Halal Certification for Financial Products: A Transaction Cost Perspective

Hayat, Raphie; Butter, Frank Den; Kock, Udo

doi:10.1007/s10551-012-1534-9

Cited by 33 publications

(14 citation statements)

References 33 publications

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“…3. Hayat et al (2013) highlight the costs in time (two to three months) and in money required for a product to be certified as in line with the Sharia law.…”

Section: Notesmentioning

confidence: 94%

Does corporate governance affect the performance and stability of Islamic banks?

Mamatzakis

Alexakis

Yahyaee

et al. 2023

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Purpose This paper aims to investigate the impact of corporate governance practices on cost efficiency and financial stability for a sample of Islamic and conventional banks. In the analysis, the author uses a set of corporate governance variables that include, the board size, board independence, director gender, board meetings, board attendance, board committees, chair independence and CEO characteristics. Design/methodology/approach The author uses corporate governance data of Islamic banks that is unique in this field. In the analysis, the author also uses stochastic frontier analysis and panel vector autoregression models to quantify long-run and short-run statistical relationships between the operational efficiency of Islamic Banks and corporate governance practices. Findings According to the results, Islamic and conventional banks exhibit important differences in the effects of corporate governance practices on cost efficiency and financial stability. Results show that with a blind general adoption of corporate governance practices, Islamic banks may suffer a loss in their value since the adoption of the third layer of binding practices, over and above the already existing ones, imposed by the Sharia Board and the Board of Directors, may lead to cumbersome business operations. This conclusion is of importance to Islamic Banks since they struggle to survive in a very competitive international environment. Practical implications The author believes that the results may be of a certain value to regulators, policymakers and managers of Islamic banks. Based on the results, the author postulate that Islamic banks should select carefully international corporate governance practices. Social implications Islamic banks should not adopt additional third layer of binding practices as that would result lower performance and instability that would be damaging for the economy Originality/value This study employs a unique sample of Islamic banks that includes corporate governance data hand collected. Our findings of the corporate governance impact on Islamic banks performance and stability are therefore unique in the literature.

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“…3. Hayat et al (2013) highlight the costs in time (two to three months) and in money required for a product to be certified as in line with the Sharia law.…”

Section: Notesmentioning

confidence: 94%

Does corporate governance affect the performance and stability of Islamic banks?

Mamatzakis

Alexakis

Yahyaee

et al. 2023

View full text Add to dashboard Cite

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“…The advocates of Islamic finance note that services offered by Islamic financial institutions are not exclusive to Muslims; other customers may be attracted by the ethical standpoint of Islamic finance (e.g. Hayat et al, 2013;Sole, 2007).…”

Section: Evolution Of Modern Islamic Financementioning

confidence: 99%

“…Advocates of Islamic finance claim that Islamic retail banking has the potential to reach mass-market status (see for instance, Bousama, 2009;El-Hawary et al, 2007;Hayat et al, 2013;Karim & Archer, 2002;Kasri, 2009). However, in the context of the UK, it has still so far failed to do so despite the number of banks increasing.…”

Section: Introductionmentioning

confidence: 99%

An Empirical Investigation of the Regulatory and Non-Regulatory Challenges of the UK Islamic Retail Banking

Benamraoui¹,

Boukrami

Dafgard³

et al. 2020

J. Islam. bus. manag.

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The paper examines the regulatory and non-regulatory challenges facing the growth of Islamic retail banking in the UK. Our analyses reveal that policy-makers and regulators in the UK have taken many actions to encourage the growth of Islamic finance. However, despite the suitable regulatory environment, UK Islamic retail banks have so far failed to convince consumers of the credibility of their services due to the questionable structure of their products. Intriguingly, the current system of Sharī'ah assurance is perceived to have several weaknesses which could perhaps lead to ambiguity, confusion and loss of credibility in the eyes of consumers. Our findings also reveal several key religio-ethical considerations. In particular, we highlight that the future of UK Islamic retail banking is bleak unless these issues are urgently tackled by creating a more transparent Islamic banking system and improving the current structure of Sharī'ah-compliant products to preserve the expected ethical and societal legitimacy of Islamic banks.

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“…Such costs can be reduced through a halal certification process that is available in many predominantly Muslim countries through a cohort of Shari'a scholars. As Hayat et al (2013) observed, there is a well-established system of standard-setting bodies in Islamic finance, centered primarily in Bahrain and Malaysia, which make it possible to assess and rate the extent of Shari'a compliance of financial products.…”

Section: Increased Trade Between Western and Predominantly Muslim Coumentioning

confidence: 99%

Should Western Corporations Ban the Use of Shari’a Arbitration Clauses in their Commercial Contracts?

Spalding

Kim

2014

J Bus Ethics

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In recent years, there has been an increase in the adoption of Shari'a in Europe and North America as an arbitration protocol for the resolution of potential contractual disputes. In a largely secular Western business environment, this reality raises corporate policy implications for business organizations. In particular, questions are raised about whether Shari'a is by nature too unpredictable-and too dismissive of women's rights-to be properly and ethically permitted by Western companies as a possible dispute resolution alternative. This article examines the dynamics and factors that are involved as corporate managers decide whether Shari'a arbitration ought to be banned entirely from contractual negotiations. Arguments for and against the inclusion of a Shari'a arbitration clauses in commercial contracts and contract negotiations are presented. The article concludes that while managers should exercise great prudence and consider the moral implications of negotiating arbitration clauses, an organizational ban of the use of faith-informed arbitration generally, or Shari'a in particular, would be neither morally required nor optimally serve the interests of the organization or its stakeholders.

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Halal Certification for Financial Products: A Transaction Cost Perspective

Cited by 33 publications

References 33 publications

Does corporate governance affect the performance and stability of Islamic banks?

Does corporate governance affect the performance and stability of Islamic banks?

An Empirical Investigation of the Regulatory and Non-Regulatory Challenges of the UK Islamic Retail Banking

Should Western Corporations Ban the Use of Shari’a Arbitration Clauses in their Commercial Contracts?

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