Performance of Islamic banks based on <i>maqāṣid</i> al-sharīʿah: a systematic review of current research

Mahyudin, Wan A'tirah; Rosman, Romzie

doi:10.1108/jiabr-10-2020-0337

Cited by 14 publications

(7 citation statements)

References 31 publications

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“…Islamic banks are responsible for ensuring Islamic values are implemented in their goal and vision statements and incorporated into their functions and operations within the company's overall strategy (Kamla & Rammal, 2013). Islamic banks can also represent outstanding financial intermediaries that support fair and equitable financial systems for the entire society (Mahyudin & Rosman, 2022).…”

Section: Discussion and Resultsmentioning

confidence: 99%

Critical Review on Financial Reporting Practices by Islamic Banks: (Comparison between AAOIFI and IFRS)

Perwiragama

Fauziyah²

2022

nurani

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This paper summarizes the findings of a comparative critical examination of the financial reporting methods of Bank Al-Barakah, BTPN Syariah, and Maybank Islamic Berhad. Due to the discrepancy between theory and practice, several past studies have found that Islamic banks need to alter the implementation of their financing facilities. This fact requires clarification. The research employs the quantitative descriptive method and theoretical with secondary data sources derived from literature research, as well as the IASB Conceptual Framework, AAOIFI Conceptual Framework, Resolution 2 of the Sharia Advisory Committee of Bank Negara Malaysia (SAC BNM), Statement of Islamic Financial Accounting Standards (PSAK Syariah), and other related references. The findings of this study indicate that AAOIFI and IFRS interpret the objectives of financial reporting differently. AAOIFI serves sharia principles as an intrinsic component of financial reporting, whereas IFRS implements neutrality of financial reporting from religion or standard components. Overall, the authors of this article maintain that Islamic banks conform to AAOIFI criteria for all of its components, including financial reporting objectives, key accounting assumptions, and SLM-based revenue estimation.

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Section: Discussion and Resultsmentioning

confidence: 99%

Critical Review on Financial Reporting Practices by Islamic Banks: (Comparison between AAOIFI and IFRS)

Perwiragama

Fauziyah²

2022

nurani

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“…Despite the differences in business and regulatory constraints, banks play an essential role in a country's economic system. Despite separating financial and non-financial sectors and differences in capital and liability classifications, (Mahyudin & Rosman, 2022)argue that "the similarities between the capital structure of banks and non-financial companies may be larger than previously thought." They also conclude that differences in capital buffers and regulations may only be of secondary importance when analyzing bank capital structures.…”

Section: Introductionmentioning

confidence: 93%

Capital Structure: Capital Buffer, Return On Equity, Capital Adequacy Ratio In Go-Public Banking In Indonesia

Wahyudin,

Widiyanti,

Andriana

et al. 2024

AJESH

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Banking companies may be faced with adjustment costs (cost of capital adjustment) to obtain optimal capital ratios. These costs arise when banks increase or obtain new external capital so that capital adjustments can lead to excess or shortage of capital which can have a negative impact and cause banks to be reluctant to react quickly when capital shocks occur. This research explores the most significant factors that influence bank capital policy choices in Indonesia. This study examines the financing choices of 8 banks for the 2013-2022 period using panel data regression analysis techniques with STATA.17. The results of the Random Effect Model Estimation research where bank companies in Indonesia have high leverage support the fact that the nature of bank business is different from non-banking companies. The significant negative relationship of the capital buffer is in line with the too big fail theory, packing order theory and agency theory, as well as the Retrun On Equity and Capital Adequancy Ratio variables which have a significant positive relationship at an accuracy level of 85.01%, so in other words banking companies can use debt to finance the company on the basis of agency or managerial policies and strategies, thereby proposing pecking order theory with the assumption that there is information asymmetry and agency costs that are relevant both in the long term.

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“…prohibition of transaction based on interest, uncertainty and speculation or gambling, PLS, depositors’ protection, etc.). In this context, IBs stakeholders attach a special attention to, among others, Shariah compliance activities, which justifies the need for a special CG, namely, the SG framework (Obaidullah, 2005; Mahyudin and Rosman, 2022). To uphold such principles and to mitigate the potential risks due to Shariah noncompliance, SG is required.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Investigating the linkage between Shariah board size, liquidity risk and bank stability through an asymmetric lens

Haddou

Mkhinini

2022

JIABR

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Purpose This paper aims to explore the asymmetric effect of liquidity risk (LR) and Shariah board size on bank financial stability for a panel of Islamic banks (IBs) based in Gulf Cooperation Council (GCC) and Southeast Asian countries over the 2006–2019 period. Design/methodology/approach This paper uses the asymmetric nonlinear autoregressive distributed lag (NARDL) error correction model insofar as it allows assessing not only whether IBs with large boards outperform their peers with reduced boardrooms but also unveiling the potential asymmetries between LR and stability. Findings The findings show that while increasing the number of the Shariah board members does not impact the financial stability of IBs in both the short and long runs its decrease appears to enhance their stability in the long run. The findings also show that a hike, as well as a fall in LR, significantly influences the stability in the long run, which underlines the role that LR plays in bank financial stability. Research limitations/implications A prominent line of future research may consist in extending the country sample to cover more representative full-fledged IBs based on different regions, which allows the breakdown of the sample into GCC-based and non-GCC-based IBs. Doing so is interesting in terms of governance implications. Another extension would consist in considering additional sources of risk to stability. Practical implications IBs should enhance their expertise, which helps them diversify their funding strategy and cater for liquidity solutions. They also must establish a better Shariah governance framework to contain their risk-taking behavior that ultimately contributes to achieving financial stability. Originality/value This paper contributes to the empirical literature in Islamic banking by performing a model that simultaneously accounts for both short- and long-run asymmetries in the relationship between the financial stability of full-fledged IBs, the LR and the size of the Shariah supervisory board.

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Performance of Islamic banks based on maqāṣid al-sharīʿah: a systematic review of current research

Cited by 14 publications

References 31 publications

Critical Review on Financial Reporting Practices by Islamic Banks: (Comparison between AAOIFI and IFRS)

Critical Review on Financial Reporting Practices by Islamic Banks: (Comparison between AAOIFI and IFRS)

Capital Structure: Capital Buffer, Return On Equity, Capital Adequacy Ratio In Go-Public Banking In Indonesia

Investigating the linkage between Shariah board size, liquidity risk and bank stability through an asymmetric lens

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