INCEIF Knowledge Repository (INCEIF University)
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Bank of Maldives appoints new director of Islamic banking
No full textThe Bank of Maldives has announced the appointment of Hassan Kalaam as the new director of Islamic banking in a press release dated the 7th February 2022. Hassan is a licensed Shariah advisor with more than 10 years of experience in the financial services and banking industry. Since joining the bank in 2013, Hassan has played a key role in contributing to the success of the bank's steadily growing Islamic banking arm
COVID-19 and Islamic finance
No full textThe objective of this element is to provide an overview of Islamic finance by highlighting the impact of the pandemic on it in a comprehensive manner by looking at two branches of Islamic finance: Islamic commercial finance; and Islamic social finance. The approach that is adopted in this element is to first provide an overview of Islamic finance to the readers in a simple and easy manner followed by the impact of pandemic discussed separately for both types of Islamic finance. Last, but not least, the element also recommends ways in which Islamic finance could be further improved in the light of the lessons learnt from the pandemic. It is anticipated that the recommendations made in this regard would assist policymakers, practitioners, researchers and other stakeholders of Islamic finance to understand the way to unlock the full potential of Islamic finance to reduce the wealth gap and achieve financial inclusion
Crypto: a 'contagious disease' or the 'most useful system of trust ever devised'? Is crypto halal?
No full textOver the last century, few assets can claim a meteoric rise as cryptocurrency ('crypto') has. Crypto has taken several forms, with rapid innovation and uniquely linked value propositions, which include: a) CBDCs (Central Bank Digital Currencies that are digital versions of local currency); b) Stablecoins (that may be fiat-backed, commodity-backed or algorithm-based), c) the more well-known Exchange Coins (e.g. Bitcoin, Ethereum and Cardano), and d) tokens (security tokens that provide rights, utility tokens that can be redeemed for access to products and services and social impact tokens that provide sustainable or social impact). Except for CBDCs, other cryptocurrencies have had limited applicability or validity as mediums of exchange. They are in fact digital assets based on a version of blockchain protocol, pioneered by Nakamoto in 2009 and offered first through Bitcoin, the 'father' of cryptos
Maldives Islamic Bank declares dividend for the year ended the 31st December 2021
No full textFollowing a meeting held on the 24th April 2022, the Maldives Islamic Bank (MIB), the only fully-fledged Islamic bank in the Maldives, announced in a press release on the 25th April 2022 that its board of directors has recommended a cash dividend of MVR33.48 million (US1.78 million), equating to MVR1.23 (7.93 US cents) per ordinary share as the final dividend for 2020. MIB also disbursed dividends during 2021, in line with MIB's Articles of Association and other applicable laws and regulations. The same report states that in 2021, there were 29,254 securities traded with a total value of MVR1.01 million (US$65,094.5) with 16,160 shareholders as at the 31st December 2021
Role of zakat in responding to COVID-19 pandemic: lessons learnt and way forward
No full textCOVID-19 pandemic has impacted global human lives, killing millions and attacking the real economy to its core. United Nations has called for global solidarity to overcome this unprecedented disaster. Having said that, zakat has been utilized to respond to this ongoing suffering in Muslim countries. This chapter explore zakat utilization for COVID-19 under the shariah perspective and discuss the role of zakat to respond to the pandemic in Muslim countries. A qualitative methodology including conceptual and content analysis is applied to conduct this study. The findings show that most sharia scholars agreed to utilize zakat for the COVID-19 pandemic and endorse advance zakat payment. Moreover, zakat has been disbursed mainly to fulfil basic needs, support emergency health services, sustain education activities, recover economic impact and maintain dakwah programme. The global zakat institutions have also started up the international initiative to respond to this pandemic. This study contributes to the academia on showing how zakat is a conceivable and reliable instrument to give immediate response to this pandemic in Muslim countries. The best practices found in this study are worthy for zakat institutions to continue their programme under this pandemic and be resilient for the next global scale of disasters
Communicated ethical identity disclosure (CEID) of Islamic banks under the AAOIFI and IFRS accounting regimes: a global evidence
No full textThis paper aims to assess the ethical disclosure of Islamic banks (IBs) under different accounting regimes and to ascertain whether the adoption of an Islamic accounting standards (Auditing Organization for Islamic Financial Institutions [AAOIFI]) promotes the practice of ethical disclosure. An ethical identity disclosure index was developed to serve as a benchmark to assess the level of the communicated ethical identity disclosure (CEID) of 47 IBs over 18 countries using annual reports. The findings suggest that, overall, there is poor ethical disclosure practices and even banks that had some initiatives towards disclosures had no proper reference to benchmark for effective implementation of ethical reporting standards and had no plans for ethical and socially responsible schemes. There was no evidence to suggest that IBs that adapted the religious-based accounting regime (AAOIFI) had better levels of ethical disclosure. Though poor practices of CEID are expected to increase reputational risks and the likelihood of loss of religious conscious customers and investors' confidence and therefore market share and performance in the long-term, the current practice does not concur with this expectation. Furthermore, since there is no evidence to support the notion that the adoption of AAOIFI standards would support greater initiatives towards level of ethical identity disclosures, a mandatory requirement for effective disclosure through enforcement of AAOIFI's financial reporting standards, specifically with regard to ethics and social and environmental commitment is needed
Maldives Islamic Bank expands operations to B Atoll
No full textMaldives Islamic Bank (MIB) has expanded its operations to B Atoll, which is the 6th atoll, by launching its 19th ATM at B Eydhafushi on the 6thMarch 2022. MIB has placed an eCRM machine in Eydhafushi and according to MIB, this is the first establishment of its kind based on the digital strategy of the bank
Competition-stability relationship in dual banking systems: evidence from efficiency-adjusted market power
No full textThis research attempts to explore the impact of banking competition on financial stability employing more precise measure of market power. It was found that Islamic banks are less stable and are enjoying lower market power. The analysis shows that higher market competition makes the banking sector vulnerable to defaults, supporting the "competition-fragility view". This research finds no difference in the relationship for Islamic banks indicates that Islamic banks might be involved in traditional banking activities as conventional banks. The results are consistent and robust to different estimation approaches and subsamples. This research carries regulatory and policy implications
Shaping the gig economy in Malaysia: is the Islamic banking industry on track?
No full textThe term gig economy was first coined in 2009 by Tina Brown, the editor-in-chief of the Daily Beast, an online news magazine. At the time of her writing, the world was bearing the brunt of the global economic recession. The ensuing economic woes accelerated the proliferation of gig workers who made a living by taking on on-demand jobs as part-timers, freelancers, independent contractors and project-based workers. Fast forward eleven years to 2020, the economic downturn from massive layoffs and business closures triggered by the COVID-19 pandemic is seeing the spur of worldwide gig economic activities. The widespread use of the Internet and the rise of digital platforms have helped those who lost their jobs to use them to make a living, sparking the popularity and exponential growth of this sector. The gig economy, also dubbed the 'sharing economy', 'collaborative economy', 'digital economy', 'crowd economy', and 'peer economy', is recognised as a new economic source of revenue across the globe and in Malaysia too. With close to four million freelance workers in Malaysia, and increasing by the day, the gig economy forms a key part of the Twelfth Malaysia Plan (2021-2025) (Lim, 2021)
ESG readiness of Islamic banks in Malaysia and ESG risk factors integration in their financing portfolio
No full textSustainable finance involves the practice of integrating environmental, social and governance (ESG) considerations into account in making investment decisions. But little is known about the ESG integration among Islamic banks in Malaysia which leave a gap for this study to investigate. From a survey of 7 respondents from 7 different Islamic banks respondents from both full-fledge and subsidiary Islam banks in Malaysia, it is found that sustainability adoption among Islamic banks in Malaysia is commendable and is at par with the overall financial market but there is still room for improvement on the operations and the oversight functions. The level of awareness is encouraging but Islamic banks are not without their challenges when it comes to implementing ESG within the organisation. In incorporating ESG risk factor into overall Islamic banks' cost of financing, Islamic banks, as well as the conventional counterpart, at this juncture, are taking the soft approach instead of punitive approach by increasing the cost of financing and pricing to the customer through the sustainability risk premium. It is found that the current adoption of sustainability in Malaysia is regulatory driven. Most of the sustainability practices and frameworks in Islamic banks are solely following the directions from BNM guideline and framework. Islamic banks need to take a step back and relook at sustainability as an opportunity to bring Islamic finance to the table to position Islamic banking as the major proponent in environment, social and governance dimension