Islamic Banks Research Articles

The Influence of it Incident Management and Training on Service Improvement: Does Organizational Dehumanization Have an Impact?

This study aims to identify the positive impact of training and incident management on service recovery performance and the negative impact of organizational dehumanization on service recovery performance. The results showed that training and incident management have a positive effect on service recovery performance. However, the moderation of organizational dehumanization does not have a significant effect on reducing service recovery performance but instead strengthens it. This research provides more understanding that the implementation of banking operations, including Islamic banking, must be carried out with strict regulations, including the affirmation of provisions that can be interpreted as a pattern of organizational dehumanization. However, to strengthen and accelerate the post-incident service recovery process, it must be supported by continuous and quality training.

The Shariah non-compliance (SNC) disclosure index of Islamic banks in Malaysia

Purpose This study aims to examine the Shariah non-compliance (SNC) disclosure index for all 16 Malaysian Islamic banks from 2015 to 2020. Design/methodology/approach A qualitative research methodology was adopted that included content analysis. The data were gathered from banks’ annual reports from 2015 to 2020. To achieve this, firstly, the disclosure index was developed by examining the disclosure requirements of the regulator and previous studies. The index was then used to measure the level of disclosure index for all these banks. Findings The overall average SNC disclosure index for the Islamic banks from 2015 to 2020 remained low at 0.57. However, the values were comprised of mandatory and voluntary items. For the former, the SNC disclosure index was quite high at 0.82, but for the voluntary items, the value was 0.40. Progressive improvement can be observed in the disclosure practices of the majority of the Islamic banks between 2015 and 2020; nevertheless, certain banks displayed a deterioration in their disclosure practices. Research limitations/implications This study has several limitations, including the index used, the research period and the fact that it was restricted to SNC events. Practical implications These findings add value for information users by assuring them of the accountability of Islamic banks in terms of transparency, as well as their effectiveness in managing and mitigating SNC events. Regular monitoring and strong enforcement by the regulator are essential to achieve full compliance with the stipulated requirements. Originality/value This study offers a disclosure index for analysing SNC events in depth by segregating the disclosure into mandatory and voluntary items for each Islamic bank and making recommendations for future research. In addition, it provides a broad overview of current trends in SNC and the associated issues, as well as insights for regulators and the public in terms of the transparency levels of Islamic banks in relation to SNC event disclosure.

ALTERNATIVE PROFIT-SHARING SYSTEM IN THE MUDHARABA SCHEME IN SHARIA BANKING PERSPECTIVE M. BAQIR AL-SADR

The profit-sharing system with a mudharaba scheme is an early concept of Islamic banking. However, mudharaba is starting to be abandoned by customers and sharia banks because it carries high risks. This research will discuss Muhammad Baqir al-Sadr's thoughts on the profit-sharing system in the mudharaba scheme. The method used is descriptive qualitative by taking primary data sources in the form of a book written directly by al-Sadr entitled: Al-Bank al-Laribawi fi al-Islam. This research found several results, namely: (1) the profit-sharing system in al-Sadr's version of the mudharaba scheme is different from the mudharaba concept in general. This research further shows al-Sadr's prominence in the field of sharia economics, because al-Sadr also has an original concept about Islamic banking. (2) This research found that al-Sadr's thoughts have significance for efforts to develop sharia banking in the future, especially regarding strengthening moral values in the relationship between sharia banks and customers. (3) This research further shows al-Sadr's prominence in the field of sharia economics, because al-Sadr also has an original concept about Islamic banking.

Cash holding in Islamic rural banks

Cash holding in Islamic rural banks

The Effect of Third Party Funds, CFO, Debt Ratio on Earning Quality of Islamic Commercial Bank

This study aims to analyze the factors that affect Earnings Quality. This research will offer a new and broader view on the factors that influence the profit quality of Islamic commercial banks in Indonesia. This research use quantitative study that uses multiple regression analysis methods. The data used is panel data from 2019-2022. The factors analyzed for their influence in this study are Third Party Funds, CFO, and DER. The model estimation used is multiple regression analysis with a quantitative descriptive method. The results of the study show that the CFO and DER have an impact on earnings quality, while, third third-party Funds do not affect Earnings Quality. These findings indicates that banks need to pay more attention to managing operating cash flow (CFO) and capital structure (DER) to improve earnings quality. Proper management of these two variables can help banks achieve more stable and transparent financial performance. Although Third Party Funds do not significantly affect earnings quality, their management is still important to maintain the stability of the bank’s liquidity. These results also suggest that investors and other stakeholders may need to focus on CFO and DER as key indicators when assessing a bank’s earnings quality.

Upaya Peningkatan Pembelajaran Berbasis Zakat, Sedekah, dan Infaq Untuk Optimalisasi Aspek Moral, Emosional dan Sosial Terhadap Siswa SDN 105337 Pantai Labu

Learning based on Zakat, Sedekah, and Infaq (ZIS) plays a significant role in shaping students' character, particularly in moral, emotional, and social aspects. This study aims to identify efforts to enhance ZIS learning that can be implemented at SDN 105337 Pantai Labu. The research employs a qualitative approach with interview, observation, and documentation techniques. The results reveal that the implementation of ZIS-based learning not only improves students' understanding of Islamic finance concepts but also positively impacts the development of moral character, such as empathy, social awareness, and collaboration skills. Furthermore, students involved in the ZIS program demonstrate improvements in emotional aspects, including emotional management and self-confidence. This study recommends the integration of ZIS learning into the school curriculum to foster a more caring and responsible generation.

Murabahah contract in subsidized home ownership financing deed by notary in Bogor district

Akad Murabahah is a contract that finances an item by describing its purchase price to the buyer and asking the buyer to pay a higher price according to the agreed profit. The purpose of this research is to know and analyze the role of Notary in making a deed of financing subsidized home ownership and to know and analyze the murabaha contract in the deed of financing subsidized home ownership by notaries in Bogor Regency. This research uses normative legal research methods with the approach of legislation, norms, and doctrine as the main study, but is also supported by empirical approaches such as interviews to complement existing juridical data. The results of the study found that the role of notaries in making deeds of financing subsidized houses with murabaha contracts has not been widely carried out by Islamic banks, notaries in this case public officials who make deeds play more of a role in making ordinary commercial house financing. whereas when houses are subsidized, not many Islamic bank partners use notaries. Currently, the murabahah contract is still the choice of customers in buying houses at Islamic banks, because the margins offered by banks are not large and certain. However, there is a need for a kaffah concept of Islamic law in making deeds, for this reason this research is expected to conceptualize the anatomy of a murabahah contract based on applicable legal principles and Islamic legal values.

Ijara Ending with Ownership (Lease) A Case Study of Jordanian Islamic Banks

Ijara Ending with Ownership (Lease) A Case Study of Jordanian Islamic Banks

Banks’ Performance Amid the Unexpected Crises: An Assessment from Malaysia’s Islamic Banks

Islamic banks play an important role in Malaysia’s financial system by offering various services to individuals, businesses, and governments. Nonetheless, as the world confronted unprecedented crises the Islamic banks faced a new set of tests that would not only define their performance but also underscore their adaptability and durability. This paper aims to evaluate the impact of unexpected crises on the performance of Islamic banks. It also delves into various Islamic bank's key characteristics that might influence the Islamic bank performance such as capital adequacy, bank size, credit risk, and non-interest income. Data spanning from 2000 to 2022 and covering seven (7) Islamic banks are utilized using the panel static method. It reveals that bank characteristics such as capital adequacy, credit risk and non-interest income significantly impact Islamic bank performance. Nonetheless, deposit and bank size do not influence Islamic bank performance. The major highlight of the unexpected crises depicts a negative relationship with bank performance nonetheless it is not significant. This finding supports the claim that Islamic banks remain largely unaffected by unexpected crises. Therefore, a comprehensive understanding of these factors is crucial for policymakers, investors, and bank stakeholders to assess the health and performance of Islamic banks.

Striking the balance: Fiqh Bi’ah and Productive Waqf Forests (PWFs) for sustainable forest management in Indonesia

Purpose This study aims to address the challenge of balancing economic development with environmental protection in the context of productive waqf forests (PWFs). The inherent tension between forest productivity and protection necessitates a model that ensures sustainable utilization. This research proposes a novel framework by integrating fiqh bi'ah (Islamic environmental jurisprudence) with a model for PWFs development. Design/methodology/approach Using a qualitative approach, the analytical network process (ANP) analyzes data gathered through a literature review of Islamic environmental jurisprudence (fiqh bi'ah) on environment and waqf, in-depth interviews and focus group discussions with academics, practitioners and regulators in fiqh bi'ah and waqf forest management. Findings Three potential PWFs development models emerge from the fiqh bi'ah literature; Harim (maintaining the natural forest state for intangible benefits like oxygen and biodiversity), Hima (sustainable utilization of forest products while preserving ecological components) and Ihya’ al-mawat (developing unproductive land into a future forest). The ANP analysis reveals that Hima is the most preferred model by all stakeholders, followed by Ihya’ al-mawat. The Harim model received lower preference due to limited economic potential. Additionally, experts suggest tourism-based forest management as the most suitable approach for all three PWFs models. Originality/value This study offers a novel PWFs development model grounded in fiqh bi'ah principles. By using ANP to integrate diverse stakeholder perspectives, the research provides valuable insights for sustainable and ethical management of PWFs resources, contributing to the literature on Islamic finance and business models.

Pengaruh Literasi Keuangan Syariah terhadap Keputusan Nasabah dalam Memilih Cicilan Kendaraan Islami

This study aims to analyze the influence of Islamic financial literacy on customer decisions in choosing Islamic vehicle installments in Indonesia. Using a quantitative approach, a survey was conducted on several respondents in five major cities in Indonesia. The results showed that the level of Islamic financial literacy has a significant positive influence on customer preferences for choosing Islamic vehicle installments. Logistic regression analysis revealed that every one-point increase in the Islamic financial literacy score increases the odds of choosing Islamic vehicle installments by 4.9%. Demographic factors such as age, education, and income also have a significant influence. These findings highlight the importance of efforts to improve Islamic financial literacy as a strategy to encourage the adoption of Islamic financing products. Practical implications include the need for targeted education programs, improved product communication, and innovation in the development of competitive Islamic financing products.

Understanding and Preferences of Islamic Finance Among Gen Z

This study explores the understanding and preferences of Islamic finance among Generation Z by referring to Surah Al-Kahf verse 46. Generation Z, as a growing cohort in the digital era and globalization, has an increasingly important role in global economic development. Qualitative research methods are used to gain in-depth insight into the financial perspectives and beliefs of this generation, while verse 46 of Surah Al-Kahf was chosen as the theological basis for interpreting Islamic financial values. Results showed that, despite exposure to global culture, Generation Z showed significant interest in the concepts and principles of Islamic finance, as described in Surah Al-Kahf verse 46. Their understanding of these values influences their preferences for financial products and services. The implications of these findings for the financial industry and policymakers are presented, highlighting the importance of understanding and accommodating young people's preferences in more inclusive sustainable economic development, in line with the teachings of Surah Al-Kahf verse 46. This research aims to contribute to a better understanding of how Islamic financial values, as stated in the Qur'an, can guide the transformation of the global economy towards greater sustainability and inclusiveness.

Investor sentiment and stock market anomalies: Evidence from Islamic countries

Studies of the Ramadan effect argue that higher stock returns in Muslim countries during Ramadan relate to higher investor sentiment. However, Islamic countries rank low on the Hofstede Individualism Index, a proxy for investor overconfidence. Therefore, this study examines the impact of investor sentiment on stock market anomalies in two advanced Islamic finance jurisdictions: Malaysia and Indonesia. It hypothesizes that stock market anomalies are stronger following high sentiment if investors in Malaysia and Indonesia are overconfident. The results show that the long and short legs of the stock market anomalies earn relatively low returns following high investor sentiment, indicating overpricing during high sentiment. Moreover, the short leg earns relatively lower returns than the long leg following high sentiment because the short leg is more overpriced than the long leg when sentiment is high. Therefore, consistent with the hypothesis, the long-short returns of anomalies are stronger following high investor sentiment because of the relatively lower returns of the short leg than the long leg.

Impact of Economic Crises on Banking Sector Performance- A Comparative Analysis of Conventional and Islamic Banks Across OIC Countries

This study investigates the impact of three significant economic crises—the Eurozone Debt Crisis (2010-2012), the COVID-19 Pandemic (2020-2021), and the Post-Pandemic Economic Recovery (2021-2022)—on the performance of conventional and Islamic banks in Organization of Islamic Cooperation (OIC) countries. Using a dataset of 4,381 observations from 34 OIC countries, panel regression techniques are employed to evaluate the influence of these crises on key financial performance metrics: Return on Shareholders' Funds (ROSF), Profit Margin (PM), Return on Total Assets (ROA), Current Ratio (CR), and Solvency Ratio (SR). The analysis reveals that while the Eurozone Debt Crisis did not significantly affect bank performance, the COVID-19 pandemic led to a notable decline in profitability but an improvement in liquidity. The results highlight that during the COVID-19 pandemic, banks faced substantial challenges in maintaining profitability, as evidenced by the significant decrease in PM. However, the improvement in CR suggests that banks enhanced their liquidity management strategies to cope with the crisis. The Post-Pandemic Economic Recovery phase brought positive changes in both profitability and liquidity, demonstrating the ability of banks to adapt and thrive as economic conditions stabilized. Macroeconomic variables, such as GDP growth and inflation, played crucial roles, with GDP growth positively affecting ROSF and inflation negatively impacting PM. These findings underscore the importance of a diversified banking system, including both conventional and Islamic banks, to enhance financial stability. Policymakers and financial regulators should consider the unique strengths of Islamic banking principles in regulatory frameworks and prioritize sound macroeconomic policies to promote stability and resilience in the banking sector. Future research should further explore the long-term impacts of economic crises on bank performance across different regions and banking models, as well as the interaction between regulatory environments and bank resilience. Keywords: Economic crises, bank performance, conventional banks, Islamic banks, OIC countries, COVID-19 pandemic, Eurozone Debt Crisis, post-pandemic recovery, financial stability, macroeconomic factors.

Ethnoeconomy of Europe: Turkish Segment

The article examines the ethnic factor of the European economy. The migration of the Turks to Europe in the 1960s, formed a special segment of entrepreneurship in the region. A significant part of it was occupied by the representatives of the Turkish diaspora. Several factors including the social one contribute to the active development of the Turkish ethno-business in the European space. In addition, the formation and prosperity of the Turkish ethnic entrepreneurship in Europe is influenced by the high development of family and clan relations as well as the presence of various kinds of auxiliary mechanisms in the form of trade unions and business associations. In the context of small and medium-sized businesses, the key attention is paid to the development of the Turkish fast food industry related to the organization of food outlets, the hotel business, the provision of general services as well as tourism and logistics services. Large network business and transnational corporations of Turkey in most cases are engaged in such areas as: restaurant business; hotel business, including the construction of hotels; distribution of retail chains and Turkish brands. Islamic banking has also become a relatively new rapidly developing area of the Turkish ethnobusiness. The author concludes that the Turkish migration has significantly changed the nature of the European business. However, despite the wide representation of Turkish entrepreneurs in Europe, not all of them achieve the desired success and often face various kinds of discriminatory policies of the European authorities that restrict their activities.

Pengawasan Pelaksanaan Akad Notaris pada Perbankan Syariah oleh Dewan Pengawas Syariah

The rapid development of Islamic banking institutions must be supported by effective supervision so that operations are more efficient, so the Sharia Supervisory Board was formed by the National Supervisory Board (DSN) to oversee the application of sharia principles in Islamic banking. This research aims to find out the role of the Sharia Supervisory Board in supervising Islamic financial institutions in Indonesia and the Sharia Supervisory Board (DPS) related to supervising the implementation of contracts by Notary. The method used in this research is doctrinal legal research method using secondary data related to Islamic banking. The results of this study indicate that DPS supervision in Islamic banking is not optimal, which has an impact on the supervision of contracts in Islamic banking, as seen from the many problems in Islamic banking in the form of contract violations contrary to sharia principles. The conclusion of this problem is that the Sharia Supervisory Board (DPS) has not optimally carried out its supervision according to its rules to ensure compliance with sharia principles, as supervisors of Islamic banks must oversee every stage of the financing process to ensure the legal protection of their customers.

Prinsip Kerahasiaan dan Prinsip Kehati-Hatian dalam Perlindungan Data Nasabah Bank Syariah

Islamic banks conduct their business activities in accordance with the provisions of the Sharia Banking Law, adhering to the principles of confidentiality and prudence, which are fundamental to gaining customer trust. The business activities of Islamic banks involve the collection of funds (funding) and financing (lending) based on customer trust. In addition to trusting the bank with their funds, customers also trust the bank with their sensitive personal data, which must be protected as bank confidentiality according to Article 41 of the Sharia Banking Law. This study employs a normative juridical method to examine the principles of confidentiality and prudence in the business activities of Islamic banks in protecting personal data. The study utilizes primary and secondary legal materials, reviewing literature from previous research and conducting interviews. The research findings indicate that a data breach caused by a ransomware attack experienced by BSI threatens the bank's reputation. BSI must implement data protection measures to restore customer trust through confidentiality agreements. BSI also standardizes all banking systems used. Customers affected by data breaches can file complaints with BSI and the Financial Services Authority (OJK) as the supervisory body, and the bank must protect customers as stipulated by the regulations.

Macroeconomic Factors and Policy Dynamics Influencing FDI Flows from Arab Countries to Malaysia: A Qualitative Analysis (2018-2023)

This study examines the macroeconomic factors and policy dynamics influencing Foreign Direct Investment (FDI) flows from Arab countries to Malaysia during the period 2018-2023. Employing a qualitative research design, the study utilizes semi-structured interviews with key stakeholders, analysis of policy documents, and examination of economic data to provide a comprehensive understanding of this evolving economic relationship. The research reveals that Malaysia's economic resilience, robust GDP growth, and effective fiscal policies have been instrumental in attracting Arab FDI, despite global challenges such as the COVID-19 pandemic. Strategic policy initiatives, including targeted FDI incentives and bilateral trade agreements, have played a crucial role in facilitating investment flows. The study identifies key sectors attracting Arab investment, including real estate, Islamic banking and finance, oil and gas, and tourism. Malaysia's position as a global hub for Islamic financial services and halal industries emerges as a significant factor in its appeal to Arab investors. However, the research also highlights persistent challenges, such as regulatory hurdles, cultural and language barriers, and increasing regional competition. The study concludes that while Malaysia has successfully positioned itself as an attractive destination for Arab FDI, continued policy refinement and focus on high-value, knowledge-intensive sectors are necessary to maintain this position. The findings contribute to the growing body of literature on South-South economic cooperation and provide valuable insights for policymakers, investors, and researchers. Future research directions, including the need for quantitative analysis and comparative studies with other Southeast Asian countries, are suggested to further enhance understanding of these complex investment dynamics.

The Imperative of Standardized Comparative Standards for Sustainable Growth and Global Competitiveness in Islamic Finance

The Imperative of Standardized Comparative Standards for Sustainable Growth and Global Competitiveness in Islamic Finance

STRATEGI DIVERSIFIKASI PORTOFOLIO: ANALISIS DAMPAK RISIKO DAN KEUNTUNGAN PADA BANK KONVENSIONAL DAN SYARIAH MILIK NEGARA DI INDONESIA

This research examines the relationship between credit portfolio diversification and the risk and return of state-owned banks (Bank BUMN) from 2019 to 2023. Using multiple linear regression analysis, it evaluates the impact of the Herfindahl Hirschman Index (HHI) on credit or financing risk (NPL and NPF) and bank returns (ROA, ROE) among state-owned banks listed on the Indonesia Stock Exchange. Control variables include bank size, loan or financing to deposit ratio (LDR and FDR), and equity to total asset ratio (ETA). The results show that credit portfolio diversification reduces credit risk in BUMN banks, suggesting that spreading credit exposures across sectors can mitigate risk. However, diversification does not significantly affect bank returns (ROA, ROE). Control variables such as bank size, LDR and FDR, and ETA show no significant impact on credit risk, ROA, or ROE. This study provides empirical evidence on the effectiveness of financing portfolio diversification in managing credit risk within state-owned banks, considering Islamic banking principles. While diversification can mitigate credit risk, its impact on profitability requires careful consideration. BUMN banks should implement robust risk assessment frameworks and strategic oversight to maximize diversification benefits while maintaining financial stability and adhering to ethical and Sharia-compliant financial practices.