Al-Shajarah Journal of the International Institute of Islamic Thought and Civilization (ISTAC)
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LEADING TOWARDS IMPACTFUL ISLAMIC SOCIAL FINANCE: MALAYSIAN EXPERIENCE WITH THE VALUE-BASED INTERMEDIATION APPROACH
No full textWith the introduction of Sustainable Development Goals or SDGs in 2015, the notion of sustainability and impactful services give an inspiration to the dual financial services industries in Malaysia. The approaches that are taken by both of Islamic financial services industry (IFSI) and its counterpart conventional financial services industry (CFSI) are almost similar. However, a distinguished approach is introduced by the Central Bank of Malaysia towards IFSI. While Sharīʽah provides holistic objectives in comparison to SDGs, the approach of value-based intermediation (VBI) opens a new pragmatic dimension for IFSI in providing impactful and beneficial services to the public at large. The end results of VBI are placed to reach the holistic objectives of Sharīʽah and in achieving complete sustainability of IFSI. This paper investigates the approach of VBI and its proposed implementation from Sharīʽah perspective. Depending on qualitative investigation, this paper also explores the practices of Islamic banks in applying VBI through Islamic social finance and its impacts. It is found that VBI facilitates Islamic banks to provide impactful services to their customers and other innovative strategies based on Islamic social finance
CATALYSING GLOBAL PEACE THROUGH THE STRENGTHENING OF FORENSIC SCIENCE APPLICATION IN SHARĪ‘AH LAW
No full textOn 1 January 2016, the United Nations (UN) General Assembly promoted peace among the countries in the world through the 2030 Agenda for Sustainable Development Goals (SDGs). The Global Peace Index (GPI) 2018 however shows that such a goal is likely to be affected by the unresolved chaos the world has been experiencing for the past decade, which has brought about a gradual decline of peacefulness. This discussion involves the application of current legislation and how effective the legislation is in contributing to the peace agenda. In countries that practice Sharī‘ah law, previous studies have shown that rejuvenation of the law could play an important role in this matter. Therefore, this study proposes the idea of catalysing global peace through the strengthening of forensic science application in Sharī‘ah law. The qualitative study applies the inductive and deductive approach in obtaining general and specific conclusions from primary and secondary sources. The findings from this study show that forensic science application is relevant to Sharī‘ah law based on precedent shariah cases. This specifically involves Islamic evidence law, civil law, criminal law and criminal procedure code which fulfils some of the suggestions in the UN’s Sustainable Development Goals and the Positive Peace pillars issued by the Institute for Economics and Peace (IEP). It is hoped that the proposed suggestions will catalyse global peace, improve the GPI in the upcoming years and make the 2030 Agenda for Sustainable Development a reality
AN INVESTMENT APPRAISAL OF INTERNATIONAL MARITIME ASSETS FOR MALAYSIAN ISLAMIC FINANCIAL INSTITUTIONS – THE CASE FOR EQUITY FINANCE
No full textThe purpose of this research is to investigate the overall investmentperformance of international maritime assets in order to facilitateIslamic equity finance and investment involving Malaysian Islamicfinance institutions, retail and also institutional investors. Shipping isa strong growth industry with about 84% of global trade carried bythe international shipping industry. The problem is that MalaysianIslamic financial institutions have essentially no exposure and thusunderstanding of international shipping. However, shipping is ahighly capital intensive industry and currently 75% of ship lendinghas been conducted by European banks and financed on aconventional basis. This research involves an investment analysis ofa full population of historical data over a period of 20 years toevaluate maritime performance by adopting IRR, net yield andstandard deviation measures of risk and return. We also develop acorrelation matrix for maritime assets and compare returns to otherreal and financial investments. Our findings reveal that whilstearnings are volatile in comparison to capital market financialproducts, unlevered, tax-free returns on maritime assets are veryattractive. The significance is that Islamic equity finance, rather thandebt at the time-value-of-money should enable the development ofinternational shipping in Malaysia
FUNDAMENTALS, UNIVERSE CREATION AND APPRAISAL OF MAJOR SHARI’AH- COMPLIANT STOCKS SCREENING METHODOLOGIES
No full textThis study will examine and review the existing Shariah-compliantstock screening methodologies and will propose a universal standardShari’ah screening methodology. Apart from understanding thephilosophy, definition, components and functions of Islamic stocks, itis also important to understand the conditions and rules of theIslamic stock market, as well as the universe creation and stockselection, screening process, tolerable level of non-permissibleelements, change of Shari’ah-compliant status, purification process,and periodic and ongoing review of Shari’ah-compliant stocks. Inthis paper, we demonstrate the fundamentals and processes ofShari’ah-compliant stocks and show how world major stock indexproviders create the universes for Shari’ah-compliant stocks. Finally,we examine the similarities and differences of Shari’ah-compliantstock screening in terms of methodologies. Despite all thedifferences and inconsistencies, it is recommended that the relevantauthorities, or index providers, should set a universal standard withclear guidelines and understanding to be applicable to all.Eventually, this universal standard will accelerate the commercialand economic cooperation among Muslim communities around theworld
DOES THE MUTUALITY CONCEPT UPHOLD IN THE PRACTICES OF TAKAFUL INDUSTRY?
Get PDFEven though the development of takaful industry is very encouragingand variety of takaful models have been implemented, the industrystill faces a lot of issues and challenges especially in the Shari’ahand operational matters. This paper discusses the currentdevelopment of takaful industry in Malaysia and highlights the majorissues and challenges in developing a resilient takaful marketespecially in upholding the mutuality and cooperative concept.Interviews with several experts from the takaful industry andacademician from several universities have been conducted to studytheir views on the discussed matters. The study found that existingtakaful models inclined towards more business oriented in order tofulfill the expectation of shareholders. Various issues in existingpractices such as wakalah fee, tabbaru’ issue, ownership of returnand underwriting surplus issues were among the issues that lessenedthe spirit of mutuality in takaful. This paper also found that the majorissues in existing takaful models derived from juristic differenceamong scholars. There are also efforts taken by several parties toharmonize these by going back to the basic of takaful, which arebrotherhood, mutual assistance and cooperation
ISLAMIC FINANCE REGULATIONS IN MALAYSIA: A MACRO MAQASIDIC APPROACH
Get PDFThe research aims primarily to identify the main macro objectives ofShari’ah (macro maqasid) that the regulators are supposed to imbue inthe Acts and guidelines governing Islamic Financial Institutions.Focusing on Malaysia, the research starts with the conceptualframework of Islamic finance regulations, which addresses theobjectives enshrined in the Acts and guidelines promulgated. Afterexposing the overall environment of Islamic finance in Malaysia, theresearch discussed some obstacles of regulations, namely harmonizationbetween Shari’ah and law and its potential impact on the realization ofmaqasid al-Shari’ah. In order to give a glimpse on further obstacles, theresearch briefly discussed the governance framework, the prudentialand risk management regulations, and the Shari’ah standards in termsof maqasid compliance. The research found that the Malaysian expertisein Islamic regulation is very commendable but no free from criticism assome are deemed maqasid non-compliant. More importantly, theresearch delineated the macro maqasid entrusted with the regulators toobserve and imbue in the regulations of Islamic finance. The researchfound that Islamic finance regulations are not completely independentfrom conventional ones, let alone the independence from internationalregulatory regimes and practices. This should call for the propoundingof a theory of maqasid specific to Islamic finance focusing onregulations at macro-economic level. The study recommends theoperationalization of the macro maqasid at the regulatory level firstbefore operationalizing them at the level of Islamic financialInstitutions
FINANCIAL REPORTING DIMENSIONS OF INTANGIBLES IN THE CONTEXT OF ISLAMIC FINANCE
Get PDFPrior studies have identified that not all “intangibles” are reportedas “intangible assets” in the statement of financial position. Thisparticularly concerns the Islamic finance industry where intangiblesare often used as underlying assets in structuring products.Accordingly, this research examines the unique Shari’ahrequirements and the dichotomous views on the validity andpermissibility of intangibles to be recognized as assets. As a result ofan apparent need to re-examine the sufficiency of internationalfinancial reporting standards (IFRS/IAS) and the views of Shari’ahscholars on financial assets, the research is designed to analyse thesufficiency of IAS 38 Intangible Assets with reference to TheConceptual Framework for Financial Reporting of InternationalAccounting Standards Board (IASB). For this purpose, an in-depthinterview, two focus group discussions and a survey of targetrespondents from both academia and industry directly involved inreporting of Islamic financial servicesare carried out. From theengagement session with the Shari’ah scholars, the research hasidentified an alternative view of concern with reference toappropriate Shari’ah rulings to determine the permissibility andvalidity of intangible assets and its reporting implications. Whereas,a mixed response is observed in the survey in terms of clarity onaccounting policy, treatment and disclosures with reference to thetechnicality of the standards as well as the peculiarity of the contextin Islamic finance industry
THE QUEST FOR SUCCESSFUL INTERNATIONALIZATION OF BANGLADESH’S HIGHER EDUCATION: INVESTIGATING THE STRATEGIC LEADERSHIP CHARACTERISTICS OF ACADEMIC LEADERS
No full textThe main purpose of the study is to investigate and determine the underlying factors/constructs of organizational capabilities, personal characteristics of higher education institution administrators and to determine the elements of successful internationalization of higher education institutions in Bangladesh. One thousand and one hundred (1,100) academic leaders were sampled based on two stage multi-stage cluster sampling method. A total of 358 survey questionnaires were successfully returned which were analyzed by SEM statistical tools. The Confirmatory Factor Analysis results showed that organizational capabilities was represented by four distinct factors, personal characteristics represented by three factors, while successful internationalization represented by three factors. The findings implicates the importance of strategic leadership elements endeavors to be focused among the university academic leaders in Bangladesh. The study is considered pertinent particularly in enhancing the strategic leadership literature in Bangladesh’s higher education context
USING THE MANY-FACET RASCH MODEL TO DETERMINE CUTSCORES AND RESOLVE FUNDAMENTAL STANDARD SETTING ISSUES
No full textThis paper illustrates the use of the Many-facet Rasch model and the Objective Standard Setting Method in the construction of cutscores, and in dealing with fundamental standard setting issues. With the proliferation of standardized testing for accountability purposes, the tracking of educational growth within and across nations, and the high-stakes use of educational standards, issues pertaining to the selection of the “right” standard setting method for the construction of defensible cutscores has become more and more prominent. The Many-facet Rasch Model used together with the Objective Standard Setting Method allow for the modeling and adjustment of rater severity in the standard setting process, and facilitate clear and efficient identification of inconsistent judges and misjudged items. However, as with most model-based approaches, a clear understanding of construct theory is imperative to arrive at valid and defensible cutscores and performance standards