic Economics and Finance in Indonesia. Moreover, researchers need to look at the regulators' and legislators’ perception towards dispute resolution and legal environment.

Islamic banking sustainability: theory and evidence using a novel quadruple bottom line framework

PurposeThe study aims to extend the conventional triple bottom line (TBL) framework (prosperity, people and planet) to the quadruple bottom line (QBL) by newly adding a “prophet” dimension for Islamic banks seeking compliance with Islamic law in their pursuit of sustainability.Design/methodology/approachEmploy Chapra's corollaries of maqasid al-shari'ah (the goals of Islamic law) to develop constructs for a survey of 504 Islamic bank stakeholders from five Indonesian provinces to gather primary data to quantitatively verify the dimensions and items in the proposed QBL framework. Categorical principal component analysis (CATPCA) then identifies the sustainability of ten Islamic banks from ten countries as a trial application of the resulting QBL index.FindingsUsing the dimensions and items identified using CATPCA, the authors develop a QBL index to assess the sustainability of the ten Islamic banks. The findings suggest that half of the banks are sufficiently sustainable, with three being proactive (doing more than is required) and two being accommodative (doing all that is required). The remaining five banks are unsustainable, with two banks being defensive (doing the least that is required) and three being reactive (doing less than is required). Most of the banks perform relatively poorly according to the “planet” (38%) and “people” (41%) dimensions and perform better on the “prosperity” (53%) and “prophet” (63%) dimensions. Nonetheless, there is ample room for improvement across all dimensions of sustainability.Research limitations/implicationsThe generalizability of the findings is limited by the small-scale single-country survey used in the CATPCA part of the analysis. Only ten Islamic banks were included in the QBL scoring and ranking exercisesPractical implicationsIslamic banks can improve their sustainability by increasing green financing and reaching out to rural areas and disadvantaged populations. In countries with Islamic banking systems, regulators can support this through training, guidance and incentives.Originality/valuePioneering exploration of TBL from maqasid al-shari'ah perspective. First, we develop a QBL index to assess the sustainability of Islamic banks in line with actual stakeholder expectations.

Legal Protection of Islamic Banks, Challenges and Solutions

The Islamic banking industry is an important part of the financial system in any country that has this type of banking. Islamic banking institutions are regulated by several laws and regulations as same as conventional banks. The Islamic banking Act and general banking law, financial laws, and other related laws are the main piece of law for organizing the Islamic banking system. One of the main challenges that facing Islamic banking institutions is the lack of a legal framework to protect Islamic banking and manage these banks. The legal framework of the Islamic banking industry includes special Islamic banking law and other laws that have relation to Islamic banks such as finance law and company law. The two main legal challenges of Islamic banking institutions is lack of legal framework and lack of Sharia court to deal with disputes and issues relating to Islamic banking cases. thus, it is necessary for Islamic banking institutions to have special Islamic banking law and provisions in other law that they regulate Islamic banking institutions. Therefore, enacting Islamic banking law and amending some other laws to include the Islamic banking industry is needed. Furthermore, establishing a Sharia court to settle Islamic banking cases when there are disputes. Alternatively, appointing Shariah experts and professionals in Islamic banking issues in civil court can be an alternative solution for dealing with Islamic banking cases. Purpose of The Paper: The purpose of this study is to find out the legal challenges that face Islamic banks, and then find proper solutions for these challenges. Methodology and Approach: The qualitative method-based is applied for this study as qualitative research is a proper method for conducting this type of research. The study uses various documents and content analysis approach to understand and analyse the nature of legal challenges of Islamic banking institutions. In this paper, both primary and secondary materials are part of the data collection. Thus, Acts, books, academic journals are used for collecting data for the purpose of this research. Findings: It is found that the current legal framework of the Islamic banking industry needs to be reformed to be a proper legal framework. Therefore, related laws and regulations to Islamic banks should be amended to cover Islamic banking institutions. In addition. Islamic banking Act is necessary to be enacted for regulation Islamic banks. Furthermore, establishing a Sharia court or appointing qualified Shariah scholars in civil court is necessary for resolving legal challenges that face Islamic banking institutions. Keywords: Islamic Banking, Legal Issues, Shariah Court, Civil Court DOI: 10.7176/JLPG/107-10 Publication date: March 31 st 2021

MARK-UP VS. INTEREST-BASED FINANCING ON GDP: AN APPLICATION OF AGENT-BASED COMPUTATIONAL MODEL

This study aims to introduce the application of artificial intelligence in the area of Islamic finance by examining the dynamic changes of gross domestic product (GDP) under fully markup-based financing. The application of artificial intelligence using agent-based computational model (ABM) is employed to conduct the simulation. The simulation result shows that the movement of GDP under markup-based financing which represents Islamic financial system has better performance compared to interest-based lending. In this regard, profit shared to depositors has positive impact on GDP which also proofs that Islamic banking system may promote sustainable economic growth and may create wealth for the whole society. This study proofs that Islamic bank essentially more stable than conventional bank and hence may fights against crisis. This study is potentially the initial work to examine the dynamic changes of economic growth under fully Islamic financial system by applying artificial intelligence concept as its methodology. Thus, this study is expected to contribute to the development of Islamic economics and finance research.

AN ALTERNATIVE CREDIT GUARANTEE SCHEME FOR FINANCING MSEs IN ISLAMIC BANKING

The objective of this paper is to propose a model for a financing guarantee scheme (FGS) funded by the voluntary sector (through zakat, infaq, and sadaqah, or ZIS funds) to support small and medium-sized enterprises (SMEs). We argue that the existing credit guarantee scheme (CGS) relies on government funding, but that in the current Covid-19 pandemic it is experiencing unstable financial capability. Hence, the sustainability of the CGS program is questionable. We employ the input-output (I-O) approach to identify the expected impact if the proposed FGS is applied. We further substantiate the proposal with seven Indonesian Syariah experts’ opinions, of whom five suggest that the alternative scheme is acceptable. The simulation using I-O shows that if IDR1 trillion (out of IDR10 trillion from ZIS funds in 2019) is disbursed through the scheme, this will increase economic growth by 0.0117%, representing economic activities worth IDR1.235 trillion, and creating 2,151 new jobs. We further discuss the implications of the findings for the Islamic banking industry in the future and for regulators.

IMPACT OF ISLAMIC BANKING INCLUSION ON SME EMPLOYMENT GROWTH IN NIGERIA

Despite the considerable resources devoted to SMEs by Islamic banks worldwide, and Nigeria in particular, there has been no rigorous empirical evidence regarding the effectiveness of Islamic banking inclusion on employment growth in SMEs globally. This study fills this gap by analysing the effectiveness of access to Islamic banking financing in promoting MSME's growth in Kano Metropolis, Nigeria. We focus on the impact of the credit lines facilitated by Jaiz Bank Plc in fostering firms’ growth measured in terms of employment. A survey based on a quasi- experimental approach was employed and the data were collected by means of a questionnaire distributed to a sample of 385 MSMEs' beneficiaries and non-beneficiaries of Islamic bank financing in Kano Metropolis, Nigeria. Using difference-in-difference and propensity score matching techniques to deal with selection bias, the study found significant positive effects on MSMEs’ employment growth. In addition, the paper highlights the important role of Islamic bank financing in mitigating the unemployment crisis in Nigeria. The paper recommends that improvement of the Islamic banking system by employing PLS financing, especially Musharaka, could foster MSMEs' financial inclusion and job creation.

Regulatory Arrangement for SharÊÑah Governance Practice of Islamic Banking Institutions in Pakistan: Issues and Challenges

Shariah governance practice is a vital component of the organizational arrangement of IBIs through which the business affairs of IBIs are examined, certified and monitored. It plays a crucial role to legitimize the business of IBIs. In Pakistan, SBP regulates the practice of Shariah governance through a dedicated department with the aid of its SAC and executes it through Shariah boards of IBIs. Applying descriptive analytical approach, the study has described the current state of Shariah governance practice of IBIs. It is the outcome of the regulatory arrangements in the form of regulatory guidelines, directives, standards and frameworks which have been issued during the last two decades by SBP to standardize the practice of Shariah governance for IBIs in Pakistan. The study highlights the formation of the regulatory arrangement which not only depicts the role of SBP, but it also illustrates the functions of SAC and the responsibilities of Shariah boards at IBIs. The study also attempts to confine the regulatory, advisory and supervisory roles of the SBP, the SAC and the Shariah board of IBIs respectively. An analytical review of the roles of these bodies which are defined through the regulatory arrangements facilitates to discover the loopholes in the current regulatory arrangement for Shariah governance of IBIs. Although, attempts have been made to address the issues in this regard by some writers but in case of Pakistan, the issues are yet to be identified. The study has found that the regulatory arrangement of Shariah governance practice has been constituted significantly by the SBP. However, composition, affiliation and independence of Shariah bodies at central bank and the institutional level are the aspects which pose regulatory issues in the current arrangement. Therefore, the study has discovered some possible solutions for these issues and proposes them for regulatory enhancements. It suggests that the SBP as central regulatory authority should specify regulations over the composition of SAC at SBP level to augment the regulatory and advisory process for Shariah governance practice of IBIs. It recommends that the number of the members at SAC as well as at the Shariah boards of IBIs should be maximized. The two bodies should have additional qualified members especially the number of Shariah qualified members need to be increased. It also proposes that the nomenclature of each body should be defined separately because referring with various names for each body or using their names interchangeably could cause confusion. In addition, the members of SAC and the institutional Shariah boards should be barred from having multiple Shariah boards affiliations through specific regulations. It also recommends that the Shariah boards member must play their supervisory roles independently without any undue influence from the executives. So, a specific set of regulations is required which could guarantee the independence of Shariah boards of IBIs. The proposed recommendations of the study will not only facilitate the regulatory authority to revisit its arrangement and include conclusive measures, but they will also assist the industry to enhance the productivity of their Shariah board members. It will also assist the industry to establish an environment where contribution of the Shariah qualified members and their effective role would strengthen the marketability and credibility of the Shariah governance practice in the Islamic banking industry. Ultimately, a balanced, conclusive and enhanced regulatory arrangement for Shariah governance practice of IBIs would standardize the practice of Shariah governance at the domestic level as well as it could be harmonized with the international best practices of the Islamic banking industry.

Ranking methodology for Islamic banking sectors – modification of the conventional CAMELS method

The state of banking systems is an important issue. The purpose of this paper was to test whether the well-known CAMELS microeconomic methodology, generally used for ranking banks, is applicable to evaluating Islamic banking systems. The hypothesis was tested by implementing a method for a particular case, public, free data – from 2013 till the first quarter of 2018 – on Islamic banking systems from the “Islamic Financial Services Board” (IFBS) database. As expected, modifications were necessary. First, because of the lack of data (in Islamic databases, no data refer to the management (“M”)), and second, to avoid the subjectivity of the five-degree method and to reach more sensibility. Thus, a hundred-level (standardized) rating system was introduced – “CAELS 100”, where “100” refers to the levels. The other part of the methodology – creating a simple average of the (now level 100) rating of raw indicators to get the letters of CA(M)ELS in the relevant period – remained unchanged. After the data cleaning, only six countries (Bahrain, Egypt, Kuwait, Oman, Turkey, and the United Arab Emirates) were able to participate in the analysis.The result showed that Egypt, Turkey and Kuwait were the best ones respectively. Thus, it was concluded that this “CAELS 100” methodology is suitable for evaluating Islamic banking systems. AcknowledgmentThe research was supported by the project “Intelligent specialization program at Kaposvár University”, No. EFOP-3.6.1-16-2016-00007.

Determinants of Islamic banking products and services adoption in Morocco: a conceptual framework

PurposeThe Moroccan monetary authorities have implemented an Islamic banking system since 2017 as an alternative to the conventional system. However, the adoption of Islamic banking products and services is not widely accepted by customers. The purpose of this study is to propose a conceptual framework to understand the determinants of Islamic banking products and services adoption in Morocco.Design/methodology/approachThis study develops a conceptual framework based on the diffusion of innovation theory (DOI). Thus, with reference to an extensive literature review done regarding adoption studies, the proposed research model integrates perceived attributes of innovation (relative advantage, compatibility, complexity and observability) suggested by the DOI theory. It also integrates other relevant variables that should be considered in the context of this study. These include knowledge, perceived risk and customer involvement.FindingsThe proposed conceptual framework demonstrates and justifies the relevance and the applicability of Rogers’ DOI to understand consumer decisions to adopt an innovation in general as well as Islamic banks in particular.Originality/valueSeveral studies have examined the factors influencing the adoption of Islamic banks; however, those carried out in the Moroccan context remain very limited. The majority of these studies examine the intention to adopt in the future, whereas the present study seeks to establish a conceptual research model that examines the determinants of current adoption of Islamic banking in Morocco and the continuity of this adoption over time. The novelty of this study is to develop a modified model based on DOI theory which, according to the existing literature, has not yet been tested in the Moroccan context.

Corporate Governance, Risk-taking and Efficiency of Islamic Banks: Comparative Study Between Pakistan and Malaysia

Purpose: This study aims to compare the governance, risk-taking, and efficiency of pure Islamic Banks between Pakistan and Malaysia. Design: Total 9 years of data from 2009 to 2017 used for analysis. Data Envelopment Analysis (DEA) has been used for the measurement of Islamic bank's efficiency. Efficiency has been measured by (Technical Efficiency, Pure Technical Efficiency, and Scale Efficiency). Z-score has been used to measure risk-taking. Results: This comparative study shows that Shariah Supervisory Board has a significant impact only on Malaysian Islamic Banks with technical, pure technical, and scale efficiency. At the same time, board independence has a meaningful relationship with the efficiency of IBs of both countries. Board meetings significantly impact Pakistani Banks' pure technical efficiency while it substantially affects Malaysian banks' technical efficiency. Results also show that risk-taking has a significant negative impact on the efficiency of both countries. Implications: Pakistani Islamic banks should focus more on Shariah Supervisory Boards to develop the Islamic Banking system in Pakistan because it significantly impacts the Efficiency of Malaysian IBs.

Does the deposit structure affect Islamic bank’s maturity transformation activities? The implications of IFSB liquidity guidelines

Purpose The purpose of this study is to investigate factors influencing the net stable funding ratio (NSFR) in the Islamic banking system. More specifically, the authors analyze the impact of the deposit structure on the liquidity ratio using the two-step generalized method of moments approach during the 2000–2014 period. Design/methodology/approach Based on IFSB-12 and the GN-6, the authors calculated the NSFR for 35 Islamic banks operating in the Middle East and North Africa (MENA) region. Findings The findings of this study show the following: first, ratio of profit-sharing investment accounts have a positive impact on the NSFR, while ratio of non profit-sharing investment accounts increase the maturity transformation risk; second, the results highlight that asset risk, bank capital and the business cycle have a positive impact on the liquidity ratio, while the returns on assets, bank size and market concentration have a negative impact; and third, these results support the IFSB’s efforts in developing guidelines for modifying the NSFR to enhance the liquidity risk management of institutions offering Islamic financial services. Research limitations/implications The most prominent limitation of this research is the availability of data. Practical implications These results will be useful for authorities and policy makers seeking to clarify the implications of adopting the liquidity requirement for banking behavior. Originality/value This study contributes to the knowledge in this area by improving our understanding of liquidity risk management during liquidity stress periods. It analyzes the modified NSFR that was adopted by the IFSB. Besides, this study fills a gap in the literature. Previous studies have used the conventional ratios to determinate the main factors of the maturity transformation risk in a full-fledged Islamic bank based on an early version of NSFR. Finally, most studies focus on the NSFR as proposed by the Basel Committee, whereas the authors investigate the case of the dual-banking system in the emerging economies of seven Arab countries in the MENA region.

Islamic Banking, A Potential Banking System for India

Islamic banking is one of the fastest developing banking systems in the financial sector, with vast opportunities worldwide. Islamic banking operates by focussing on complete transparency, ethical investment avenues, co-operative businesses, risk sharing that attract not only the followers of Islam but people from other faiths also. Considering the growth Internationally–Islamic banking has become one of the fastest-growing segments in the International markets as well as Capital markets. With around 195 million Muslims approximately, India’s Muslim population is about the world’s third-largest and the world’s largest Muslim-minority population. India is home to 10.3% of the world’s Muslim population. Islamic banking system operates strictly by the Shariah laws which prohibit collection or payment of Interest, known as “Riba”. The Islamic banking system also prohibits investments in businesses or ventures that are considered Unlawful or Haraam. Risk bearing is one of the most basic principles based on which the Islamic banking system works, which relates to trading rather than risk transfer as in the case of conventional banking. The research papers aim at explaining the services of Islamic banking and various principles of Islamic banking. The research also intends to put forward the benefits and drawbacks of Islamic banking in the Indian context.

Impact of Corporate Social Responsibility on Islamic Banking Customers of Pakistan

This study aims to analyze the impact of corporate social responsibility on trust level of customers in the Islamic banking industry of Pakistan. The impact of trust is further studied on customers’ repurchase intentions and their word of mouth intentions. A self-administered questionnaire was used to collect data from the customers of five different banks offering Islamic banking services in Pakistan. In order to explain the relationship between variables the model was tested using Structural Equation Modeling (SEM) using AMOS. Empirical results from this study show that CSR is positively related to customer trust, repurchase intentions and word of mouth intentions in the Islamic banking industry. The findings prove that hypothesized model fit reasonably well based on comparison fit indices. The study adds valuable insights to CSR related research in South Asia and particularly focuses on the factors that influence perceptions and behaviors of Islamic banking customers.

Legal Perspective on the Supporting Role of Human Resource in the Islamic Banking Industry in Indonesia

The purpose of this study is to search for and find a model for developing human resources competencies based on Islamic values in Islamic banking in Indonesia. The study was a descriptive-analytical study with a normative juridical approach by using library research. The findings in this study are the human resources competency development model based on Islamic values in Islamic banking in Indonesia is to use the concept of professional qualifications and employment in the Islamic banking financial industry with the criteria and concepts of having hard & soft skills competencies, including honest, transparency, trustworthy, and personal development based on worship, faith, science, charity, and missionary endeavor.