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BUILDING THE INDEX OF RESILIENCE FOR ISLAMIC BANKING IN INDONESIA: A PRELIMINARY RESEARCH Arumsari, Fanny; Wiranatakusuma, Dimas Bagus; Ahmad, Abu Umar Faruq
International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

The 2007-2008 global financial crises had brought severe financial instability in financial institutions, and since then it became more complex and irreparable. Therefore, it has become inevitable to examine various tools that can monitor resilience of these financial institutions, especially the banking system that plays significant role in economic development of a country. Although Islamic banking operates in the same financial environment, its distinguishing features and fundamental differences demand different treatment in building resilience. The scope of existing literature of banking surveillance tools is either to some extent, mostly limited to banking sector in general, orÂ it is dominated by partial developments. Hence, there is a significant gap that lies in the literature to address the specificity of Islamic and conventional Â banking surveillance tools analysis to build resilience that can contribute to reduce the span of financial instability in a country. This study seeks to explore to fill in this gap in Indonesian jurisdiction. The study finds that optimum resilience level of Shari`ah banking in Indonesia exists in specific range as a result of the contribution that is made by each and Â every indicator. The study also attempts to find a way to trace some indicators that could effectively contribute to prevent the instability of Shari`ah compliant banking system in Indonesia.Â

THE GLOBAL FINANCIAL CRISIS, COVID-19 AND THE RUSSIA-UKRAINE WAR: THE SAFE HAVEN POTENTIAL OF ISLAMIC ECONOMICS Sahabuddin , Mohammad; Ahmad, Abu Umar Faruq
Journal of Central Banking Law and Institutions Vol. 2 No. 3 (2023)
Publisher : Bank Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21098/jcli.v2i3.187

Islamic economics is an innovative phenomenon in the modern world. In many developed and developing countries, Islamic financial systems successfully work in parallel with their conventional peers. It is unfortunate that at the time when the world is suffering from a pandemic like COVID-19, the world community has witnessed a war between Russia and Ukraine that has disrupted the global economy. This study evaluates the safe-haven potential of Islamic economics to hedge against a global financial crisis, COVID-19 pandemic, and the Russia-Ukraine conflict and examines how Islamic economics has responded to this major disruption in the digital era. The published literature is reviewed to investigate the impact of major disruptive events like the global financial crisis 2008-2009, COVID-19 and the recent Russia-Ukraine conflict on the global economy. The findings also show that the global financial crisis, Covid-19, and the Russia-Ukraine war are the major events that have disrupted the paradigms of the changing process. Along with this changing process, the advancement of information technology plays a vital role in accelerating financial innovation in the digital era. Moreover, despite the major episodes, it has grown rapidly compared to the traditional counterpart. As the fastest growing part of the global economic system, Islamic economics has shown appeal to diverse investors and issuers.

EVALUATION OF TAKĀFUL OPERATORS’ EFFORTS IN REALISING MAQASID AL- SHARĪʿAH Hasan, Rashedul; Ahmad, Abu Umar Faruq; Nordin, Haziq bin
Journal of Islamic Monetary Economics and Finance Vol 3 No 2 (2018)
Publisher : Bank Indonesia

Takāful has emerged as a Sharīʿah-compliant alternative to conventional insurance, which is embedded in realising its underlying maqasid (goals or objectives) of Sharīʿah. Contrary to previous studies that attempted to provide evidence that takāful products are compliant with the Sharīʿah in practice of takāful operators (TOs), this paper seeks to take a different approach to investigate their compliance with the fulfilment of the three broad categories of maqasid al-Sharīʿah. In light of the theoretical perspectives of maqasid, each objective was operationally defined for statistical analysis. Six TOs from Malaysia were selected, and five-years’ data (2011-2015) have been collected from World Bank’s websites and annual reports. Secondary data were analysed through balanced panel data approach. Hausman test results indicate that fixed effect model is more appropriate in explaining the explored phenomena. Taxes paid by TOs were found to have a significant positive impact on economic growth and poverty alleviation while payment of zakah found to have a negative impact. The prohibition of riba (interest) should not be the only decisive difference between Islamic finance and its conventional counterpart. Islamic banks (IBs) and TOs are accountable toward Allah, and thus their activities should be directed toward the fulfilment of maqasid al-Sharīʿah. While earlier published literature has explored efficiency and profitability of TOs, the current paper has attempted to focus on the ability of TOs in serving the maslaha (public interest/common good of the community).

The present state of Shariah governance of Islamic banks in Bangladesh: an overview Alam, Md. Kausar; Ahmad, Abu Umar Faruq
al-Uqud : Journal of Islamic Economics Vol. 9 No. 2 (2025): July (In press)
Publisher : Universitas Negeri Surabaya

Show Abstract | Download Original | Original Source | Check in Google Scholar

This review aims to explore the Shariah governance (SG) scenario of Islamic banks (IBs) in Bangladesh. The review finds that Bangladesh has a lacking of comprehensive SG guidelines, and Islamic banks are practicing guidelines developed by their own. As a result, their SG practices are diversified and create confusion among the stakeholders. Thus, this review overlooked the SG, and summarized the Centralized Shariah Governance Framework (CSGF) and Shariah Secretariat (SR) for the development of existing practices. If the regulatory authorities implement these frameworks within the central bank and Islamic banks, the scenario of SG will be improvized and enhance the trust of stakeholders.

EVALUATION OF TAKĀFUL OPERATORS’ EFFORTS IN REALISING MAQASID AL- SHARĪʿAH Hasan, Rashedul; Ahmad, Abu Umar Faruq; Nordin, Haziq bin
Journal of Islamic Monetary Economics and Finance Vol. 3 No. 2 (2018)
Publisher : Bank Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21098/jimf.v3i2.897

Takāful has emerged as a Sharīʿah-compliant alternative to conventional insurance, which is embedded in realising its underlying maqasid (goals or objectives) of Sharīʿah. Contrary to previous studies that attempted to provide evidence that takāful products are compliant with the Sharīʿah in practice of takāful operators (TOs), this paper seeks to take a different approach to investigate their compliance with the fulfilment of the three broad categories of maqasid al-Sharīʿah. In light of the theoretical perspectives of maqasid, each objective was operationally defined for statistical analysis. Six TOs from Malaysia were selected, and five-years’ data (2011-2015) have been collected from World Bank’s websites and annual reports. Secondary data were analysed through balanced panel data approach. Hausman test results indicate that fixed effect model is more appropriate in explaining the explored phenomena. Taxes paid by TOs were found to have a significant positive impact on economic growth and poverty alleviation while payment of zakah found to have a negative impact. The prohibition of riba (interest) should not be the only decisive difference between Islamic finance and its conventional counterpart. Islamic banks (IBs) and TOs are accountable toward Allah, and thus their activities should be directed toward the fulfilment of maqasid al-Sharīʿah. While earlier published literature has explored efficiency and profitability of TOs, the current paper has attempted to focus on the ability of TOs in serving the maslaha (public interest/common good of the community).

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