This study aims to examine the effect of Sharia Supervisory Board (SSB) characteristics on the level of social performance in Islamic banks in Indonesia. Social function becomes a special feature of Islamic banks that differentiates them from conventional banks. SSB characteristics consist of size, number of meeting, educational qualification, reputation, and cross-membership of SSB members. The data is taken from annual report of Islamic banks in Indonesia for the year 2010-2014 and processed by panel data regression using eviews. The results show that size and reputation of SSB members have significant effect on the social performance while the meeting, educational qualification, and cross membership of SSB members do not have effect on the social performance. The finding also shows that social performance of IBs in Indonesia is relatively high. This study has contribution on the measurement of social performance of Islamic banks and understanding the influence of SSB characteristic on social performance of IBs in Indonesia.
Purpose The purpose of this study is to discuss the extent to which Indonesian Islamic banks (IBs) disclose corporate social responsibility (CSR) according to the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) index. It also empirically examines the determinants of CSR disclosure in Indonesian IBs, based on disclosure from AAOIFI index, which is based on Islamic principles. Design/methodology/approach The determinant used in this paper is the corporate governance (CG) mechanism, which focuses on the board of commissioners (BOC) and Sharia Supervisory Board (SSB) and their characteristics. The paper uses multiple regression analysis to examine the influence of these variables on CSR. Findings The results indicate that the level of CSR disclosure of IBs measured by the AAOIFI index continues to be low. The statistical results reveal that CSR disclosure has an insignificant relationship with BOC size and SSB qualifications, while the other results show a negative association between the composition of independent BOCs and CSR disclosure, and the frequency of BOC and SSB meeting has a positive effect on this. Research limitations/implications The study focuses on Indonesian IBs. The variables of the CG mechanism are limited to the BOC and SSB, while the BOC exists only in countries that adopt two-tier boards. Practical implications IBs should provide a wider range of information to be disclosed. The government should establish specific items that need to be disclosed by IBs, considering there are no specific CSR disclosure regulations for IBs in Indonesia. Originality/value This study uses the AAOIFI index, which may be a suitable measure of CSR in IBs. The study also analyzes why certain items in the index have a high disclosure level and others do not.
This study aims to analyse the influence of banks' internal factors on Non-Performing Finance (NPF) at Islamic rural banks (IRBs) in Indonesia. IRBs has important factor in the economic activities in Indonesia because they provide small-mid-scale financing. The internal factors consist of the Financing to Deposit Ratio (FDR), Return on Assets (ROA), Capital Adequacy Ratio (CAR), Bank size and third-party funds (TPF). The sample in this study comprised 162 IRBs using quarteryear financial reports and examined using panel data regression. The statistical results show that ROA, CAR and bank size have a significant negative effect on NPF, while FDR and TPF have no impact on NPF in IRBs. This study may contribute to the evaluation of the financial performance of IRBs in managing their financing risk.
This paper aims to examine the influence of SSBs' characteristics toward Sharia compliance of Islamic banks in Asia and Gulf Cooperation Council (GCC). An epistemological model of the unity of knowledge was applied to determine the contribution of SSB to the Sharia compliance of Islamic banks that can create the well-being. The samples in this study are Islamic banks in Asia and Gulf Cooperation Countries (GCC) for the period of 2010 to 2018. The characteristics of SSB consist of the number of SSB members, cross membership, level of education, expertise, remuneration and rotation. This study analyzes the data using data panel regression with software of reviews. This study finds that SSB size has negative influence while education and expertise have positive influence toward sharia compliance of Islamic banks. Meanwhile, cross membership, remuneration and rotation of SSB members do not influence sharia compliance of Islamic banks. In general, the role of SSB in carrying out the function of creating well-being for the community has not ABOUT THE AUTHORS
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