Traditional Banks Conversion Motivation into Islamic Banks: Evidence from the Middle East

Alani, Farooq; Yaacob, Hisham

doi:10.5539/ibr.v5n12p83

Cited by 10 publications

(8 citation statements)

References 4 publications

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“…Administrative issues, market awareness and acceptance, as well as human resources constraint are the common barriers to converting conventional financial institutes into Islamic model (Alani and Yaacob, 2012). In relation to that, this paper considers the following factors as key determinants to successful conversion of a conventional bank into Shariah-compliant bank: relevant experience, supportive external environment (Islamic capital market and banking law), skilled and committed workforce (qualified human resources and willingness to change).…”

Section: Successful Conversion Of Conventional Banking Into Islamic Bmentioning

confidence: 99%

Analyzing the Impact of Banking laws and Legislations on the Converting of Conventional Banks into Islamic in Libya

Abdalla¹,

Aziz²,

Johari³

2015

IJMAR

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Abstract:This study attempts to examine the moderating effect of regulation on the relationship between the success of converting conventional banks into Islamic lines and four variables: relevant experience, willingness to change, Islamic capital market, and qualified human resources. The sample for the present paper comprises data collected from 15 conventional in Libya. A multi-group analysis approach was applied to assess the moderating effect of regulation. The findings indicated that regulation significantly moderates the effect of four variables on the success of transformation. The paper contributes to the scarce knowledge about regulation and organisational transformation, with an emphasis on converting traditional banks into banks that are in line with the tenets of Shariah.

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Section: Successful Conversion Of Conventional Banking Into Islamic Bmentioning

confidence: 99%

Analyzing the Impact of Banking laws and Legislations on the Converting of Conventional Banks into Islamic in Libya

Abdalla¹,

Aziz²,

Johari³

2015

IJMAR

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“…Iran, for instance, has completely transformed its banking system into Islamic banking, while Libya followed suit in 2013, as reported by El-Brassi et al (2018). Furthermore, several banks in Middle Eastern countries have also undergone conversion to Islamic banks (Alani & Yaacob, 2012), and as have some banks in Bangladesh (Suzuki et al, 2020). The main reason for this conversion trend is that Islamic banks adhere to the principles of alfalah maqashid sharia, as noted by Bakhouche et al (2022).…”

Section: Literature Reviewmentioning

confidence: 99%

“…For example, in Libya, the entire banking system was converted to sharia in 2013, but challenges arose due to the absence of conversion guidelines (El-Brassi et al, 2018). According to Alani and Yaacob (2012), in the Middle East region, the low-risk nature with high profits of Islamic banks is a motive for conversion. In Bangladesh, lower reserve requirements provide an incentive for conventional banks to convert to Islamic banks (Suzuki et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

The impact of conversion on market share in Indonesian Islamic banks

Arif

Ihsan

Zulpawati³

et al. 2023

Banks and Bank Systems

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The process of converting a conventional bank into a fully-fledged Islamic bank is becoming a popular alternative solution, alongside spin-off, for smaller banks. Two Indonesian banks, Bank of Aceh Sharia and Bank of NTB Sharia, completed this conversion in 2016 and 2018, respectively. This study uses a mixed-methods approach to examine the impact of this conversion on market share, using both quantitative regression with a dummy variable and qualitative analysis through focus group discussions with executive management and in-depth interviews with the Sharia supervisory boards of the two converted banks. The study found that the conversion positively impacted market share, with the default rate and level of capital also playing a role. Prior to conversion, the Indonesian sharia banking industry had less than a 5% market share, but after the conversion, it reached 6.7%. The two converted banks were able to increase their market share to 7% and 2%, respectively. These results suggest that converting into a full-fledged Islamic bank is a viable alternative solution for smaller conventional banks, rather than opting for spin-offs or mergers.

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“…Moreover, the phenomenon of traditional banks turning into Islamic form was reinforced by the success of these banks averting the recent world economic crises (Alani and Yaacob, 2012).…”

Section: Expected Benefits To the Local And Global Economiesmentioning

confidence: 99%

Gambling-free lottery, a new Islamic lending ticket

Hassanat

tarawneh

2015

Journal of Islamic Accounting and Business Research

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Purpose – This paper aims to present a new Islamic product called gambling-free lottery, which is inspired by ideas of Musharakah, Takaful and Al-qard Al-hasan, where the winner of the lottery receives the prize as an interest-free loan, and buyers of tickets get their money back after the winner’s repayment of the loan. Design/methodology/approach – The paper reports the religious opinions of three Islamic scholars who were interviewed for the purpose of this study. The results of a questionnaire to survey the mood of 430 persons about the new product are also reported. Findings – The paper concludes that although the proposed product is still at an exploratory stage and not a definitive product acceptable to all Muslim society, it could be a successful Islamic financial product, provided that it was put into practice with some modifications to accommodate all Islamic views. Research limitations/implications – Main limitations of this study are the number of Islamic scholars interviewed does not reflect all the Islamic views regarding the new product and the lack of more information about the religious side of this type of product. Originality/value – By introducing such a product, the gambling-free lottery could become not only a means of credit provision but also a new method of playing a “game” while lending money to someone who is more likely to be poor. Converting the poor into the rich could overcome many problems, particularly in poor countries.

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Traditional Banks Conversion Motivation into Islamic Banks: Evidence from the Middle East

Cited by 10 publications

References 4 publications

Analyzing the Impact of Banking laws and Legislations on the Converting of Conventional Banks into Islamic in Libya

Analyzing the Impact of Banking laws and Legislations on the Converting of Conventional Banks into Islamic in Libya

The impact of conversion on market share in Indonesian Islamic banks

Gambling-free lottery, a new Islamic lending ticket

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