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Scope of CSR in Islamic Economics and Finance Abdalrahman Mohamad Migdad
Islamic Economics Journal Vol 7, No 2 (2021)
Publisher : University of Darussalam Gontor

The purpose of this paper is to explain the scope of Corporate Social Responsibility (CSR) and the Islamic understanding of what responsibility means. The paper aims to reflect on the originality of the idea in the Islamic economic tradition and analyze CSR factors special to Islamic economic institutions. An extensive analysis of existing literature is undertaken to present findings that support the idea of CSR being original in Islamic economics. Within this wide scholarly debate and research on CSR, the views of essential scholars are presented. Finally, an analysis of different drivers for a corporation's engagement in CSR is presented alongside some drivers unique to Islamic financial institutions. Findings: CSR as a research idea is an ongoing debate, especially concerning the definition and operation margins. However, this is a healthy sign showcasing flexibility facing changing community and social needs and the corporation's capabilities and interests. Furthermore, indirect CSR, such as fighting corruption and sensitivity to sharia-compliant operations, needs to be addressed more in light of CSR. The paper finds that the lack of anti-corruption measures and sharia compliance is socially irresponsible and may cost more than corporations might spend directly under CSR. The value of this research is that it shows a need for more CSR engagement from corporations as well as better understanding from the engaged public on the goals and limits of different corporations; one that stands out is Islamic banks and what people expect.

Islamic Banks Between the Jurisprudence of Leading Theorists and Application Abdalrahman Mohamad Migdad; Ashraf Dawaba
Islamic Economics Journal Vol 8, No 1 (2022)
Publisher : University of Darussalam Gontor

The last half of the twentieth century witnessed the birth of Islamic banks. Since their inception, these banks have announced - through their theoreticians - their intention to achieve economic and social development based on their commitment to the principles and provisions of Islamic Sharia. The theoreticians' interests were towards long-term investment and partnership-based contracts as a foundation for mobilizing and using financial resources to achieve development. The paper studies the performance of Islamic banks by collecting data from six Islamic banks in six of the major Muslim countries that engage in Islamic finance. Some of the main conclusions are as follows: The Islamic banks' practice reveals that the thoughts of leading theorists have become absent, as these banks have shifted from the long-term investment method to the short-term commercial method in search of liquidity and profitability. As a result, Murabaha became an alternative to credit on the output side. In turn, current deposits dominated the input side, thus transforming Islamic banks into a form similar to commercial banks. The matter was made worse by the resorting of some Islamic banks to the application of organized 'tawarruq,' which reflects the tendency of some current theorists and implementers to follow the path of traditional banks and enter the tunnel of the jurisprudence of reprehensible tricks. Also, the social role hoped for by Islamic banks has become closer to stagnation than to hoped-for mobility. Keywords; Islamic Banks, Muslim Theorists, Islamic Jurisprudence, Bank Practice, Financial Facilities

Scope of CSR in Islamic Economics and Finance Abdalrahman Mohamad Migdad
Islamic Economics Journal Vol. 7 No. 2 (2021)
Publisher : University of Darussalam Gontor

The purpose of this paper is to explain the scope of Corporate Social Responsibility (CSR) and the Islamic understanding of what responsibility means. The paper aims to reflect on the originality of the idea in the Islamic economic tradition and analyze CSR factors special to Islamic economic institutions. An extensive analysis of existing literature is undertaken to present findings that support the idea of CSR being original in Islamic economics. Within this wide scholarly debate and research on CSR, the views of essential scholars are presented. Finally, an analysis of different drivers for a corporation's engagement in CSR is presented alongside some drivers unique to Islamic financial institutions. Findings: CSR as a research idea is an ongoing debate, especially concerning the definition and operation margins. However, this is a healthy sign showcasing flexibility facing changing community and social needs and the corporation's capabilities and interests. Furthermore, indirect CSR, such as fighting corruption and sensitivity to sharia-compliant operations, needs to be addressed more in light of CSR. The paper finds that the lack of anti-corruption measures and sharia compliance is socially irresponsible and may cost more than corporations might spend directly under CSR. The value of this research is that it shows a need for more CSR engagement from corporations as well as better understanding from the engaged public on the goals and limits of different corporations; one that stands out is Islamic banks and what people expect.

Islamic Banks Between the Jurisprudence of Leading Theorists and Application Abdalrahman Mohamad Migdad; Ashraf Dawaba
Islamic Economics Journal Vol. 8 No. 1 (2022)
Publisher : University of Darussalam Gontor

The last half of the twentieth century witnessed the birth of Islamic banks. Since their inception, these banks have announced - through their theoreticians - their intention to achieve economic and social development based on their commitment to the principles and provisions of Islamic Sharia. The theoreticians' interests were towards long-term investment and partnership-based contracts as a foundation for mobilizing and using financial resources to achieve development. The paper studies the performance of Islamic banks by collecting data from six Islamic banks in six of the major Muslim countries that engage in Islamic finance. Some of the main conclusions are as follows: The Islamic banks' practice reveals that the thoughts of leading theorists have become absent, as these banks have shifted from the long-term investment method to the short-term commercial method in search of liquidity and profitability. As a result, Murabaha became an alternative to credit on the output side. In turn, current deposits dominated the input side, thus transforming Islamic banks into a form similar to commercial banks. The matter was made worse by the resorting of some Islamic banks to the application of organized 'tawarruq,' which reflects the tendency of some current theorists and implementers to follow the path of traditional banks and enter the tunnel of the jurisprudence of reprehensible tricks. Also, the social role hoped for by Islamic banks has become closer to stagnation than to hoped-for mobility. Keywords; Islamic Banks, Muslim Theorists, Islamic Jurisprudence, Bank Practice, Financial Facilities

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