INCEIF Knowledge Repository (INCEIF University)
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Research on Islamic banking in Malaysia: a guide for future direction
No full textIslamic banking has experienced some success globally, with an annual double digit growth rate (an average of 15% to 20% annually) in the last decade. But to maintain the momentum, the industry has to improve on a number of pertinent aspects. For instance, establishing a common regulatory, legislative, tax, and legal foundation, addressing cost-efficiency and integration issues for all Islamic financial markets in general and the Islamic banking sector in particular. Retrospectively, Malaysia, a rapidly developing vibrant economy has positioned itself as an international hub for Islamic banking and finance. The research interest on Islamic banking in Malaysia has been intensive but on a piece-meal basis, without a comprehensive focus to chart the needed direction to support the government's initiatives to further develop this niche sector. This article takes stock of the past documented research on the Malaysian Islamic banking sector and deliberates on the required future direction
Transformation of idle waqf properties into income generating properties for socio economic development (successful cases worth attention)
No full textPurpose - The main objective of this research is to present the current successful cases in making a revolution reform of the old and idle waqf properties into income generating properties in Muslim and Muslim minority countries. These reforms include providing services to the community, opening jobs for the majority of people, funding small entrepreneurs, educating the mass, taking care of the health of the people, and sheltering the poor and needy in the different countries. Cases under studies are; Turkey, Malaysia, Singapore, Sudan, Indonesia, New Zealand, Kuwait, India, Pakistan and Bangladesh..
Combining the concept of waqf and Islamic tourism to create a sustainable fund to alleviate poverty
No full textThe term universality has many meanings. The Webster Dictionary defines the term as: "of or pertaining to the universe; extending to, including, or affecting, the whole number, quantity, or space; unlimited; general; all-reaching; all-pervading; as, universal ruin; universal good; universal benevolence or benefice." For the purpose of this article, the meaning of universal would be restricted to 'unlimited', 'general', 'all-reaching', and 'all pervading only. The objective of this new concept proposed is to ensure that the universality aspect of Islamic finance is reflected in one concept using different mechanisms used in it. The government of the Maldives, via the Maldives Center for Islamic Finance, is embarked in implementing an innovative concept of Islamic finance that could combine the concept of waqf and Islamic tourism to create a sustainable fund which will be utilized to alleviate poverty. This concept is similar to the story of Robin Hood
An economic theory of Islamic finance regulation
No full textWe argue that regulation can improve the performance of conventional banks up to a limit, but cannot eliminate the inefficiencies resulting from the use of the conventional loan contract. Islamic finance requires complicated and costly procedures compared to conventional finance. Yet, it has significant macroeconomic benefits, which cannot be internalized by individual banks. Therefore, Islamic bankers tend to mimic conventional finance in order to cut costs and maximize short-term profits. Regulation can modify bankers' incentives in order to capture the benefits of Islamic finance
Islamic spirituality, organizational commitment, and organizational citizenship behavior: a proposed conceptual framework
No full textDespite the number of studies conducted on the concept of spirituality in the workplace, the benefits of work-place spirituality within organizations and the associated effects to outcome and performance level, there have been very few research attempts focusing on the religious aspects of spirituality. As such, the present study aims to improve employees' performance by introducing the construct of Islamic spirituality in the workplace and explore its contribution to the overall development of modern organizations. This study proposes a theoretical framework of Islamic spirituality within the workplace and looks at the effect of Islamic spirituality to predictive employee behavior, with particular emphasis on organizational commitment and organizational citizenship behavior (OCB). This research concludes with a call for researchers to empirically examine the link between Islamic spirituality, organizational commitment, OCB, and job performance. This contribution to the body of existing literature aims to strengthen empirical research on the relationship between these constructs
The impact of crude oil price on Islamic stock indices of South East Asian countries: evidence from MGARCH-DCC and wavelet approaches
No full textThis paper is the first attempt at testing the "time-varying" and "time-scale dependent" volatilities of and correlations between the selected Islamic stock indices of South East Asian countries and selected commodities for enhancing portfolio diversification benefits. Consistent with the results of our VECM, our analysis based on the application of the recent wavelet technique MODWT, indicates that the Singapore Islamic index is leading the other Islamic indices and the commodities. From the point of view of portfolio diversification benefits, based on the extent of dynamic correlations between variables, our results suggest that an investor should be aware that the Philippine Islamic stock index is less correlated with the crude oil in the short run (as evidenced in the continuous wavelet transform analysis) and that an investor holding the crude oil can gain by including the Malaysian Islamic stock index in the portfolio (as evidenced in the Dynamic conditional correlation analysis)
Service based contracts used in Islamic finance: a comparison of hawalah, wakalah, and kafalah
No full textThis paper aims to examine the use of service based contracts in Islamic Finance, namely Wakalah, Hawalah and Kafalah. These contracts, though considered secondary to primary contracts such as Musharakah and Mudarabah, are a crucial part of the foundation of Islamic Finance. The differences in each contract will be explained as well as issues on regulations, practices and procedures. Despite the fact that these concepts are widely adopted in Islamic financial products and services, little work has been done in examining the differences and applications in financial institutions. In this paper, the basic principles and rules of service based contracts will be discussed with special reference to their application in modern banking system
Risk-sharing financing of Islamic banks: better shielded against interest rate risk?
No full textIn theory, Risk Sharing-based Financing (RSF) is considered a corner stone of Islamic finance. It is argued to render Islamic banks more resilient to shocks. In practice, however, this feature of Islamic financial products is almost negligible. Instead, debt based instruments, with conventional like features, have overwhelmed the nascent industry. In addition, the framework of present-day economic, regulatory and financial reality inevitably exposes Islamic banks in dual banking systems to problems of conventional banks. This includes, but is not limited to, interest rate risk. Empirical evidence has, thus far, confirmed such exposures, despite Islamic banks' interest free operations. This study applies system GMM in modeling the determinants of RSF, and finds that RSF is insensitive to changes in interest rates. Hence, our results provide support to the "stability" view of risk sharing- based financing. This suggests RSF as the way forward for risk management at Islamic banks, in the absence of widely acceptable Shariah compliant hedging instruments. Further support to the stability view is given by evidence of counter cyclicality. Unlike debt-based lending that inflates artificial asset bubbles through credit expansion during the upswing of business cycles, RSF is negatively related to GDP growth. Our results also imply a significantly strong relationship between risk-sharing deposits and RSF. However, the pass-through of these deposits to RSF is economically low. Only about 40 percent of risk-sharing deposits are channeled to risk-sharing financing. This raises questions on the validity of the industry's claim that depositors accustomed to conventional banking shun away from risk sharing and signals potential for better balance sheet management at Islamic banks. Overall, our findings suggest that, on the one hand, Islamic banks can gain "independence" from conventional banks and interest rates through risk-sharing products, the potential for which is enormous. On the other hand, RSF could enable policy makers to improve systemic stability and restrain excessive credit expansion through its counter cyclical features
Fundamentals of shariah financial planning
No full textThe internationalization of Islamic finance in Europe and other parts of the world spurns us to believe that our Shariah Registered Financial Planner (Shariah RFP) programme is relevant to meet market demands. In Malaysia, Islamic finance is growing exponentially. This new Shariah RFP text module features fully updated information to reflect the current changes in the market sphere. First written by industry leading practitioners in 2008, the work has been further enhanced to correctly reflect the exponential changes Islamic finance has undergone over the recent years as the industry has seen the introduction of many new Islamic financial products in the market place.
Available in physical copy only (Call Number: HG 179 F981
Genuine savings determinants in oil producing countries: the case of OIC oil producing countries
No full textWorld demand for oil and natural gas is driven by economic growth and social development across the globe. According to the U.S Energy Information Administration (EIA, 2016), world oil consumption increased almost fourfold in the last 45 years. As at 1st quarter 2016, It reached 96mb/day (more than 35billion barrels per year) from 86mb/day in 2006. Muslim countries, which include Saudi Arabia, Iran, Iraq, Kuwait, United Arab Emirates (UAE), Qatar, Yemen, Libya, Nigeria, Algeria, Kazakhstan, Azerbaijan, Malaysia, Indonesia, Brunei, are blessed with crude oil and natural gas reserves, making a concentration of the world oil production in the Muslim world ..