Islamic Finance: An Alternative in the Global Financial Market?

Rarick, Charles A.

doi:10.2139/ssrn.1332793

Cited by 6 publications

(5 citation statements)

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“…The aftermaths of the 2008 US subprime mortgage crisis urged the banking sector to review their governance models. Rarick (2009) introduced the "Islamic system" as an optimal substitute to the existing capitalistic model to the Global Financial Crisis. However, without proper understanding of the role corporate governance play on the performance of Islamic banks themselves, how dare one suggest such quick remedy?…”

Section: Introductionmentioning

confidence: 99%

Relationships of Corporate Governance Mechanisms and Financial Performance in Islamic Banks: a Meta-analysis

Li¹,

Armstrong²,

Clarke³

2014

JBSGE

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Relationships between corporate governance mechanisms and the financial performance of Islamic banks have been researched extensively in prior empirical research. However, the results are mixed, mainly due to the heterogeneity of the samples used for the empirical investigations. This paper reports the results of a meta-analysis of the existing literature on governance mechanisms from which a framework was developed to guide the constructions of governance indices. The results showed that Islamic banks banks tend to have better financial performance if there was (1) a higher proportion of independent directors on the board; (2) the Shari"ah Supervisory Board was large and consisted of top scholars; (3)numerous directors; (4) the CEO was chairman; (5) auditing was enforced and (6)

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Section: Introductionmentioning

confidence: 99%

Relationships of Corporate Governance Mechanisms and Financial Performance in Islamic Banks: a Meta-analysis

Li¹,

Armstrong²,

Clarke³

2014

JBSGE

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“…The studies of Chapra (1992) and Ariff (1988) identified that Islamic banks are interest-free banks and Chapra and Khan (2000) stated that though Islamic banking systems appear like interest-based instruments, they are not so, as there are significant differences between the two for a number of reasons. Finally, the studies of Jalil and Rahman (2010), Imam and Kpodar (2010), Rarick (2009), Bidabad and Allahyarifard (2008) and Abdul Rahman (2007) also noted that cruelty and injustice in the financial system due to Riba is removed and socioeconomic development is ensured by introducing the Halal ways of doing business e.g. Musharkah, Mudharbah, Bai' Salam and Ijarah.…”

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confidence: 99%

Shari’ah compliance in Islamic banking

Ullah

2014

International Journal of Islamic and Middle Eastern Finance and Management

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to evaluate the Shari'ah compliance status of the Islamic banks in Bangladesh. Design/methodology/approach -The research was based on both primary and secondary materials. The primary data were gathered through sample questionnaire survey and personal interviews by the researcher; the secondary data were obtained from Qur'an, Hadiths, different circulars/letters, manuals, research books and journals, annual reports, Web sites of the sample banks. Statistical tools and techniques like weighted average, percentage, SD, variance and correlation between Shari'ah violation score and bank-specific attributes were used applying statistical software Statistical Package for Social Science (version 17.0). Findings -Shari'ah compliance status of the Islamic banks in Bangladesh is in a vulnerable condition, Shari'ah compliance status highly varies among the Islamic banks, and Shari'ah violation is high in investing activities because of lack of knowledge, lack of sincerity in complying Shari'ah, poor attention in Shari'ah audit and Shari'ah research and lack of strong Shari'ah supervisory board comprising full-time skillful members. Practical implications -Among others, the major policy implications of this study are as follows: regulatory bodies and Shari'ah board members are expected to have guidelines from this study to find their limitations and to determine their future responsibilities; executives and Employees are expected to get the idea of present state of Shari'ah compliance and to identify their weaknesses in this regard; clients and other stakeholders are expected to have guidelines to choose the better Islamic banks to perform banking transactions; and the researchers in Islamic banking may usefully use the issues raised in this article for more comprehensive studies in Islamic banking and Shari'ah compliance. Originality/value -The paper opens a new avenue in justifying the status of Shari'ah compliance with a new dataset and correlating Shari'ah violation score with bank-specific attributes.

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“…Mudarabah, Musharakah etc.) that are Halal methods of conducting business ( Jalil and Rahman, 2010;Rarick, 2009;Abdul Rahman, 2007;Imam and Kpodar, 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

Level of Shariah Compliance in the Operation of Islamic Banks in Bangladesh: An Empirical Study

Karim¹,

Shetu²

2020

International Journal of Islamic Economics and Finance Studies

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This paper has tried to assess the level of Shariah compliance in the operation of the Islamic Banks in Bangladesh. The data were collected from questionnaire survey on 400 respondents from six Islamic banks regarding banking operations and from personal interview with bank officials & regulators of the banks in the month December 2019. Other data were attained from different journals, books, Qur'an, Sunnah and the websites of the sample banks. Descriptive statistics are used to analyze the data. Although most of the Islamic banks have policy for shariah deposit, they offer fixed profit rate which is violation of shariah. In case of investment, significant non-compliance is found in Musharakah contact although moderate level of compliance is found in Mudarabah, Ijarah and Quard Hasanah contracts. Highest level of non-compliance is found in shariah based annual audit. The underlying reasons for the non-compliance are the absence of mandatory Shariah guidelines, lack of Shariah scholarly officials, dual audit compliance, absence of penalties for non-compliance and some other external factors. If the Central bank and other regulatory bodies are concerned enough to form a uniform guideline for all the Islamic banks operating in Bangladesh, it will be easier for the Islamic banks to comply with Shariah. This is the sole study that deals with different areas of operations in the Islamic Banks to assess the shariah compliance. It has incorporated both survey and interview findings to assess the real picture.

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Islamic Finance: An Alternative in the Global Financial Market?

Cited by 6 publications

References 0 publications

Relationships of Corporate Governance Mechanisms and Financial Performance in Islamic Banks: a Meta-analysis

Relationships of Corporate Governance Mechanisms and Financial Performance in Islamic Banks: a Meta-analysis

Shari’ah compliance in Islamic banking

Level of Shariah Compliance in the Operation of Islamic Banks in Bangladesh: An Empirical Study

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