Al-Shajarah Journal of the International Institute of Islamic Thought and Civilization (ISTAC)
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THE IMPACT OF SERVICE QUALITY ON MALAYSIAN MUSLIM ISLAMIC BANK CUSTOMERS: SATISFACTION, LOYALTY AND RETENTION
Get PDFWith increasing competition in terms of better services and recent specific requirements for shari’ah compliance, the Islamic banking sector is not only expected to provide a higher standard of quality service, but also to be Shari’ah compliant. Hence it is timely to examine the impact of service quality on customer satisfaction as well as customer loyalty and retention in Islamic banks in Malaysia with the increase emphasis of shariah governance and compliance in the banking industry.A purposive sample of 339 Islamic bank customers with Islamic bank accounts was selected for the purpose of this study. Due to the institutional impediments in direct distribution of survey questionnaires, an online survey to selected respondents was administered. The survey sample includes respondents who are customers with banking accounts of several prominent Islamic banks in Malaysia.The service quality dimensions examined are tangibility, reliability, empathy and responsiveness and analysis of the significant effects of these dimensions on customer satisfaction, customer loyalty and customer retention. Among all these, excepttangibility dimension, show significant impact on customer satisfaction and higher impact on customer loyalty and customer retention. In addition, this is an attempt to analyze the impact of service quality on customer satisfaction, customer loyalty and customer retention. This implies that customer utility experience is expected to result in a longer term relationship with Islamic banks.The findings of this research conclude the significance of service quality as well as its positive significant influence on customer satisfaction as well as higher impact on customer loyalty and customer retention. Hence the study contributes to the further development of studies on service quality, customer satisfaction with loyalty and retention. The social change implication for this research is to increase customer satisfaction and improve services in Malaysian Islamic banks.
CORPORATE GOVERNANCE FOR ISLAMIC BANKING SUSTAINABILITY AND CAUX ROUND TABLE PRINCIPLES
Get PDFCorporate Governance for Islamic Banking Sustainability and Caux Round Table Principles is an attempt to give a balanced view of both Western and Islamic perspectives. The review of the literature, explanations of the verses of the Qur’an that relate to corporate governance (CG) theories and Islamic perspective to it will enrich the field. This paper takes those traditional theories in literature and interprets them from an Islamic perspective, using more international perspectives especially for the Muslim world. Since failure to make profit alone is not enough reason of defaulting corporate entities rather non-compliance of shari’ah and Islamic ethical guidelines and lack of CSR concern is equally important in defining failure
SALE OF GOODS AND SALE OF DEBTS: A COMPARATIVE ANALYSIS
Get PDFIslam clearly identifies not only lawful (halal) activities, but also unlawful (haram) activities as well. Differences of opinion may arise in these two areas too. In order to achieve the ultimate in Islam, we should exercise caution when practicing Islamic finance. In Islamic banking and finance, most of the contracts deal with exchange contracts (al-muawadat) that are essentially trading-based activities. Whereas, conventional banking and finance mainly deals with only one contract involving lending and borrowing activities. Settlement of price consideration can be made on the spot (cash) and on a deferred payment basis (credit sale). However, the credit sale has resulted in a lack of consensus (ijma) amongst jurists regarding the validity of selling a debt to a third party. Injustices (zulm), uncertainty (gharar) and usury (riba) are typically the reasons cited by the jurists in order to support their opinions. This paper will look into the validity of the sale of goods and debt, as well as, the problems associated with these two kinds of sale
ISLAMIC COOPERATIVE: AN ALTERNATIVE TO COMMERCIAL ISLAMIC BANKING
Get PDFThe current Islamic banking model which is based on the concept of commercial banking has been criticized as too rigid and not conducive towards achieving the objectives of an Islamic economy. This paper aims to evaluate the suitability of the cooperative model as an alternative to the commercial banking model and to discern whether the values of cooperative would be more compatible to the ideals of Islam. We find that cooperative shares many of the social and economic values found in the teachings of Islam. When the essence of Islamic finance principles such as free from interest, transparency, and application of profit and loss sharing is combined with the values and principles of the cooperative model, what is created is an efficient, fast growing organization with the potential to greatly benefit its members as well as the society in general
THE FINANCIAL INCLUSION MODEL BASED ON BAITUL MAL WA TANWIL (BMT) COOPERATIVES AND COMMUNITY
Get PDFFinancial inclusion (FI) is a global movement under the world bank programs and Alliance Financial Inclusion (AFI) which is sponsored by the Bill Gates Foundation. The aim of the movement is to ensure that the poor is able to access any financial services. The FI level in Indonesia achieved 32 %; it means 68% are financial transactions excluding the poor, whereas, the average figure in the world is just only 50%. The poverty rate in Indonesia is very high, it is reaching approximately 59%. Hence, FI is an urgent solution for the case of Indonesia. To tackle this issue, the Indonesian government has just started adopting FI by introducing the vision, the mission, and the concept for the efforts taken. The question is to what extent theappropriate model will be applied in Indonesia. There are two models: the AFI global model or top down model and another community model based on local values. There are pros and cons to the above issue. Some proponents have suggested the Islamic microfinance cooperative, i.e., the Baitul Mal Wa Tanwil (BMT) which is the offering of a solution based on its relationship to the poor. They do not agree with the global model. This study therefore attempts to evaluate the models and design the appropriate model for Indonesia which has special characteristics, i.e., cooperation, value driven culture, local wisdom, etc., which is neglected in most studies undertaken so far. This study is based on a qualitative approach done by conducting interviews of the stakeholders, using the deductive method to explore and design the model. This research revealed that the financial inclusion model based on Baitul Mal Wa Tanwil (BMT)-Cooperative is better in terms of flexibility and acceptability when compared to the global model. This is because Indonesia is the largest archipelago in the world with wide distances, diverse cultures, values, customs, and religions. To deal with the distances, wide area, and efficiency issues, the ICT mobile phone should be suitably used. The implementation of the model will strengthen the unity of Indonesia and national issues
THE INTRODUCTION OF THE FINANCIAL OMBUDSMAN SCHEME AS AN ALTERNATIVE TO DISPUTE RESOLUTION IN THE ISLAMIC FINANCIAL SERVICES INDUSTRY IN MALAYSIA
Get PDFWith the enactment of the Islamic Financial Services Act 2013 (IFSA 2013) in Malaysia, the dispute resolution landscape has been transformed to reflect more on effective dispute settlement that would ensure consumer protection without prejudicing the interests of the financial service providers. The Central Bank of Malaysia, as the main regulatory body for the Islamic financial services industry in Malaysia, indicates that the Financial Mediation Bureau (FMB) is in the process of implementing the Financial Ombudsman Scheme (FOS). In analysing this statutory by-product of IFSA 2013, this paper examines the transformation of FMB as a structured statutory body in resolving Islamic finance disputes. In addition, the disputeresolution structure of FMB under the FOS is evaluated and appreciated. A comparative legal analysis is provided in a separate section by examining the structures of other financial ombudsmen as available in other jurisdictions. The examples are taken from other financial ombudsmen practices as applied in selected Commonwealth countries, i.e., Ireland, United Kingdom, and Pakistan
EGYPTIAN INFLUENCES ON MALAYA’S MUSLIM KAUM MUDA (YOUNG FACTION) BEFORE WORLD WAR II
Get PDFThe Kaum Muda (Young Faction) traced its origin from the reformist thought of Rashīd Riḍā who published the journal al-Manār in Egypt. To disseminate their reformist thought, the Young Faction published al-Imām on 23 July 1906, a journal which was directly influenced by al-Manār. Apart from publishing the journal, the Kaum Muda also published books and novels with reformist themes, particularly on the emancipation of woman. Together with the printed media, the Kaum Muda also used the madrasah for modern religious instruction, which was associated with the reformist thought, to spread their ideas and bring progress to Malay society
BUILDING ISLAMIC POLITY WITHIN A SECULAR FRAMEWORK OF POLITICAL ACTIVITY IN EGYPT, TUNISIA AND TURKEY WITH REFERENCE TO IBN KHALDUN’S THEORY OF STATE
Get PDFThe emerging tendency among the proponents of political Islam in Egypt, Tunisia, and Turkey is to create Islamic polity within a secular framework of political activity, that is, they are prepared to share power with secularists and preserve the secular nature of the state. The ruling Islamist parties in Egypt, Tunisia and Turkey argue that the religiously pluralistic model of secularity does not contradict the doctrinal sources of Islamic Law (shari’ah). This study assesses the legitimacy of the religiously pluralistic model of secularity with reference to Ibn Khaldun’s theory of state. In Ibn Khaldun’s frame of civilization, the state is a religious necessity and is purposive, created by men to facilitate attainment of public interest or fundamental human rights ordained by the Law-Giver. This study argues that the religiously pluralistic model of secularity and Ibn Khaldun’s religious state or regime of law focuses on the protection and promotion of divine rights of men. The religiously pluralistic model of secularity will cease to be in line with Ibn Khaldun’s regime of law if it ceases to protect and promote public interest