scholarly journals FEASIBILITY OF BAY SALAM FINANCE: A SURVEY OF THE OPINIONS OF STAKEHOLDERS

2018 ◽  
Vol 6 (1) ◽  
pp. 001
Author(s):  
Muhammad Tahir Manoori ◽  
Atiq-ur-Rehman Atiq-ur-Rehman ◽  
Muhammad Jamil ◽  
Muhammad Ishfaq
Keyword(s):  
Financial Institutions ◽  
Urban Areas ◽  
Formal System ◽  
Survey Questionnaire ◽  
Islamic Banks ◽  
Livestock Farming ◽  
Agriculture Sector ◽  
Islamic Financial Institutions ◽  
Spss Software

The present study aims to explore the potential application of Bai Salam (forward sale agreement) as substitute financial instrument in the agriculture sector of Pakistan. The conclusion is drawn through a survey questionnaire from 300 farmers and bankers in a district of Punjab. For analysis, we use SPSS software and presented the results by using descriptive methods. This study overall concludes the banker’s and farmer’s awareness, willingness, risks, hurdles and the role of institutions in the Salam promotion. The majority of the farmers are not aware of the Salam contract because the Islamic bank’s branch network is limited to urban areas and there is no proper promotion campaign launched by the Islamic banks for awareness about Salaam among the farmers. Bankers are reluctant to finance the tenants, orchards due to more operational risk for the bank. Bankers opinion that small farmers do not have personal securities which is not a solid reason because half of the sampled farmers take a loan from the formal system if they can provide securities to conventional interest-based institution why they can’t provide securities to Islamic financial institutions? There is a vast market for the Islamic Banks if they sincerely pay their attention towards forward sale contracts. The concept applies to all areas of agriculture and livestock farming to overcome financing problems and boost production. 

Sharia Compliant in Private Zakat Institutions of Riau

2020 ◽  
pp. 429-442
Author(s):  
Devi Megawati
Keyword(s):  
Financial Institutions ◽  
Supervisory Board ◽  
The Body ◽  
Islamic Banks ◽  
Body Of Knowledge ◽  
Islamic Financial Institutions ◽  
Primary Reference

This study aims to understand the role of Sharia Supervisors in the private Zakat Institution (LAZ) as well as other aspects of sharia compliance, such as Zakat fatwa on the perspective of Zakat officers. According to Decree of the Minister of Religion Number 333 / 2015 that LAZ as register must have a sharia supervisor. Sharia compliance of an institution could rely on the role of the sharia supervisory board (SSB). Some literature discussing this topic is still dominated study on Islamic financial institutions (IFIs), especially in Islamic Banks. Therefore this article will contribute to the body of knowledge, especially in the zakat literature. Data were gathered from five presiding officers of private zakat institutions in one province in Indonesia which consists of three presiding officers from provincial LAZ representative and two presiding officers from LAZ district. The study found that Sharia compliance in LAZ had many weaknesses such as lack of sharia control by sharia supervisors, a member of the sharia supervisory board who does not follow the latest issues about Zakat or the absence of competency requirements to be a sharia supervisor at LAZ and also did not make Zakat fatwa issued by MUI as the primary reference by zakat officer. This information will be useful for stakeholders, including supervisory authorities and regulators.

scholarly journals Shar¯ı‘ah Resolution and Islamic Finance: A Review

2021 ◽  
Vol 11 (01) ◽  
pp. 29-39
Author(s):  
Zakir Hossen Shaikh ◽  
◽  
Adel M Sarea ◽  
Abdelrahman Al-Saadi ◽  
Iqbal Thonse Hawaldar ◽  
...  
Keyword(s):  
Financial Institutions ◽  
Qualitative Method ◽  
New Products ◽  
Detailed Examination ◽  
Central Banks ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Legal Response ◽  
Islamic Financial Institutions

Purpose: The purpose of this study is to look into the Shar¯ı‘ah resolution framework in Islamic finance and see how it may be improved. This paper is based on a detailed examination of previous research into the need for a worldwide Shar¯ı‘ah Resolution mechanism to be applied across all IFIs. Methodology: A detailed analysis of past studies on the necessity of a Shar¯ı‘ah Resolution framework to be implemented globally by all IFIs was used to develop the qualitative method. Findings: Measuring the level of fatwá disclosure by specific Islamic banks through central banks Shar¯ı‘ah judgements will add to the existing literature while also filling a gap. Significance: This study is noteworthy because it lays the framework for future researchers on the topic. Using a central bank to assess the extent to which certain Islamic banks have disclosed fatwá. Limitations: These articles’ implications may aid in the explanation of Shar¯ı‘ah-related concerns in Islamic finance. Shar¯ı‘ah resolution in Islamic finance will be a significant Shar¯ı‘ah resource for new products supplied by Islamic financial institutions, as well as any existing goods given to new clients and industry practitioners. Implications: The fatwá is the legal response to the present difficulties that have arisen in the community. fatwá are used to disseminate knowledge to Muslims in order to alleviate their difficulties and misconceptions. Any fatwá-related knowledge will have an impact on individuals, societies, and organizations . As a result, this paper examined the role of fatwás in sharing information and determining how far fatwás can educate society in resolving problems.

scholarly journals NON-SHARIAH COMPLIANCE OF ISLAMIC BANKS AND CUSTOMERS COMMITMENT: TRUST AS MEDIATOR

2021 ◽  
Vol 3 (8) ◽  
pp. 28-36
Author(s):  
Muhammad Usman ◽  
Anwar Allah Pitchay ◽  
Munazza Zahra
Keyword(s):  
Financial Institutions ◽  
Quantitative Approach ◽  
Islamic Banks ◽  
Islamic Financial Institutions ◽  
The Impact ◽  
The Relationship

The purpose of this paper is to find out the impact of non-shariah compliance (NSC) of Islamic banks on the commitment of the customers and the role of trust as a mediator. The paper uses a quantitative approach by using surveys to collect data from 276 respondents. Smart PLS was used to run the analysis. Non-compliance of Islamic financial institutions with shari’ah principles significantly affects the commitment of the customers. Results of this showed that trust significantly impacts the commitment of the customers, study also indicated that trust mediates the relationship between the commitment and no-shari’ah compliance.

scholarly journals Collecting Fees for Safekeeping of Collateral: Rules and Applications in the Contemporary Islamic Financial Institutions

2020 ◽  
Vol 9 (1) ◽  
pp. 50-53
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Market Price ◽  
Point Of View ◽  
Actual Cost ◽  
Islamic Banks ◽  
Maturity Date ◽  
Islamic Financial Institutions

The study aims to examine the Shari’ah legality of whether pledgor or pledgee should take care of collateral (marhun) during the period of the loan. Moreover, the study seeks to provide possible applications for the pledge (rahn) and clarify Shari’ah rules for each application. Malaysian Islamic banks apply pledge products by offering loans (qardh hasan) to the customers and requesting gold assets as collateral against a loan. The banks charge safekeeping fees to keep the gold until the maturity date of the loan. This practice combines loan and sale contracts in a single transaction. Accordingly, the study seeks to evaluate this practice from an Islamic point of view. Islamic law categorizes loans under charity contracts while the sale is categorized under contracts of exchange (mu’awadhat). The nature of the two contracts is different. Therefore, the study examines categories that combine loans and contracts of exchange in one transaction. The results reveal that it is not permissible for the pledgee to charge fees higher than market fees for the keeping of collateral. Charging fees that are higher than the market price is considered riba. According to Shari’ah rules, any kind of benefit derived from a loan is riba and thus it is prohibited. However, charging fees that are comparable to the market price and cover the actual cost for safekeeping of collateral is permissible. According to Islamic Fiqh Academy resolutions and AAOIFI standards, Islamic banks may charge fees for safekeeping of gold collateral considering that fees should be to the market fees and should only cover actual expenses.

scholarly journals AKAD MURĀBAḤAH; KONSEP DAN PELAKSANAAN DI LEMBAGA KEUANGAN ISLAM MODERN

2020 ◽  
Vol 1 (1) ◽  
pp. 88-102
Author(s):  
Ahmad Maulidizen
Keyword(s):  
Financial Institutions ◽  
Islamic Banks ◽  
Purchase Price ◽  
Short Term ◽  
Significant Growth ◽  
Library Research ◽  
Islamic Financial Institutions ◽  
The Cost ◽  
Number Of Customers ◽  
Risk Dependency

ABSTRACTIslamic banking in Indonesia has experienced significant growth, including assets, financing providedand the number of customers. Murābaḥah is the sale and purchase of goods at the original price with theagreed-upon profit. In murābaḥah the seller must tell the cost of the product he buys and determine anadditional level of profit. This research is a library research about the murābaḥah contract according tomuamalah fiqh and its application in modern Islamic financial institutions. Methods of collecting data indocumentation and various sources related to the murābaḥah contract are then analyzed inductively anddeductively. The results of the study are the murābaḥah foundation is the principle of buying and sellingwith a deferred payment system. Murābaḥah, as used in Sharia banking, is based on two main elements,namely the purchase price and related costs, and the agreement on mark-up (profit). Islamic banks adoptmurābaḥah to provide short-term financing to customers for the purchase of goods even though thecustomer does not have the money to pay. The murābaḥah financing portfolio in Islamic banks reaches 70-80%, but in practice there have never been any problems, including; collateral which is a problem of fiqh,risk dependency as a problem of the bank, bankruptcy and delay in payment are the problems of customers,and profits are too high, namely the problem of coming from the community. Therefore, Islamic banks mustmake improvements in the implementation to be in accordance with Sharia.Keyword : Murābaḥah, Financing Instruments, Modern Islamic Financing

scholarly journals FRAMING THE SOCIAL RESPONSIBILITY ROLE OF ISLAMIC FINANCIAL INSTITUTIONS WITHIN A THREE-SECTOR ECONOMIC MODEL

2019 ◽  
Vol 7 (1) ◽  
pp. 180-188
Author(s):  
Mohd Nizam Barom
Keyword(s):  
Social Responsibility ◽  
Social Welfare ◽  
Financial Institutions ◽  
Economic Model ◽  
Third Sector ◽  
Welfare Provision ◽  
Integrative Framework ◽  
The Social ◽  
Islamic Financial Institutions

Purpose: This paper examines and reflects the ongoing debate on the social responsibility role of Islamic financial institutions (IFIs) in the light of the literature in the area of third sector and three-sector economic model. Subsequently, it seeks to develop a framework that can be used to conceptualise the potential interaction between the different sectors in the economy in relation to social welfare issues and locate the social responsibility role of IFIs within this framework.    Methodology: The paper uses an integrative analysis of Islamic finance and third sector literature, particularly on the American and European conceptions of the interactions between the three main sectors in the economy, i.e. public, private and ‘third’ sectors. Results: The paper develops a modified circular flow of income and expenditure model as a basis for the integrative framework for social welfare provision within a three-sector economic model. Subsequently, it locates the social responsibility role of IFIs within this framework with the understanding that social welfare burden is a collective responsibility and therefore shared among the various potential welfare providers in the economy.  Implications: The integrative framework of social welfare provision within a three-sector economic model as conceptualised in this paper highlights a multi-institutional approach towards promoting socio-economic justice and society's well-being in an Islamic economy, and hence provides a proper and reasonable context for social responsibility roles expected of IFIs.

scholarly journals PERAN PEMBIAYAAN MURABAHAH DALAM MENINGKATKAN USAHA BATU BATA (STUDI PADA BMT AS-SALAM KANTOR KAS NGERECO KANDAT KEDIRI)

1970 ◽  
Vol 5 (1) ◽  
pp. 64-76
Author(s):  
Muh Khoirul Anam ◽  
Haris Santoso
Keyword(s):  
Financial Institutions ◽  
Case Study Research ◽  
Lower Class ◽  
Qualitative Approach ◽  
Study Research ◽  
Islamic Financial Institutions ◽  
Conventional Banks ◽  
Depth Interviews

Financial institutions are currently needed by all people because financial institutions are considered to be quicker in providing business capital loans. Previously, conventional banks were the only financial institutions operating in the financial sector or loans to the community before Islamic financial institutions, now with the development of financial institutions sharia society mostly prefers sharia finance rather than conventional, plus BMT which operates in the middle to lower class, this is what causes many people to take Islamic financial institutions because they prioritize family systems, so this study focuses on: 1). How is the application of murabahah financing at BMT As-Salam to brick businesses in the Ngreco Kandat Kediri village, 2). What is the role of murabahah financing at BMT As-Salam towards brick business in the Ngreco Kandat Kediri village, 3). How did the brick business increase in the Kandat Kediri Ngreco village after obtaining murabahah financing at BMT As-Salam. Research on the role of murabahah financing in brick business uses a descriptive qualitative approach with a type of case study research that refers to the interpretive postpositivistic thinking paradigm. The technique of collecting data is in-depth interviews, observation and documentation. The results of this study indicate that the application of murabahah financing at BMT As-Salam is very different where loans for business capital of bricks that should use mudharabah or musyarakah at BMT These salads use murabaha. Besides that the role of BMT As-Salam is very influential on brick business and before BMT As-Salam arrived, brick entrepreneurs still had difficulty finding capital to improve their business but after taking murabahah financing at BMT As-Salam, their efforts experienced an increase and prosperity life.

scholarly journals Drivers of Ar-Rahnu (pawn) acceptance: Malaysian evidence

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hassanudin Mohd Thas Thaker ◽  
Ahmad Khaliq ◽  
Mohamed Asmy Bin Mohd Thas Thaker ◽  
Anwar Bin Allah Pitchay ◽  
K. Chandra Sakaran
Keyword(s):  
Financial Institutions ◽  
Perceived Risk ◽  
Credit Card ◽  
Social Factor ◽  
Partial Least Square ◽  
The Body ◽  
Least Square ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Financial Institutions

Purpose The purpose of this paper is to examine the factor persuading the acceptance of Islamic pawn broking (Ar-Rahnu) among Islamic bank customers. Design/methodology/approach The authors collected the data using a self-administered questionnaire design and analysed using SPSS Statistics and smart partial least square. The study is restricted to only respondents who are based in the area of Klang Valley (Selangor and Kuala Lumpur), as these two areas have a larger number of Islamic banks and a decent number of Islamic banks’ clients. A total of 381 respondents’ responses are used for this study, and the constructs involved for analysis purpose are affect, social factor, facilitating conditions, perceived financial benefits and perceived risk constructs. Findings The finding suggests a significant positive association for social factor and perceived risk, while negative association learnt for affect on acceptance of Ar-Rahnu financing. On the same note, the facilitating condition and perceived financial benefit are found insignificantly related. Practical implications The findings generated from this study are expected to enrich the literature on the body of knowledge, as it has served to broaden the understanding of the Ar-Rahnu acceptance level in Malaysia. As mentioned, there is limited literature available using this type of financing. Existing studies focus too much on conventional financing products such as personal financing, credit card, short-term loan and many others. Less attention is given to Ar-Rahnu financing. Thus, this study expected to add value to the literature available in the context of Islamic pawn broking business. Moreover, the findings of this study will be very helpful for the Islamic financial institutions to find the best way to retain Ar-Rahnu clients and encourage more client to choose Ar-Rahnu as a mode of financing. Originality/value This study owns greater potential to assist Islamic financial institutions to discover the best techniques to retain and encourage the grander number of clients for Ar-Rahnu as a mode of financing.

Corporate governance and compliance with AAOIFI governance standards by Islamic banks

2020 ◽  
Vol 13 (5) ◽  
pp. 891-918
Author(s):  
Yosra Mnif ◽  
Marwa Tahari
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Audit Committee ◽  
Annual Reports ◽  
Islamic Banks ◽  
Content Type ◽  
Disclosure Requirements ◽  
Financial Expertise ◽  
Islamic Financial Institutions ◽  
Research Stage

Purpose This study aims to examine the effect of the main corporate governance characteristics on compliance with accounting and auditing organisation for Islamic financial institutions’ (AAOIFI) governance standards’ (GSs) disclosure requirements by Islamic banks (IB) that adopt AAOIFIs’ standards in Bahrain, Qatar, Jordan, Oman, Syria, Sudan, Palestine and Yemen. Design/methodology/approach The sample consists of 486 bank-year observations from 2009 to 2017. Findings The findings reveal that compliance with AAOIFIs’ GSs’ disclosure requirements is positively influenced by the audit committee (AC) independence, AC’s accounting and financial expertise and industry expertise, auditor industry specialisation, IB’s size and IB’s listing status. On the other hand, it is negatively influenced by the ownership concentration. Research limitations/implications This study has only examined compliance with AAOIFI’s GSs’ disclosure requirements and has focussed on one major sector of the Islamic financial institutions (which is IB). Practical implications The findings are useful for various groups of preparers and users of IBs’ annual reports such as academics and researchers, accountants, management of IBs and some organisations. Originality/value While the study of the AAOIFIs’ standards has grown contemporary with considerable contributions from scholars, however, the majority of these studies are descriptive in nature. Indeed, the existing literature that has explored the determinants of compliance with AAOIFI’s standards is in the early research stage. To the best of the knowledge, there is a paucity of empirical research testing this issue.

scholarly journals The Regulation of Islamic Finance in the United Kingdom

2010 ◽  
Vol 13 (1) ◽  
pp. 69-77 ◽  
Author(s):  
Jonathan Ercanbrack
Keyword(s):  
United Kingdom ◽  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Financial Industry ◽  
Religious Dimension ◽  
The United Kingdom ◽  
Islamic Financial Institutions

This article examines the unique risks associated with Islamic financial institutions and the secular state's reticence to directly regulate their religious dimension. It argues that the state's method of regulating the Islamic financial industry ignores special reputational risks associated with the religious and cultural distinctiveness of Islamic banks.

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