Principles Of Islamic Finance Research Articles

Is Islamic Monetary System Possible in Indonesia? Interrelation Study between BI 7 Days Reverse Repo Rate and Nisbah Rate

The purpose of this study is to investigate the interrelationship between Bank Indonesia 7 Days Reverse Repo Rate (BI 7 DRRR) and Profit-Loss Sharing Rate (Nisbah Rate) in Islamic Sharia Banks (Bank Syariah Indonesia). Indonesia had been establishing conventional monetary system ever since and have yet to introduce Islamic approach to its monetary system. Now, in Islamic monetary perspective, interest rate doesn’t exist. Therefore, this research aimed to discover the possibility of Islamic approach in Indonesia’s monetary system, using Nisbah Rate launched by Islamic Sharia Banks as a substitution. The research was conducted using VAR (Vector Autoregression) to study the interrelationship between BI 7 Days Reverse Repo Rate and Nisbah Rate, using data obtained from Islamic Banking Statistics through Indonesia’s Financial Service Authority (OJK) monthly during 2021-2023. The result showed that both BI 7 Days Reverse Repo Rate and Nisbah Rate did cause impact on one another, and thus the possibility of establishing Islamic monetary system is not completely disregarded. This investigation contributes to the ongoing discourse surrounding the integration of Islamic financial principles into conventional monetary frameworks. By highlighting the reciprocal influence between conventional monetary policies and Islamic financial instruments, this study underscores the potential for a hybrid monetary system that accommodates Islamic principles within the Indonesian financial landscape.

Integrating environmental, social and governance (ESG) principles with Maqasid al-Shariah: a blueprint for sustainable takaful operations

Purpose This conceptual paper aims to delineate a comprehensive blueprint for the integration of environmental, social and governance (ESG) principles within the framework of Takaful operations, guided by the principles of Maqasid al-Shariah. The primary purpose is to establish a robust foundation for the sustainable transformation of Takaful, aligning it with ethical finance and Islamic values. Design/methodology/approach Using a theoretical research approach, this study delves into the multifaceted dimensions of ESG principles and the principles of Maqasid al-Shariah within the context of Takaful operations. The 17 SDGs/ESG principles and Maqasid al-Shariah are integrated to give a thorough framework for comprehending the disclosure index from western and Islamic ethical viewpoints. The research critically analyses current literature, scholarly works and authoritative sources, drawing inspiration from established approaches. Qualitative content analysis examines and compiles pertinent ideas, and the expert validates the disclosure index. It identifies key convergence, compatibility and divergence points between ESG principles and Maqasid al-Shariah to construct a comprehensive framework for Maqasid-driven ESG integration in Takaful. Findings The paper presents a well-defined blueprint for Maqasid-driven ESG integration in Takaful, revealing substantial areas of alignment between the two frameworks. This alignment is particularly pronounced in protecting life, religion, intellect, lineage and wealth. The blueprint underscores the potential of harmonising ESG principles with the principles of Maqasid al-Shariah, providing Takaful operators with a roadmap for enhancing their ethical credibility, societal impact and environmental stewardship. Research limitations/implications The blueprint outlined in this study opens new avenues for research at the intersection of Islamic ethics, responsible finance and sustainable development and signals the necessity of developing a standardised disclosure index. This index will serve as a vital tool for Takaful operators to transparently communicate their commitment to ethical and sustainable practices, facilitating a deeper understanding of Maqasid-driven ESG integration and bolstering transparency for all stakeholders. Further research into this disclosure index’s practical implementation, empirical validation and strategic implications is encouraged to advance responsible finance within the Takaful industry. Practical implications The proposed blueprint provides Takaful operators with a practical guide to align their operations with both ethical finance and Islamic principles. Embracing the principles of responsible governance, societal welfare and environmental sustainability, Takaful operators can enhance their product offerings, attract socially conscious stakeholders and contribute positively to both financial and ethical objectives. Social implications Integrating Maqasid-driven ESG principles in Takaful signifies a commitment to broader social well-being. Through initiatives aimed at safeguarding life, religion, intellect, lineage and wealth, Takaful operators can play a pivotal role in fostering social cohesion, empowering communities and actively contributing to sustainable development goals. Originality/value This conceptual paper contributes to the field by presenting a unique blueprint for integrating ESG principles within Takaful operations, guided by Maqasid al-Shariah. The novelty of this approach lies in its holistic perspective on ethical finance, aligning Islamic values with contemporary global ethical imperatives. The blueprint offered here represents an original framework for responsible Takaful practices that resonate with evolving ethical standards and the enduring principles of Islamic finance.

Green Sukuk: Tantangan dan Strategi Pengembangan Untuk Pembangunan Berkelanjutan Serta Menuju Ekonomi Hijau

Green Sukuk is a financial instrument that combines the principles of Islamic finance with sustainable development goals. This article discusses the role, practices, mechanisms, as well as challenges and efforts of the government in developing Green Sukuk in Indonesia. Green Sukuk have great potential in supporting the transition to a sustainable economy by providing a source of funding for environmentally friendly projects. However, challenges such as lack of awareness and capacity of financial institutions need to be overcome to optimize the contribution of Green Sukuk. Through strengthening regulations, outreach, product innovation and international cooperation, it is hoped that the Green Sukuk market can continue to develop and support the achievement of sustainable development goals in Indonesia.

Islamic finance principles and performance of micro, small and medium enterprises (MSMEs) in Makindye Division Kampala District Central Uganda

Purpose Micro, small and medium-sized enterprises (MSMEs) are vital for economic growth in developing countries. Yet, little research has explored the link between Islamic principles and MSME performance, especially in Uganda. This study aims to investigate the relationship between Islamic financial principles and MSMEs’ performance in Makindye Division Kampala – Uganda. Design/methodology/approach This study used a correlational research design involving 86 respondents from 30 MSMEs between January and May 2023. Data collected through questionnaires was analyzed with Statistical Package for Social Sciences, examining three independent variables: ethicality, Halal investment and prohibition of riba, in relation to MSME performance. Findings The results revealed significant relationships between these variables and MSME performance. Prohibition of riba (r = 0.296, n = 86, p = 0.006), Halal investments (r = 0.308, n = 86, p = 0.004) and ethical principles (r = 0.283, n = 86, p = 0.008) all exhibited a statistically significant relationship. Regression analysis with R = 0.405, R2 = 0.164 and adjusted R2 = 0.134 indicated that all hypothesized variables were significant predictors of MSME performance. Based on findings, this study rejected the null hypothesis, confirming a moderately positive and significant relationship between Islamic financial principles and MSME performance. Originality/value This study underscores the importance of active involvement from key stakeholders such as the Uganda Halal Bureau, Uganda Muslim Supreme Council, Islamic financial institutions and government agencies in integrating robust support mechanisms for MSMEs into their strategic frameworks. Such efforts could enhance Uganda’s economic landscape, aligning with the experiences of Malaysia and Indonesia in leveraging Islamic principles for economic growth.

STATE AND PROSPECTS FOR THE DEVELOPMENT OF ISLAMIC FINANCE INSTRUMENTS (SUKUK) IN RUSSIA AND ABROAD

The search for new sources of financing investment projects in modern Russia in the context of external sanctions and the implementation of geopolitical threats actualizes the problem of incorporating Islamic finance instruments into the structure of the financial market. The early twentieth century development experience of a number of foreign countries shows the steady growth of the assets of Islamic banks, investment funds and the volume of issuance of investment certificates (sukuk), which constitute the main segments of Islamic finance in the world. Islamic financial assets are widely represented in the Gulf countries, Southeast Asia, the Middle East and South Asia, and Africa. The implementation of the principles of Islamic finance in the Russian Federation is hampered by legal, cultural, historical and political factors. While there are certain Islamic financial products in Russia, there is no issue of sukuk at all. In this regard, the purpose of this paper is to study the principles of Islamic finance and the functioning mechanism of the market for the investment certificates (sukuk), possibilities and limitations of their implementation in the modern Russian economy. The author defines sukuk as an Islamic financial instrument used for securitization of assets, and identifies its differences from traditional bonds. Alternative approaches to solving the problem of compliance of sukuk with Sharia principles are analyzed. The prerequisites for realizing the potential of sukuk in modern Russia are determined and the obstacles to their issuance are formulated. It is concluded that the adoption of the Federal Law of 04.08.2023 N 417-FZ "On Conducting an Experiment to Establish Special Regulation in Order to Create the Necessary Conditions for Carrying out Partnership Financing Activities in Certain Constituent Entities of the Russian Federation and on Introducing Amendments to Certain Legislative Acts of the Russian Federation" and its implementation, taking into account its provisions of pilot projects in a number of Russian regions, will make it possible to intensify the process of incorporation of project financing instruments into the structure of the financial markets of modern Russia.

Tracing knowledge diffusion flows in Islamic finance research: a main path analysis

Purpose This study aims to address the noted gap in comprehensive overviews detailing the developmental trajectory of Islamic finance (IF) as an interdisciplinary academic field. Design/methodology/approach The study introduces a unique approach using the combined methodologies of co-word analysis and main path analysis (MPA) by examining a broad collection of IF research articles. Findings The investigation identifies dominant themes and foundational works that have influenced the IF discipline. The data reveals prominent areas such as Shariah governance, financial resilience, ethical dimensions and customer-centric frameworks. The MPA offers detailed insights, narrating a journey from the foundational principles of IF to its current challenges and opportunities. This journey covers harmonizing religious beliefs with contemporary financial models, changes in regulatory landscapes and the continuous effort to align with broader socioeconomic aspirations. Emerging areas of interest include using new technologies in IF, standardizing global Islamic banking and assessing its socioeconomic effects on broader populations. Originality/value This study represents a pioneering effort to map out and deepen the understanding of the IF field, highlighting its dynamic evolution and suggesting potential avenues for future academic exploration.

Encouraging Economic Growth Through Islamic Financial Principles in Indonesia

This qualitative study explores the potential of promoting economic growth through Islamic finance principles in Indonesia. Through interviews with key stakeholders, including policymakers, representatives from Islamic financial institutions, and Shariah scholars, perceptions, challenges, opportunities, and strategies related to Islamic finance are examined. The findings highlight the optimism about the role of Islamic finance in driving economic growth, alongside challenges such as regulatory constraints, lack of awareness, and limited product innovation. Strategies for enhancing regulatory frameworks, promoting financial literacy, and fostering innovation and collaboration are discussed as avenues for unlocking the full potential of Islamic finance in Indonesia.

What is the insolvency regime applied under Shariah for Islamic banks?

Purpose This study aims to develop a comprehensive insolvency model tailored to Islamic banks, ensuring alignment with Shariah principles throughout pre-insolvency, bankruptcy and post-bankruptcy stages. Design/methodology/approach The research adopts a qualitative research method, using a desktop research approach. Primary sources and secondary sources are examined to gather information and draw conclusions. Findings This study presents a comprehensive insolvency model designed for Islamic banks, rooted in Shariah principles. The model covers pre-insolvency, bankruptcy (taflis) and post-bankruptcy stages, incorporating key Shariah parameters to ensure adherence to Islamic finance principles. It addresses challenges such as adapting to dynamic financial landscapes and varying interpretations of Shariah principles. Notably, the model recognizes the separate legal personality of Islamic banks and emphasizes transparency, fairness and compliance with religious obligations. In the post-bankruptcy stage, directors are urged to voluntarily settle remaining debts, aligning with ethical and Shariah-compliant standards. Originality/value The study contributes to the stability and growth of Shariah-compliant financial systems by extending insolvency principles to Islamic banks, providing a foundation for future research and policymaking specific to this context.

Comparison Of Capital Structure, Profitability, And Third-Party Funds (DPK) Between Bank Bri And Bank Syariah Indonesia: A Comparative Analysis

The banking sector plays a crucial role in the Indonesian economy, becoming the backbone that supports the country's economic growth and stability. In this dynamic landscape, two financial institutions stand out, namely Bank Rakyat Indonesia (BRI) as a representative of conventional banks, and Bank Syariah Indonesia (BSI) which is committed to Islamic financial principles. The purpose of this study is to determine the comparison of capital structure, profitability, and third party funds (DPK) between BRI banks and Indonesian Islamic banks. This research method uses the Mixed Methods Comparative method, this approach involves the collection and analysis of quantitative and qualitative data separately and at the same stage. The results of this study show that  the comparative analysis between Bank BRI and Bank Syariah Indonesia (BSI) highlights the different dynamics in the capital structure, profitability, and deposits of both. BRI, with its conventional approach, demonstrates flexibility and excellence in diversifying financial resources. On the other hand, BSI, as an Islamic bank, provides evidence that Islamic principles can provide profitability and a sustainable financial foundation. These results provide a better understanding of each bank's role in meeting the needs of society, both in terms of financial services and business ethics principles. Stakeholders, including regulators, investors, and the general public, can use the results of this analysis to make informed decisions and support the sustainable growth of the banking sector in Indonesia.TRANSLATE with x EnglishArabicHebrewPolishBulgarianHindiPortugueseCatalanHmong DawRomanianChinese SimplifiedHungarianRussianChinese TraditionalIndonesianSlovakCzechItalianSlovenianDanishJapaneseSpanishDutchKlingonSwedishEnglishKoreanThaiEstonianLatvianTurkishFinnishLithuanianUkrainianFrenchMalayUrduGermanMalteseVietnameseGreekNorwegianWelshHaitian CreolePersian //  TRANSLATE with COPY THE URL BELOW Back EMBED THE SNIPPET BELOW IN YOUR SITE Enable collaborative features and customize widget: Bing Webmaster PortalBack//

Introduction to Sharia Economics and Financial Literacy for Elementary School Students

This research delves into the introduction of Sharia Economics and financial literacy among students at the International School of Kuala Lumpur. Recognizing the importance of financial education and ethical financial practices, especially in diverse educational settings, this study aims to bridge the gap in understanding Islamic finance principles and fostering financial literacy among students. The background of the problem lies in the necessity to equip students with comprehensive knowledge of Sharia Economics, aligning with the multicultural context of Kuala Lumpur. The primary objective of this research is to assess the effectiveness of integrating Sharia Economics education and financial literacy within the curriculum of an international school. Through a systematic methodology, including surveys, workshops, and curriculum analysis, the research evaluates the students' understanding and engagement with Sharia Economics principles and financial literacy concepts. The findings reveal the significance of incorporating Sharia Economics and financial literacy education in the curriculum, highlighting improved awareness and comprehension among students. The integration of real-life examples and interactive learning methods enhances students' practical understanding of ethical financial practices within the Islamic framework. In conclusion, this research underscores the importance of promoting Sharia Economics education and financial literacy among students in international schools, emphasizing its role in shaping responsible financial behaviors and fostering a deeper understanding of ethical economic principles. The implications of this study extend beyond the classroom, emphasizing the broader significance of financial education in promoting economic sustainability and ethical financial practices in diverse global contexts.

Transformasi Digital dalam Keuangan Islam: Peluang dan Tantangan

This research aims to explore the impact of digital transformation in the Islamic finance sector, discussing the opportunities and challenges that arise with the adoption of digital technologies. The study utilizes a qualitative method with literature review approach. Digital transformation includes the implementation of innovations such as financial technology (fintech), blockchain, and artificial intelligence within the context of Sharia-compliant finance. The results of the discussion present a comprehensive overview of how digitization affects Islamic financial products and services, considering the potential for increased operational efficiency, financial inclusivity, and more effective adherence to Islamic financial principles. Meanwhile, challenges such as data security, regulations, and market acceptance are also outlined, emphasizing the efforts required to optimize the benefits of digital transformation in the realm of Islamic finance.

Comparative analysis of Islamic banking regulation in Kyrgyzstan and Central Asian countries

The Islamic banking regulation plays a key role in ensuring the development of this type of financial activity, especially for countries with a predominantly Muslim population, such as the Kyrgyz Republic and other Central Asian countries, in particular the Republic of Kazakhstan and the Republic of Tajikistan. Therefore, the study aims to analyse and compare the peculiarities of the legal framework that regulates the activities of Islamic banks. Legal analysis, statistical analysis, grouping, generalisation, comparison, and abstract and logical thinking methods were used in the article. The information basis for this study included the current laws and regulations of Kyrgyzstan, Kazakhstan, and Tajikistan in the field of Islamic banking regulation. The study analyses the laws that establish the principles of operating and regulation of Islamic banks, as well as the regulatory documents of the Central banks of the Kyrgyz Republic, Kazakhstan, and Tajikistan. The study identifies and analyses the key requirements established for the establishment of Islamic banks, Shariah boards operating within such banks, as well as prudential standards for financial institutions operating on the principles of Islamic finance. A comparative analysis of regulatory and legal documents has made it possible to formulate both common and different approaches used to ensure and regulate the activities of Islamic banks. It is established that the key difference between the legal regulation of Islamic banks in Kazakhstan, as compared to Kyrgyzstan and Tajikistan, is the lack of possibility for banking structures to combine traditional banking activities with activities based on the principles of Islamic Finance. The study results can be used by the authorities that form the legislative framework and regulate the activities of Islamic banks, and entities operating in the banking system, as well as by the scientific community interested in ensuring the Islamic banking regulation in Kyrgyzstan and other Central Asian countries

Insights for growth: Understanding the drivers of ASNAF entrepreneurial success in Malaysia

The aim of this study is to bridge a critical gap in the literature by exploring the factors that underpin the entrepreneurial success of ASNAF (ASNAF) individuals within the Malaysian context. ASNAF individuals, being eligible for zakat, represent a unique segment of entrepreneurs whose ventures intertwine Islamic finance principles, socio-economic challenges, and the pursuit of sustainable growth. Through a comprehensive empirical investigation, the purpose of this study is to provide nuanced insights into the specific drivers that contribute to the success of ASNAF-led enterprises and offer actionable recommendations for fostering inclusive entrepreneurship. This study used a quantitative survey involving 250 ASNAF entrepreneurs in Malaysia to capture their diverse experiences. By using factor analysis, five factors were subsequently identified as key drivers for entrepreneurs’ success. These factors are record-keeping, capital, employees, marketing strategy, and online business. The anticipated findings of this research include a nuanced understanding of the factors driving ASNAF entrepreneurial success, contributing to both academic knowledge and practical implications for policymakers, financial institutions, and the ASNAF community. This study aims to create an environment that supports long-term growth, social responsibility, and inclusive economic development among ASNAF people in Malaysia by shedding light on the untapped potential at the intersection of Islamic finance and entrepreneurship.

ENTERPRISE BANK RELATIONSHIP: ISLAMIC FINANCE AND THE FINANCIAL FAILURE OF COMPANIES IN MAURITANIA

Building a strong business-bank relationship involves clear communication, transparency about your company's financial needs, and understanding the services offered by the bank. Regularly review and update your financial strategy with your bank to ensure it aligns with your business goals. Islamic finance in Mauritania operates in compliance with Sharia principles, avoiding interest-based transactions. While it can provide ethical financial solutions, business failure can still occur due to various factors such as economic instability, mismanagement, or external market conditions. Evaluating risks, adhering to Islamic financial principles, and implementing sound business practices are crucial to mitigate the potential for failure. Financial failure can result from a variety of factors, including poor financial management, excessive debt, economic downturns, or inadequate market research. It's essential for businesses to maintain financial discipline, regularly assess their financial health, and adapt strategies to changing circumstances to minimize the risk of financial failure. Seeking professional advice, managing cash flow effectively, and maintaining transparency in financial reporting are key practices to safeguard against financial setbacks. This research addresses the bank-business relationship by emphasizing the role of Islamic finance in the fight against business failure. The outline of our article is as follows: 1) A literature review on microfinance and its role in financing SMEs and also its role in the fight against unemployment among young graduates. It will be a literature that sweeps from the regional context to an international context. 2) Identification of research hypotheses and development of a questionnaire 3) Analysis of quantitative data using SPSS software and validation of hypotheses. Proposal for a modeling for the relationship between microfinance and the fight against youth unemployment in Mauritania. 4) Discussions of scientific results and recommendations for future research avenues

Ethical entrepreneurship: Islamic financial principles for Small and Medium Enterprises (SMEs)

Islamic ethics prescribe its followers to zealously guard their behavior, words, thoughts, and intentions and observe certain norms and moral codes in their financial transactions; in their social affairs; and in private and public life. The unique feature of the Islamic ethical system is that it permeates all spheres and fields of human life. Islam therefore has its own distinctive value-based ethical system for finance dealings. It prescribes certain specific guidelines governing finance ethics, which are dictated primarily by the notion of halal (lawful or permitted) and haram (unlawful or prohibited) as per Islamic jurisprudence (fiqh). The current global economic meltdown is a clear revelation of the shortcomings of the conventional financial set-up and the weakness of self-designed system devoid of spiritual and divine guidance, hence the yearning and desire for a socially just financial system by conscious individuals and corporate bodies. The assertion that Islamic financial system is only distinguished from other economic systems in its emphasis on interest free and other usurious transactions coupled with the fact that many concepts are springing up contending with the Islamic financial system inform the need to study the system within the context of Islamic ethical principles. This paper is therefore out to articulate the ethical principles of financial institutions as enshrined in the Qur’an and the Sunnah of the Prophet so that Islamic financial system will not lose focus and to avoid being carried away by the flamboyant and excessive profits and surpluses of the conventional financial institutions.

Fintech in islamic finance literature: A review

This literature review examines the role of fintech in the context of Islamic finance. Through a systematic analysis of relevant literature, this research highlights the contribution of fintech in improving Islamic financial services as well as the challenges faced in the integration process. These findings indicate that although fintech has opened the door to innovation in the Islamic finance industry, there is still a need to overcome barriers related to sharia compliance and consumer protection. Therefore, this research underlines the importance of a careful and planned approach in integrating fintech with Islamic finance principles.

Islamic finance as a driver for enhancing economic sustainability and innovation in the GCC

Purpose This study aims to investigate the role of Islamic finance in supporting sustainable economic growth, innovation and digital transformation in the Gulf Cooperation Council (GCC) region. Amid global challenges like the Russia–Ukraine conflict and COVID-19, the focus extends beyond the GCC’s oil dependency to explore how Islamic finance can enable technological advancements and foster a digitally innovative economy. The research aims to reveal the potential of Islamic finance in driving economic diversification, technological progress and sustainable development in the GCC. Design/methodology/approach Using a content analysis approach, this study critically examines the economic repercussions of recent global crises, shedding light on how Islamic finance contributes to socio-economic justice and the provision of social goods in the GCC. The research synthesises findings from various secondary sources, including academic literature, reports and industry standards, to analyse Islamic finance’s role from an ethical and strategic perspective within the GCC’s evolving economic landscape. Findings The findings reveal Islamic finance’s potential to significantly contribute to the GCC’s economic diversification and resilience against global economic downturns. The study highlights how Islamic finance aligns with the sustainable development goals and its effectiveness in promoting ethical financial practices and socio-economic justice. Research limitations/implications Future research should focus on global comparative studies to understand Islamic finance’s impact on sustainable development beyond the GCC. Longitudinal studies are also essential to assess the long-term effects of Islamic financial instruments on economic stability. Practical implications The research advocates for incorporating Islamic finance principles into the GCC’s economic strategies, emphasising its role in providing resilient and ethical financial alternatives conducive to sustainable development. It underscores the need for policy initiatives integrating Islamic finance to bolster socio-economic welfare and environmental sustainability. Originality/value Offering a novel perspective, this paper enriches the discourse on the contribution of Islamic finance to sustainable economic development. It presents critical insights into how Islamic finance can underpin long-term economic resilience and growth in the GCC. It provides valuable implications for academia and policymaking, particularly in emerging economies’ science and technology policy management.

Исламское (партнерское) финансирование: российский эксперимент и международные налоговые договоры

The article analyzes the provisions of the federal law introducing the rules for conducting an experiment to establish special regulation for Partner financing. The peculiarity of Partner financing is that it is consistent with the principles of Islamic finance (Islamic financial model). The author examines the specifics of the qualification of income from Partner financing instruments for the purposes of tax treaties.

Financial Sukuk: Concept, Legal Principles, and Types

Sukuk, often referred to as Islamic bonds, represent a unique and innovative financial instrument within the realm of Islamic finance. Originating from the principles of Shariah law, Sukuk offer a distinct alternative to conventional bonds by adhering to Islamic principles that prohibit the payment or receipt of interest (Riba). Instead of interest-bearing debt, Sukuk are structured as investment certificates, granting investors a share in the ownership of tangible assets or services. This adherence to Shariah principles ensures that Sukuk are compatible with Islamic ethical and legal standards, attracting a diverse range of investors seeking financial instruments aligned with their religious beliefs. As Sukuk continue to gain prominence in global financial markets, they contribute to the development of more inclusive and diverse investment options, catering to both Islamic and non-Islamic investors alike. This research paper presents a thorough literature review of Sukuk in the Islamic economy and showcases their definition, typologies and other aspects. Sukuk, often referred to as Islamic bonds, play a significant role in the Islamic economy. These financial instruments comply with Islamic law (Shariah) principles, which prohibit the payment or receipt of interest (Riba) and promote risk-sharing and asset backing. Sukuk provide an alternative means for raising capital that aligns with Islamic finance principles. The study herein is of significance for researcher as well as postgraduate researchers in the areas of Islamic banking, economy studies and accounting.

Liquidity Risk Management in Islamic Banks: Review of the Literature and Future Research Perspectives

This paper explores the distinctive characteristics of liquidity risk faced by Islamic banks as well as the typical challenges and constraints faced by these institutions; it also examines the strategies employed by these institutions to effectively manage and mitigate such risks. The inclusion of a literature review of most cited articles on the subject provides a summary of key studies and research conducted in the field of liquidity risk management in Islamic banking. It aims to cover various aspects of liquidity risk management in Islamic banks, including risk identification, measurement, mitigation strategies, governance, interbank relationships regulatory considerations, and the role of Shariah compliance. It offers both researchers and practitioners seeking comprehensive knowledge on the subject an overview of the existing body of knowledge, enabling them to understand the current state of research and build upon existing insights. By offering a comprehensive coverage of current information and practical strategies available in the literature, this paper aims to add significant value to the understanding and implementation of liquidity risk management in Islamic banks. We mean for it to serve as a valuable resource for researchers, practitioners, regulators, and stakeholders involved in Islamic finance and risk management. By stressing the persistent need for effective liquidity risk strategies in the Islamic banking sector and offering insights into the application of liquidity risk management practices that align with Islamic finance principles, we attempt to address a gap in the existing literature that could constitute the basis for future research perspectives.