The Disclosure of Sharia Non-Compliance Income: Comparative Study between Full-fledged and Subsidiaries Malaysian Islamic Banks

Puneri, Atharyanshah; Chora, Moustapha; Ilhamiddin, Nazarov; Benraheem, Hafiz

doi:10.21927/jesi.2019.9(2).104-117

Cited by 5 publications

(5 citation statements)

References 3 publications

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“…This is because in Islam all financial transactions must be transparent, accurate, and fully recorded [48]. All income received from non-Shariah sources must be fully audited and managed, otherwise they can affect the economic sustainability of Islamic banks [49]. It is the responsibility of the Shariah committee to identify such income and dispatch it to charity funds [50,51].…”

Section: Categorization Of Sustainability Indicator Into Respective Smentioning

confidence: 99%

Alignment of Islamic Banking Sustainability Indicators with Sustainable Development Goals: Policy Recommendations for Addressing the COVID-19 Pandemic

et al. 2021

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This study aims to establish the link of key Islamic banking sustainability indicators with the United Nations’ Sustainable Development Goals (UN SDGs) as a policy recommendation for sustainable development and to mitigate the distressing impacts of the COVID-19 pandemic on the triple bottom line (people, planet, and profit). To identify the key Islamic banking sustainability indicators, the authors selected the most cited sustainability measurement indexes in Islamic banking. Initially, the indexes were divided into 10 broader themes, and then the key Islamic banking sustainability indicators were shortlisted from each theme based on their high-frequency distribution. The shortlisted sustainability indicators were then ratified to be in line with Islamic philosophy based on “Maqasid al-Shariah” (objectives of Shariah) and were subsequently grouped into the three dimensions of economic, environmental, and social sustainability based on the axial coding method. Finally, the categorized sustainability indicators were aligned with the relevant UN SDGs through the axial coding method for policy formulation, and respectively 12 propositions were developed for policy formulation. This study labeled the methodological process of this study as the ECA method (exploration, categorization, alignment). The new ECA method offers a reverse extension in the “SDG compass” developed by the Global Reporting Initiative (GRI) for aligning business policies with the UN SDGs. The process of aligning Islamic banking sustainability indicators with the UN SDGs will provide a roadmap to recovery from the COVID-19 pandemic in terms of economic, environmental, and social issues. Due to the diversity of the UN SDG framework, it covers multiples aspects for sustainable development. Therefore, considering the UN SDGs in terms of various banking instruments will mitigate the multiple distressing impacts of COVID-19 on the triple bottom line (people, planet, and profit), it will also promote a sustainable development agenda.

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Section: Categorization Of Sustainability Indicator Into Respective Smentioning

confidence: 99%

Alignment of Islamic Banking Sustainability Indicators with Sustainable Development Goals: Policy Recommendations for Addressing the COVID-19 Pandemic

et al. 2021

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“…(4) Authorization to Force Sanctions A large number of cross-sectoral problems in the monetary aids division, which involve moral hazard effects, the inadequate protection of financial service consumers, furthermore the splitting of financial policy stability have more prompted the need for the enterprise of a combined supervisory institution in the monetary services segment (Puneri et al, 2020) (Nastiti & Kasri, 2019). In connection with the foregoing, it is required to rearrange the organizational formation regarding companies that carry out managerial and supervisory duties in the field of monetary aids, which include banking, wealth exchanges, assurance, grant funds, financial institutes, and other financial service.…”

Section: Licensing Regulation and Supervisionmentioning

confidence: 99%

An Analysis of the Indonesian Sharia Banking Development Roadmap 2020-2025

Hasan

2023

OJIMF

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This article aims to examine the Roadmap that has been published by the Financial Services Authority (OJK) for the expansion of Islamic banking in Indonesia in the next five years. In particular, it seeks to analyze the main pillars that the Roadmap has identified to further the progress of Islamic banking in Indonesia. These pillars are strengthening the identity of Islamic banking, synergizing the Islamic economic ecosystem, and strengthening licensing, regulation, and supervision. This study applies a qualitative method to analyze the implementation of the 2020-2025 Islamic banking development roadmap. The data was analyzed using taxonomic analysis techniques method, that conducts not only a general exploration but also focuses on a particular domain in accordance with the research focus of the researcher. Because this research is qualitative in nature, the data was interpreted based on the content review system. The paper finds that the use of technology is one of the most important tools to achieve the three pillars of Islamic banking in Indonesia. Having the full support of all Islamic banking stakeholders is also another important factor that will further progress the industry. The analysis of the Islamic banking Roadmap provides an overview on the key pillars that have been identified as drivers for the future of Islamic banking in Indonesia. This will provide important knowledge to industry players, the academic and other stakeholder to understand the direction that the industry will be taking in the next five years so that they can collaborate effectively to support the progress of the industry. The analysis of the 2020-2025 Islamic banking development roadmap is a first in the existing literature. A critical analysis of this recently released document by the OJK in 2021 is deemed important to elucidate the future direction of the Islamic banking industry to stakeholders in Indonesia.

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“…Islamic banks also clearly and accurately disclose their sharia non-compliant income (Puneri et al, 2020). According to Yunus et al (2017), sharia non-compliant products, unlawful deposits from depositors, defective documents, shariah non-compliant business operations, and interest received from conventional banks are five primary sources of non-halal income.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia

Nisa

Nainggolean

Faturohman

2021

J. Keuang. dan Perbank.

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This study examines the effect of government ownership on the sharia risk of Islamic rural banks using all publicly available data of 156 BPRSs from 23 provinces in Indonesia. This research uses a quantitative method with secondary data obtained from the Financial Services Authority (OJK). Regressions using panel data regressions are employed to analyze the relationship between government ownership and sharia risk. Non-halal income is employed to measure the sharia risk between 2019 Q4 and 2020 Q3, representing the timeline before and during COVID-19. In all models and periods, the results found a significant positive effect of government ownership variables on non-halal income. However, the degree decreases during the COVID-19 pandemic. It reveals that government-owned Islamic rural banks are found to have lower non-halal income during the pandemic. We also find that more significant firms with higher leverage tend to have higher non-halal income. This study is expected to contribute to the still thin literature on sharia risk, especially in the context of Islamic rural banks in Indonesia. Results will have implications to the regulator to assure the sharia compliance of the Islamic finance industry. This is essential to gain trust from the Islamic society, which is concerned about the observance of Islamic banks.JEL: G21

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The Disclosure of Sharia Non-Compliance Income: Comparative Study between Full-fledged and Subsidiaries Malaysian Islamic Banks

Cited by 5 publications

References 3 publications

Alignment of Islamic Banking Sustainability Indicators with Sustainable Development Goals: Policy Recommendations for Addressing the COVID-19 Pandemic

Alignment of Islamic Banking Sustainability Indicators with Sustainable Development Goals: Policy Recommendations for Addressing the COVID-19 Pandemic

An Analysis of the Indonesian Sharia Banking Development Roadmap 2020-2025

Sharia Risk of Government-Owned Islamic Rural Banks during COVID-19 in Indonesia

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