Search results for: micro waqf banks

Authors: Achmad Muchaddam Fahham, Sony Hendra Permana

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For rural communities and micro-entrepreneurs, access to formal financial institutions is very difficult. So, borrowing to moneylenders is the most possible way to fulfill their needs. But actually it does not solve their problems, precisely their problems are increasing because they have to pay at very high-interest rates. For this reason, microfinance institution is very important as a solution for rural communities and micro-entrepreneurs who need loans to fulfill their needs. This paper aims to describe the role of micro waqf banks in Indonesia as an alternative funding for rural communities and micro-entrepreneurs. This research is descriptive using a qualitative approach. The interview technique was also carried out with key informants who understood sharia microfinance institutions. The results of the study revealed that the micro waqf bank is Islamic microfinance institutions which targeted the micro business sector by channeling small financing with a maximum financing of Rp1 million. The funding of this micro waqf bank comes from donors who donate funds through the Amil Zakat institution. The margins imposed on borrowers are as high as 3 percent per year, with payment schemes in installments every week, so it is made easier for borrower. In addition, financing is followed by training and mentoring so that borrower is able to utilize the loan for productive business activities. In the end, it is hoped that this micro waqf bank can become an incubator for micro businesses in Indonesia.

Keywords: micro business, micro waqf banks, micro-entrepreneurs, Amil Zakat institution

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Authors: Meysam Doaei, Mojtaba Kavand

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WAQF as a part of Islamic social security system is developed in Islam. Traditional WAQF has some limitations which are resolved in WAQF Sukuk. In regard to acceptability of Islamic finance in the world, WAQF Sukuk also has been developing in Islamic countries. In this paper, concept of WAQF, traditional and modern WAQF financing are presented. Then, WAQF Sukuk, its application and its model in Iran are developed.

Keywords: Al-mawqūfat development, traditional financing, modern financing, WAQF Sukuk

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Authors: Sikiru O. Aminu, Magda Ismail Abdul Mohsin, Fauziah M. Taib

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Fund collections for Waqf projects in some Muslim countries received some boost because of the resuscitation of the cash waqf concept This study envisages that such development can improve the economic empowerment of the poor in contemporary Muslim communities given appropriate collections and effective management of the Waqf institution. Recent developments in the Financial Technology (FINTECH) space portend valuable relevance in the conduct and delivery of social charitable causes such as Waqf around the world. Particularly, emerging areas in FINTECH such as Islamic Crowdfunding (ICF) and blockchain have brought about greater efficiency and effectiveness through cost reduction, faster transactions, wider access, transparency and prompt disclosure of adequate information to relevant stakeholders. These FINTECH options of ICF and blockchain provide veritable opportunities to resuscitate, re-align, synergize and magnify the Islamic Social Finance (ISF) ecosystem of Waqf, Zakat and Sodaqah to generate positive and sustainable impact to the community, environment and the economy at large, with a view to projecting the Maqasid Shari’ah (Objective of the Law Giver). To document the effect of FINTECH on Waqf, this study examined the activities of six banks in Malaysia that signed a pact to utilize FINTECH for waqf collection towards improving the economy. Semi-structured Face to Face interviews were conducted with officers in charge of Waqf in the six banks, founder of the Islamic Crowdfunding platform and senior officers in Waqaf Selangor. Content analysis was used to analyze their responses, and the emergent themes were reported verbatim. Based on the derived themes, survey questionnaires were also administered to 300 customers with respect to the Waqf’s FINTECH functionalities of the identified banks.to further confirm and strengthen the results of the interviews. Simple descriptive analysis was performed on the result of the survey questionnaire to provide clear information on the questions raised. The findings showed a disproportionate level of readiness among the banks, where few of the banks have put structure in place to increase their Waqf collections, others are at their elementary stage. However, the commitment is high across the six banks to achieve their set goals.

Keywords: blockchain, Fintech, Islamic crowdfunding, waqf

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Authors: Khadijah Hasim, Achmad Fauzan Firdaus, Choirunnisa

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Waqf land which previously was idle assets can be built on top of a building that is a means for people to conduct business. Nadzir (waqf managers) lease of waqf lands it manages, the agreed rental fee, which is payable in the form of the building, not in cash. After standing building, the developer will lease to interested companies. Given the magnitude of the beginning funds needed, The company later issuing sukuk al-intifa on the trading floor. With this sukuk issuance, the company has sufficient capital to begin operations and pay obligations of the rental fee to the developer each year. Building that had stood trade area will be established (Micro, Small, Middle Entreprises) MSMEs. It is expected that through the sukuk al-intifa, can help to make waqf land previously unproductive due to lack of capital to be very beneficial and help awaken the people of Indonesian MSMEs

Keywords: Sukuk Al-Intifa, MSMEs, waqf land, underlying asset

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Authors: Mohd Bahroddin Badri, Ridzuan Masri

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Despite the existence of large volume of waqf assets, it is argued that the potential of these assets not fully unleashed. There are many waqf assets especially in the form of land waqf that are idle and undeveloped mainly because of the insufficient fund and lack of investment expertise. This paper attempts to explore few cases on the innovation of waqf development in Malaysia and some countries that demonstrate synergistic collaboration between stakeholders, e.g., the government, nazir, Islamic religious councils, corporate entities and Islamic financial institutions for waqf development. This paper shows that cash waqf, corporate waqf, Build-Operate-Transfer (BOT) and Sukuk are found to be contemporary mechanisms within Islamic finance ecosystem that drive and rejuvenate the development of waqf to the next level. It further highlights few samples of waqf Sukuk that were successfully issued in selected countries. This paper also demonstrates that the benefit of waqf is beyond religious matters, which may also include education, healthcare, social care, infrastructure and corporate social responsibility (CSR) activities. This research is qualitative in nature, whereby the researcher employs descriptive method on the collected data. The researcher applies case study and library research method to collect and analyse data from journal articles, research papers, conference paper and annual reports. In a nutshell, the potential of contemporary models as demonstrated in this paper is very promising, in which the practical application of those instruments should be expanded for the rejuvenation of waqf asset.

Keywords: cash waqf, corporate waqf, Sukuk waqf, build-operate-transfer

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Authors: Huraizah Arshad, Maizan Baba

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Malaysia is the country that consists of high population of Muslim community with more than 60%; as reported in year 2014. The stability of economy allowed people to contribute towards ongoing charity such as waqf and infaq. Waqf is an important component of the Islamic economic instruments since it is beneficial to help those needy in the community. Although waqf had been implemented in Malaysia for many years, there is no specific framework on how to manage and maintain the waqf properties in effective and efficient practice. Thus, a comprehensive framework related to the management and maintenance of the waqf properties is crucial to ensure that the administration of the fund is fair within the community. The objective of this article is to examine the related literatures in administration, management and maintenance of waqf for the past ten (10) years. The methodology of this article is through qualitative research based on literature on waqf administration and management; waqf planning and development and the application of maintenance concept. Data from each articles related in this field were collected and statistically analyzed using the SPSS software. A variable such as authorship patterns, number of articles published and geographical affiliation are identified in this study. The general finding in this article shows that there are still limited number of articles and papers published by the researchers related to this field. Henceforth, this article provides significant suggestions and strategies for the future research on waqf administration, management and maintenance.

Keywords: Waqf, administration and management, maintenance, improvement, facilities management

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Authors: Adfer Rashid Shah

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This study brings an introduction to the concept of waqf and explores the institution of waqf in the valley of Kashmir. Waqfs (pl. Auqaf) are Islamic endowments which can be movable or immovable property by Muslims for the welfare of the poor and the upkeep of the mosques, shrines, imambaras, madrassas, orphanages, etc,. The study was undertaken to venture into the sociology of these endowments and see the dynamics and role of waqf institution in the welfare of masses especially the deserving populace of the state of Jamu and Kashmir. The Jammu and Kashmir Muslim Waqf Board (JKMWB) is a significant religio-social organization for it possesses the largest assets after the State government and has an immense potential and ownership in terms of huge properties besides having rich and perpetual cash and kind donations, gold, silver and other commodities from the believers. It is certainly the perpetual wealth of faith. Therefore this study besides exploring the waqf institution, sociologically probed into the social, religious and philanthropic interventions of the Wakf Board besides studying the waqf of education (both religious and general). Also, a passing reference on personalized Auqaf, local waqf committees particularly shia Auqaf was also made. As far methodology employed, the study was purely a qualitative study using various sociological perspectives like functionalism, grounded theory besides a range other concepts to see the total role of waqf that it has been playing for the people’s welfare in the valley of Kashmir since its establishment in 1940’s. The overall discussion revealed the social dynamics of waqf institution in Kashmir valley is increasing its social interventions and making difference in the lives of many deserving Muslims within its capacities.

Keywords: waqf, wakf board, religious waqf, philanthropy and education waqf, religious waqf, Kashmir

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Authors: Nathasa Mazna Ramli, Nurul Husna Mohd Salleh, Nurul Aini Muhamed

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This study focuses on the governance of an Islamic philanthropic institution in Malaysia. Specifically, the internal governance structure of corporate Islamic endowment, or waqf, is being analysed. The purposes of waqf are to provide continuous charity that could generate perpetual income flow for the needy. This study is based on the principle of MCCG 2012, Shariah Governance Framework and charity governance. This study utilises publicly available data to examine the internal governance structure of a corporate waqf. This study finds that the Islamic philanthropic Institution practices, to some extent, have a sound governance structure to discharge their transparency and accountability. Furthermore, findings also showed that though governance structure is in place, most of the structures are not disclosed in the annual reports of the company. Findings from the study could extend the knowledge in these areas and stimulate further research on the governance of Islamic philanthropic institutions, particularly for corporate waqf.

Keywords: accountability, governance, Islamic philanthropic, corporate waqf

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Authors: Minghua Chen, Rui Wang

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This paper addresses the impact of foreign ownership on the risk-taking behavior of banks. Using bank-level panel data of more than 1,300 commercial banks in 32 emerging economies during 2000-2013, we find that foreign owned banks take on more risk than their domestic counterparts. We further examine several factors that may potentially contribute to foreign banks’ differentiated riskiness from four perspectives, namely, foreign banks’ informational disadvantages, agency problems, the contagious effect of parent banks’ financial conditions and the disparity between home and host markets. We find supportive evidence that these factors play a significant role in affecting foreign banks’ risk-taking.

Keywords: bank risk-taking, emerging economies, financial liberalization, foreign banks

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Authors: Mohamed Saad Ahmed Hussien

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This paper discusses the risk management in Islamic banks and aims to determine the difference in the practices and methods of risk management in those banks compared to the conventional banks, and to make a case study of the biggest Islamic bank in Egypt (Faisal Islamic Bank of Egypt) to identify the most important financial risks faced and how to manage those risks. It was found that Islamic banks face two types of risks. The first type is similar to the risks in conventional banks; the second type is the additional risks which facing the Islamic banks only as a result of some Islamic modes of financing. With regard to the risk management, Islamic banks such as conventional banks applied the regulatory rules issued by the Central Banks and the Basel Committee; Islamic banks also applied the instructions and procedures issued by the Islamic Financial Services Board (IFSB). Also, Islamic banks are similar to the conventional banks in the practices and methods which they use to manage the risks. And there are some factors that may affect the risk management in Islamic banks, such as the size of the bank and the efficiency of the administration and the staff of the bank.

Keywords: conventional banks, Faisal Islamic Bank of Egypt, Islamic banks, risk management

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Authors: Sanskriti Singh, Ankit Tomar

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Banks are the instrument of growth of a country. Banks mobilize the savings of the public in the form of deposits and channelize it as advances for various activities required for the development of society at large. The advance which becomes unpaid for a certain period is called Non Performing Asset of the bank. The study makes an attempt to bring out the magnitude of NPA and its impact on profit, advances. An attempt is also made to bring out the challenges NPA poses to the banks and suggestions to overcome and to manage NPA effectively.

Keywords: India, NPAs, private banks, public banks

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Authors: Maryam Idris Bakori

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The level of poverty in our region (West Africa) is a severe problem. The statistics about it are scary and alarming. For example, Report on Economic and Social Conditions in West Africa by United Nations Economic Commission for Africa gives the following gloomy picture of social conditions in the region: In West Africa, approximately one person in three in the towns, and one in two in the rural areas, cannot afford the expenditure needed to cover their basic needs. The situation has reached emergency proportions and calls for urgent social action (Recent Economic and Social Developments in West Africa and Prospects for 2010). Many different policies and programs to combat the poverty in the region have been embarked upon by the government of various countries in West Africa, but yet the ugly face of poverty persists. However, to explore opportunities and avenues for making positive contributions to national and regional development, this paper sets out to examine the role of two Islamic institutions; Zakah and Waqf, in poverty alleviation and how Islam uses these two institutions among others to eradicate poverty. The paper suggests that the governments of various countries of West Africa should endeavor to integrate Zakah and Waqf into their poverty alleviation programs by borrowing a leaf from some countries in Africa and Asia that have integrated these Islamic institutions into their poverty reduction programs, and they have started to reap the positive result from the policy.

Keywords: waqf, poverty, zakah, Islamic economy, education

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Authors: Tasawar Nawaz

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Promotion of socioeconomic justice through redistribution of wealth is one of the most salient features of Islamic economic system. Islamic financial institutions known as Islamic banks are used to implement this in practice under the guidelines of Islamic Shariah law. Islamic banking systems strive to promote and achieve financial inclusion among the society by offering interest-free banking and risk-sharing financing solutions. Shariah-compliant micro finance is one of the most popular financial instruments used by Islamic banks to enhance access to finance. Benevolent loan (or Qard-al-Hassanah) is one of the popular financial tools used by the Islamic banks to promote financial inclusion. This aspect of Islamic banking is empirically examined in this paper with specific reference to firm’s resources, largely defined here as intellectual capital. The paper finds that Islamic banks promote financial inclusion by exploiting available resources especially, the human intellectual capital.

Keywords: financial inclusion, intellectual capital, Qard-al-Hassanah, Islamic banking

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Authors: Md. Abu Yousuf

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Islamic social financing (ISF) refers to the fair distribution of wealth and financial dealings and prevents economic exploitation at all levels. ISF instruments include Islamic institutions Zakat (obligatory charity), Sadaqah (voluntary charity) and Waqf (endowment) based on philanthropy such and Qard-al Hasan (beautiful loan), micro takaful (insurance) and social investments through Sukuk (bonds) based on cooperation. ISF contributes to socio-economic development, end poverty, protects environmental sustainability, promotes education, equality, social justice and above all, establishes social well-being since the birth of Islam. ISF tools are instrumental towards achieving sustainable development goals (SDGs) set by United Nations (UN). The present study will explore the scope of ISF for community development in Bangladesh and examine the challenges in implementing ISF tools and will provide the most practical model of ISF. The study will adopt a mixed-method (MM) design in the process of data collection and analysis. The researcher will consider all issues related to ethics, reliability, validity and feasibility while conducting the study.

Keywords: Islamic social financing, sustainable development goals, poverty eradication, zakat, waqf, sadaqah, Islamic microfinance

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Authors: Shumaila Zeb

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The proposed study aims to investigate insolvency risk of commercial banks of Pakistan. Furthermore, it empirically estimates the effect of already implemented financial regulations on the insolvency risk of banks. To carry out the empirical analysis, a balanced bank-level panel data covering the period 2008-2016 is used. The Z-score is used for calculating the insolvency risk of each bank. The panel regression is used to investigate the relationship between financial regulations and insolvency risk of banks. The empirics reveal that the financial regulations enforced by State Bank of Pakistan have significant impacts on the insolvency risk of banks. The results further indicate that loan ratio and reserve ratio are positively and significantly related to the insolvency risk of banks.

Keywords: insolvency risk, Z-score, financial regulations, banks

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Authors: Karolína Vozková, Matěj Kuc

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This paper analyzes recent trends in cost efficiency of European cooperative banks using efficient frontier analysis. Our methodology is based on stochastic frontier analysis which is run on a set of 649 European cooperative banks using data between 2006 and 2015. Our results show that average inefficiency of European cooperative banks is increasing since 2008, smaller cooperative banks are significantly more efficient than the bigger ones over the whole time period and that share of net fee and commission income to total income surprisingly seems to have no impact on bank cost efficiency.

Keywords: cooperative banks, cost efficiency, efficient frontier analysis, stochastic frontier analysis, net fee and commission income

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Authors: Mahmood Mohammed Abdulsattar Aljumaili

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Praise be to Allah and peace and blessings be upon the Messenger of Allah. Islamic banks have not only made a lot of great achievements in a short period, but they imposed themselves in the global market, not to mention the transformation of some conventional interest-based banks to Islamic banks to the large demand on them, this transformation has pushed the Dow Jones Global Foundation to develop a new economic indicator released it (the Dow Jones Islamic market) for those who wish to invest in Islamic financial institutions. The success of Islamic financial institutions today face significant and serious challenges, that embody the serious consequences created by the current events on Islamic banking industry. This modest study, deals with these serious challenges facing the Islamic banking industry, and reflected on the success recorded in the previous period. The study deals with four main topics: The emergence of Islamic banks, the goals of Islamic banks, International challenges facing Islamic banks, internal challenges facing Islamic banks, and finally it touches on, (Basel 1-2) Agreement and its implications for Islamic banks.

Keywords: Islamic banks, Basel 1-2 agreement, most important contemporary challenges, islamic banking industry, Dow Jones Islamic market

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Authors: Rashid Masoud Ali Al-Mazrui, Ramadhani Mashaka Shabani

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Islamic banks and financial institutions are exposed to the same risks as conventional banking. These risks include the rate return risk, credit or market risk, liquidity risk, and operational risk among others. However, being a financial institution that operates Islamic banking and finance operations, there is additional risk associated with its operations different from conventional finance, such as displacing commercial risk. They face Shari'ah compliance risks because of their failure to follow Shari'ah principles. To have proper mitigation and risk management, banks should have proper risk management policies to mitigate risks. This paper aims to study the risk management taken by Islamic banks in comparison with conventional banks. Also, the study evaluates the provisions for risk management taken by selected Islamic banks and conventional banks. The study employs qualitative analysis using secondary data by applying a content analysis approach with a sample size of 4 Islamic banks and four conventional banks ranging from 2010 to 2020. We find that these banks all use the same technique, except for the associated risk. The extra ways are used, but only for additional risks that are available to Islamic banking and finance.

Keywords: emerging risk, risk management, Islamic banking, conventional bank

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Authors: Vijay Kumar, Ron Bird

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The study investigates the effect of bank-specific, industry-specific and macroeconomic variables on the profitability of conventional and Islamic banks. Our sample comprises 1,781 bank-year observations of 205 banks from four countries in the Asian region for the period 2004-2014. Our results suggest that credit quality, cost management and bank size are the keys factors that contribute positively to bank profitability in Asia. The banks with high non-performing loans and high cost-to-income ratio are more likely to be exposed to losses. The impacts of the bank-specific variables are stronger than are the industry-specific and macroeconomic variables. We find that Malaysian banks are the least profitable compared to the banks in Bangladesh, Indonesia and Pakistan. There is strong evidence to suggest that conventional banks are more profitable than Islamic banks. Our results suggest that the impact of capital adequacy ratio and bank size and loan to deposit ratio vary across Islamic and conventional banks and across different subsamples.

Keywords: capital adequacy ratio, Islamic banks, non-performing loan ratio, ownership

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Authors: Khaled Alotaibi, Salah Alhamadi, Ibraheem Almubarak

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The study attempts to explore both corporate governance (GC) and business ethics (BE) practices in Kuwaiti banks and the relationship between CG and BE, using an accountability framework. By examining the perceptions of key stakeholder groups, this study investigates the practices of BE and CG in Islamic banks (IBs) compared to conventional banks (CBs). We contribute to the scarce studies concerned with relations between CG and BE. We have employed a questionnaire survey method for a random sample of crucial relevant stakeholder groups. The empirical analysis of the participants’ perceptions highlights the importance of applying CG regulations and BE for Kuwaiti banks and the clear link between the two concepts. We find that the main concern is not the absence of CG and BE codes, but the lack of consistent enforcement of the regulations. Such a system needs to be strictly and effectively implemented in Kuwaiti banks to protect all stakeholders’ wealth, not only that of stockholders. There are significant patterns in the CG and BE expectations among different stakeholder groups. Most interestingly, banks’ client groups illustrate high expectations concerning CG and BE practices.

Keywords: corporate governance, GC, business ethics, BE, Islamic banks, IBs, conventional banks, CBs, accountability

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Authors: Firas A. N. Al-Dalabih

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This study aims at identifying the level of disclosure of intellectual capital at the Jordanian development banks. The study sample composed of (100) individuals working at the National Bank to Finance Small Projects around the different governorates of the Hashemite Kingdom of Jordan. A questionnaire has been prepared and distributed over the study sample. (95) Questionnaires have been retrieved; valid for the statistical analysis purposes with a percentage of (95%). The study results showed that the level of disclosure of intellectual capital with all its dimensions (human capital, customer capital and structural capital) at the Jordanian development banks was of a high level. The results also showed that there is a high level of awareness performed by the Jordanian development banks’ employees in regard to the necessity and importance of the intellectual capital’s disclosure. The study was concluded with a number of recommendations among which were that the Jordanian development banks shall take notice toward increasing their workers’ awareness regarding the importance of intellectual capital’s disclosure, as well as applying this study over commercial and Islamic banks for the purposes of carrying out a comparison between them and the development banks.

Keywords: intellectual capital, Jordanian development banks, the level of disclosure

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Authors: Iveta Řepková

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The aim of this paper is to estimate the efficiency of the Slovak commercial banks employing the Data Envelopment Analysis (DEA) window analysis approach during the period 2003-2012. The research is based on unbalanced panel data of the Slovak commercial banks. Undesirable output was included into analysis of banking efficiency. It was found that most efficient banks were Postovabanka, UniCredit Bank and Istrobanka in CCR model and the most efficient banks were Slovenskasporitelna, Istrobanka and UniCredit Bank in BCC model. On contrary, the lowest efficient banks were found Privatbanka and CitiBank. We found that the largest banks in the Slovak banking market were lower efficient than medium-size and small banks. Results of the paper is that during the period 2003-2008 the average efficiency was increasing and then during the period 2010-2011 the average efficiency decreased as a result of financial crisis.

Keywords: data envelopment analysis, efficiency, Slovak banking sector, window analysis

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Authors: Sirus Sharifi, Arunima Haldar, S. V. D. Nageswara Rao

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This research analyzes the effect of credit risk management practices of commercial banks in India and the relationship with their non-performing assets (NPAs). Required data on credit risk performance was collected through a survey questionnaire from top risk officers of 38 Indian banks. NPA data (period from 2012 to 2016) was collected from Prowess database compiled by the Centre for Monitoring Indian Economy (CMIE). The model was assessed utilizing cross sectional regression method. As expected, the results indicate a negative significant relationship between credit risk management in India banks and their NPA growth. The research has implications for banks given the high level of losses in India and other economies as well, and the implementation of Basel III standards by the central banks. This research would be an evidence on credit risk performance and its relationship with the level of non-performing assets (NPAs) in Indian banks.

Keywords: risk management, risk identification, banks, Non-Performing Assets (NPAs)

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Authors: Laurent Maurin, Mervi Toivanen

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This paper estimates euro area banks’ internal target capital ratios and investigates whether banks’ adjustment to the targets have an impact on credit supply and holding of securities during the financial crisis in 2005-2011. Using data on listed banks and country-specific macro-variables a partial adjustment model is estimated in a panel context. The results indicate, firstly, that an increase in the riskiness of banks’ balance sheets influences positively on the target capital ratios. Secondly, the adjustment towards higher equilibrium capital ratios has a significant impact on banks’ assets. The impact is found to be more size-able on security holdings than on loans, thereby suggesting a pecking order.

Keywords: Euro area, capital ratios, credit supply, partial adjustment model

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Authors: Hannes Koester

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Driven by difficult market conditions and increasing regulations, many banks are making the strategic decision to restructure their portfolio by divesting several business segments. Using a unique dataset of 727 portfolio restructuring announcements by 161 international listed banks over the period 1999 to 2015, we investigate the impact of restructuring measurements on the stock performance as well as on the banks’ profitability and risk. Employing the event study methodology, we detect positive stock market reactions on the announcement of restructuring measurements. These positive stock market reactions indicate that shareholders reward banks’ specialization activities. However, the results of the system GMM regressions show a negative relation between restructuring measurements and banks’ return on assets and a positive relation towards the individual and systemic risk of banks. These empirical results indicate that there is no guarantee that portfolio restructurings will result in a more profitable and less risky institution.

Keywords: bank performance, bank risk, divestiture, restructuring, systemic risk

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Authors: Asma Ammar

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Being different in theory and practice from their conventional counterparts, this research aims to assess the performance of Islamic banks beyond the financial performance by emphasizing their ethical and social identity based on the higher purposes of Islamic law, namely Maqasid al-Shariah. Using Imam al-Ghazali’s theory of Maqasid al-Shariah and Sekaran’s (2000) method, we develop a Maqasid-based index including the five objectives of Shariah (preservation of life, religion, intellect, posterity, and wealth). Our sample covers 9 Islamic banks considered among the largest Islamic banks in the world. For the five years of study (2017-2021), our results reveal that the highest score is performed by Bank Muamalat while the least score is given to Dubai Islamic Bank. The overall Maqasid performance of the sample is unimpressive, indicating that there is a lack of achievement in Maqasid al-Shariah performance of Islamic banks. Consequently, serious measures should be taken by Islamic banks to improve their Maqasid performance and thus contribute effectively to the socio-economic development of the countries in which they operate.

Keywords: Maqasid al-Shariah, Maqasid al-Shariah index, Islamic banks, performance assessment

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Authors: Megersa Dugasa Fite

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This paper analyses regulatory and supervisory issues in the Ethiopian micro finance sector, which caters to the needs of those who have been excluded from the formal financial sector. Micro-finance has received increased importance in development because of its grand goal to give credits to the poor to raise their economic and social well-being and improve the quality of lives. The micro-finance at present has been moving towards a credit-plus period through covering savings and insurance functions. It thus helps in reducing the rate of financial exclusion and social segregation, alleviating poverty and, consequently, stimulating development. The Ethiopian micro finance policy has been generally positive and developmental but major regulatory and supervisory limitations such as the absolute prohibition of NGOs to participate in micro credit functions, higher risks for depositors of micro-finance institutions, lack of credit information services with research and development, the unmet demand, and risks of market failures due to over-regulation are disappointing. Therefore, to remove the limited reach and high degree of problems typical in the informal means of financial intermediation plus to deal with the failure of formal banks to provide basic financial services to a significant portion of the country’s population, more needs to be done on micro finance. Certain key regulatory and supervisory revisions hence need to be taken to strengthen the Ethiopian micro finance sector so that it can practically provide majority poor access to a range of high quality financial services that help them work their way out of poverty and the incapacity it imposes.

Keywords: micro-finance, micro-finance regulation and supervision, micro-finance institutions, financial access, social segregation, poverty alleviation, development, Ethiopia

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Authors: Ibrahim Rabiu Darazo

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The research has been conducted on the impact of E-banking on the operational efficiency of Banks in Nigeria, A case of some selected banks (Diamond Bank Plc, GTBankPlc, and Fidelity Bank Plc) in Nigeria. The research is a quantitative research which uses both primary and secondary sources of data collection. Questionnaire were used to obtained accurate data, where 150 Questionnaire were distributed among staff and customers of the three Banks , and the data collected where analysed using chi-square, whereas the secondary data where obtained from relevant text books, journals and relevant web sites. It is clear from the findings that, the use of e-banking by the banks has improved the efficiency of these banks, in terms of providing efficient services to customers electronically, using Internet Banking, Telephone Banking ATMs, reducing time taking to serve customers, e-banking allow new customers to open an account online, customers have access to their account at all the time 24/7.E-banking provide access to customers information from the data base and cost of check and postage were eliminated using e-banking. The recommendation at the end of the research include; the Banks should try to update their electronic gadgets, e-fraud(internal & external) should also be controlled, Banks shall employ qualified man power, Biometric ATMs shall be introduce to reduce fraud using ATM Cards, as it is use in other countries like USA.

Keywords: banks, electronic banking, operational efficiency of banks, biometric ATMs

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Authors: Sirus Sharifi, Arunima Haldar, S. V. D. Nageswara Rao

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The study attempts to analyze the impact of credit risk management practices of Indian scheduled commercial banks on their non-performing assets (NPAs). The data on credit risk practices was collected by administering a questionnaire to risk managers/executives at different banks. The data on NPAs (from 2012 to 2016) is sourced from Prowess, a database compiled by the Centre for Monitoring Indian Economy (CMIE). The model was estimated using cross-sectional regression method. As expected, the findings suggest that there is a negative relationship between credit risk management and NPA growth in Indian banks. The study has implications for Indian banks given the high level of losses, and the implementation of Basel III norms by the central bank, i.e. Reserve Bank of India (RBI). Evidence on credit risk management in Indian banks, and their relationship with non-performing assets held by them.

Keywords: credit risk, identification, Indian Banks, NPAs, ownership

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Authors: Wisu Suntoyo, Dedy Sushandoyo

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Innovation and digital transformation are essential for firms’ competitiveness in the digital age. The competition in Indonesia’s banking industry provides an intriguing case study for understanding how digital transformation can generate innovation in established companies. The empirical evidence of this study is mainly based on interviews and annual reports examining four established banks in their various states of digital transformation. The findings of this study reveal that banks’ digital transformations that lead to innovations differ in terms of the activities undertaken and the outcomes achieved depending on the state of advancement in which they are. Digital transformation is a complex and challenging process, and this study finds that with this strategy, established banks have shown capable of generating innovation. Banks can choose types of transformation activities that generate radical, architectural, modular, or even incremental innovations.

Keywords: digital transformation, innovations, banking industry, established banks

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