1,720,992 research outputs found
Sukuk: Definition, Structure and Accounting Issues
Full text linkRecent innovations in Islamic finance have changed the dynamics of the Islamic finance industry especially, in the area of sukuk or Islamic securities. Sukuk have become increasingly popular in the last few years, both as a means of raising government finance through sovereign issues, and as a way for companies to obtain funding through offering corporate sukuk. In this paper an attempt is made is to define sukuk and show the structure of sukuk. Furthermore, the paper shades some light on some accounting risk issues of sukuk. Finally, the paper presents benefits of sukuk for shareholders. However, this paper is a humble attempt to explain certain issues of sukuk. Certainly, for further information about sukuk, there are many publications that may assist the reader to derive the knowledge about sukuk.Sukuk, structure, recognition, measurement and risk
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
Do market structures, ownership, and risks matter for profitability and shareholders' value of Islamic banks in the GCC region?
No full textThis research aims to examine the relationship between Islamic banks' profitability and shareholders' value with the market structures, ownership structures, and financial risk factors, and to test for any differences in these performances between the Islamic and conventional banks. The impacts of both market and ownership structures and financial risks of banking performance is recognized globally and critical for the banking industry. The market and ownership structures are considered pertinent as they indicate competitive environment in which banks can lower costs, extend access to finance, and build effectiveness while garnering impacts of the financial risks will promote financial stability. In addressing the research questions and research objectives this study utilized balanced panel data of a sample of 60 commercial banks out of which, 17 are Islamic banks from the GCC countries during 2003-2015 periods. Four models were formula ted and estimated for each performance indicator using the PCSEs technique based on the results of diagnostic tests ..
An examination of factors affecting excess liquidity problem of Islamic banking in Malaysia
No full textAfter the global financial crisis, liquidity management has been a great concern to both Islamic and conventional banks, as liquidity management is linked to the bank's profitability and overall sustainability of financial system. While shortage of liquidity has taken centre-stage in Basel 3 reforms as a consequence of the US subprime loan crises, the problem of excess liquidity in Islamic banking remains unresolved in view of the lack of product offerings like medium term sukuk that should give relatively higher yields than short-term Islamic securities ..
Determinants of perceptions of Islamic banks' performance: an analysis of the imbalance in the development of Islamic banks in Sudan
No full textThis imbalance nature of Islamic bank's performance is of great concern, which motivates this research, which is to examine the determinants of the imbalance of the imbalance nature of Islamic banks' performance in Sudan. In doing so, it seeks to fulfill three main objectives, namely examining the imbalance nature of Islamic banks' performance in Sudan, examining the awareness of the policy makers and the Islamic banks' managers to this imbalance nature, and to investigate its determinants ..
Financial exclusion in Kabul, Afghanistan: why people refuse or unable to use the banking system
No full textThe first objective of this study aims to investigate the current status of financial inclusion and the second research objective aims to study the determinants of populations' refusal or inability to participate in banking system. The qualitative approach is used for the first research objective whereas quantitative technique is used to address the second objective. For the purpose of quantitative approach, primary data was collected through survey questionnaires from financially excluded population (individuals without a bank account or having only salary account) in Kabul province to answer the hypotheses outlined for this study. The data was analyzed using Structural Equation Modeling to determine the factors that contributed to financial exclusion ..
Ethical issues in profit rate charges in Islamic debt financing with special reference to Islamic personal financing product in Malaysia
No full textIn past thirty years, Islamic banking has established itself in the global market as an alternative method of financing to interest-based financing. Most of Islamic financing products are formulated on debt financing contract such as murabaha and tawaruq contracts where elements of interest, ambiguities, gambling and impure commodities are duly avoided. While these contracts have complied with the fundamental principle of the Shariah, less attention is accorded to the pricing aspect of the contract especially in the setting of finance charges, namely profit rates on the facilities. While regulatory murabaha Shariah parameter defined the selling price of murabaha as a sum of the cost of purchase and profit margin, less study is attempted on the latter. Claims of exorbitant profits charged by Islamic banks have been voiced by various parties including consumer associations are not without basis. The first objective of this study is to examine and confirm the claims made by the consumer groups. This study has confirmed that the complaints have been true where Islamic banks were found to use the monthly profit rate compounding system as well as the flat rate method which have contributed to the questionable increase in profits earned by the banks. In the former, the effective profit rates (EPF) are found always higher than the quoted profit rates (QPR) while in the latter the use of flat rate method (FRM) over the reducing balance method (RBM) where both of these practices have increase banking profits at the detriment of customers. This study considers this case as an ethical issue as no clear guideline on this matter is accorded by the regulator in the murabaha Shariah parameter
Ethical choice in Islamic banks; incorporating Al-Ghazali's ethical philosophy - a structural equation modeling approach on United Arab Emirates (UAE)
No full textWhile ample emphasis has been given to the juristic (fiqh) aspects of Shariah compliance in Islamic banking and finance, relatively little has been attempted to explore its ethical dimensions (akhlaq) in the compliance parameters. Further, Shariah compliance has been product centric rather than people-centric. This is evident in view of recurring unprincipled events reported in the Islamic banking and finance industry where its ethical standing is under public scrutiny. Given this undesirable circumstance, this study intends to examine the factors determining decision-making behaviour in Islamic banking related to ethical issues as defined by the Ferrell and Gresham (1985) contingency model as well as factors that are religious in nature as encapsulated in Al-Ghazali's ethical philosophy. The first objective of the study is to develop a "synthesized conceptual model", which incorporates selected aspects of Al-Ghazali's ethical philosophy into the Ferrell and Gresham (1985) contingency model. The second objective of the study, which is an empirical examination of factors influencing 'decision-making behaviour related to ethical issues' is conducted based on newly 'synthesized conceptual model'
Determinants of profit rates in true sale-based Islamic financing: a case study of Malaysia
No full textThe fundamental principle of true sale is based on the ownership state of the subject matter of sale where the selling party must own the asset legally and keep full ownership of the goods before making the sale. In the riba-free system, the Islamic bank assumes a role of a trading entity. It undertakes a trading position and exposes itself to business risk as the asset is booked on its balance sheet. It follows that the profit rate it charges the customer will reflect an additional risk-premium to account for the business risk exposure ..
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