nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒01‒13
eight papers chosen by

  1. MANAJEMEN RISIKO PADA BANK SYARIAH By Afriyeni, Afriyeni; Susanto, Romi
  2. Waqf as a Tool for Rendering Social Welfare Services in the Social Entrepreneurship Context By Shahriar, Shawon Muhammad; Alam, Md. Mahmudul; Said, Jamaliah; Monzur-E-Elahi, Mohammad
  3. The Islamic Shariah Principles for Investment in Stock Market By Alam, Md. Mahmudul; Akbar, Chowdhury Shahed; Shahriar, Shawon Muhammad; Monzur-E-Elahi, Mohammad
  5. Human Capital Accountability and Construct: Evidence from Islamic Microfinance Institutions in Malaysia By Kamaluddin, Amrizah; Kassim, Nawal; Alam, Md. Mahmudul; Abu Samah, Siti Akmar
  6. The Performance of Islamic Banks during the 2008 Global Financial Crisis: Evidence from the Gulf Cooperation Council Countries By Hussien, Mohammed Ebrahim; Alam, Md. Mahmudul; Murad, Wahid; , Abu N.M. Wahid

  1. By: Afriyeni, Afriyeni; Susanto, Romi
    Abstract: Research and experience over the last two decades has resulted in a deep understanding of issues relating to risk management and the principles of a well established risk faced by management. The company managers are increasingly recognizing the importance of risk management. In the context of risk management, the guidelines were implemented over the years, made only for conventional banks. Whereas players in the world and national banking business not only conventional banks, but has also been enlivened by banks with Islamic principles that number continues to increase from year to year. This paper gives an overview of how risk management in Islamic banking. In general, the risks faced by Islamic banking can be classified into two major parts. Ie the same risks faced by conventional banks and the risk that is unique because it must follow the principles of sharia. Credit risk, market risk, benchmark risk, operational risk, liquidity risk, and legal risk, Islamic banks must be faced. But, because they have to abide by the rules of Sharia, the risks faced by Islamic banks had to be different.
    Date: 2019–03–16
  2. By: Shahriar, Shawon Muhammad; Alam, Md. Mahmudul (Universiti Utara Malaysia); Said, Jamaliah; Monzur-E-Elahi, Mohammad
    Abstract: The concept of Islamic entrepreneurship centers on ensuring community well-being as the priority, which is one of the important objectives (Maqasid) of the Islamic Shari’ah. Historically, waqf played a significant role in the Islamic economic system, particularly in rendering exemplary welfare services in the areas of healthcare, education, social welfare, environmental, and other community-based programs. However, only a few success stories in recent history have institutionally utilized the properties of waqf under proper management to achieve its substantial objectives. This study uses the literature review as basis to analyze the reasons behind the successful utilization of waqf as an effective tool to ensure social welfare services in the past, as well as how this model can be replicated by considering current contexts. This study will assist Islamic value-centric entrepreneurs, regulatory authorities, investors, and researchers to gain an overall insight into the potentials of waqf as a tool for rendering commendable social welfare services.
    Date: 2019–06–14
  3. By: Alam, Md. Mahmudul (Universiti Utara Malaysia); Akbar, Chowdhury Shahed; Shahriar, Shawon Muhammad; Monzur-E-Elahi, Mohammad
    Abstract: Due to chronic financial crises experienced during last several decades repeatedly and a failure to protect investors‟ rights as a result, the world is looking for an alternative form of stock market for quite some time so that interests of all relevant stakeholders can be safeguarded. At the same time, from the perspectives of devout Muslims, the current form of stock market restricts a Muslim to make investments in the market due to unsatisfying several provisions from the Islamic law, known as shariah. This study provides the criteria under which conditions the Islamic shariah permits making investments in the stock market. Hand in hand with that primary discussion, it has been eluded briefly why the Islamic shariah principles offer a better alternative against conventional practices of the stock market.
    Date: 2019–06–14
  4. By: Widayati, Ratna; Setiawati, Rini
    Abstract: Bank Nagari Syariah Cabang Padang is one of the islamic banks to raise fund in the system using mudharabah. Mudharabah is a collaboration between two parties where one party acts as financier (sahubul maal) one party more as a fund manager (mhudarib), in cooperation mudharabah do system for the result if the profit will be shared with the agremeent at the beginning, whereas if you exsperience loss then based on the condition that the losses borne by the property instead of the manager. Mudharabh is divided into two kinds of mudharabah muthlakah that is fund management is spacious and muqayadah its fund management for specific purposes only. As for the pupose of this study was to determine how the aplication system for results on a mudharabah fund Bank Nagari Syariah Cabang Padang. Based on an analysis conducted by the method of observation, literature review and in-dept interview it can be seen that the Bank Nagari Syaria branch meadow implement a system for the result to savings mudharabah with 45:55 ratio, with the ratio of 65:35 mudharabah banks have received bonuses wadiah 30%.
    Date: 2019–02–14
  5. By: Kamaluddin, Amrizah; Kassim, Nawal; Alam, Md. Mahmudul (Universiti Utara Malaysia); Abu Samah, Siti Akmar
    Abstract: To identify the human capital construct that significantly relates to the performance of Islamic organizations, this study obtained data from Islamic microfinance organizations in Malaysia using the survey questionnaire method. In addition, we interviewed renowned scholars in the fields of Islamic accounting and Shariah law. Consequently, this study proposes an extended model of human capital that is applicable to Islamic organizations. Apart from knowledge and competency, this study includes spiritual value as another construct of human capital in Islamic organizations. Knowledge includes ideas that are relevant to the accounting and auditing spectra, as well as Shariah principles and jurisprudence. By contrast, competency refers to the ability to innovate unique Shariah-compliant products that are rare and difficult to imitate. Meanwhile, spiritual values embrace the elements of “Siddiq,” “Amanah,” “Fathonah,” and “Tabligh.” This study affirms that knowledge, competency, and satisfaction are the most significant constructs of human capital that explain performance. Factor analysis indicates that spiritual value is embedded in and forms part of the human capital construct. Hence, spiritual value is a key element in company culture and contributes significantly to organizational success. This model can be a platform for human capital reporting in the relevant Islamic and conventional organizations.
    Date: 2019–06–13
  6. By: Hussien, Mohammed Ebrahim; Alam, Md. Mahmudul (Universiti Utara Malaysia); Murad, Wahid; , Abu N.M. Wahid
    Abstract: Purpose – The purpose of this study is to analyze the profitability performance of Islamic banks of the Gulf Cooperation Council (GCC) region during 2008 global financial crisis. Design/methodology/approach – Bank specific data are taken from the Bank Scope database and macroeconomic data are collected from International Financial Statistics. Using a panel data series of 30 banks for the period of 2005 to 2011, the study shows the evidence of structural break for the crisis year as well as the factors that impact the profitability of Islamic banks. Findings – The performance of GCC Islamic banks was significantly influenced during the crisis period by capital adequacy, credit risk, financial risk, operational efficiency, liquidity, bank size, gross domestic product, growth rate of money supply, bank sector development and inflation rate. The study also finds that there is a structural change before and after the global financial crisis. Originality/value – This is an original study that shows that the shariah compliant banks have performed better during the crisis and are not affected based on their internal performance records; rather, they have been affected indirectly from the macro shock due to the overall economic crisis.
    Date: 2019–06–15
  7. By: Diana, Citra; Tanjung, Mariani St.B
    Abstract: The aim of this research is to know whether the transaction system and the calculation of interest on Bank Nagari branch Pariaman villages have been effective in accordance with Regulation deposits contained in the legislation of Republic of Indonesia No. 10 of 1998 which represents a change of the Act No. 7 in 1992 and RI Law No. 4 of 2004 on the deposit insurance agency. This study uses qualitative descriptive method by describing the transaction and whether the system of calculation of interest on deposits at the bank branch pariaman villages have been effective. The data used are primary data in the form of interviews and secondary data in the form of the action plan of PT. Bank Nagari Branch Pariaman. The results showed that the policies and procedures and strategies implemented by PT. Bank Nagari Branch Pariaman in its deposit transaction has been effective in accordance with the minimum standards set by Bank Indonesia which is adapted to the scope of the bank's business.
    Date: 2019–03–01
  8. By: Afriyeni, Afriyeni; Marlius, Doni
    Abstract: The purpose of this study is to find out how much the rate of return earned on investments in banking companies studied, to find out how to obtain the level of risk in the stock investment banking firm selected as a sample, and to determine how the analysis of macroeconomic variables on the level risk and rate of return on investments in companies studied. In this study, the population is banking companies listed in Indonesia Stock Exchange (BEI) from 2005 to 2007 as many as 30 companies. The samples studied were limited to 10 banking companies from 2005-2007. The method used was purposive sampling method. Based on the calculations, the rate of return and the highest level of risk that is happening at PT. Kimia Farma (Persero) Tbk amounting to 8% with a risk level of 24.86% and the lowest or loss (capital loss) that is on the PT. Kalbe Farma Tbk was -0.08% with a 6.77% risk level that occurred in 2007. From the years 2005-2007 the value of GDP has fallen so the rate of return of each stock is not worth the risk to be faced. In the last three months in 2005 until September 2006, inflation ranged between 14% -19% and in October 2006 through the end of 2007, the inflation rate did not exceed 7%. With high inflation, the stock returns at year-end 2005 to end 2006 down and inflation is down and the rate of return of sahampun began to increase. At the end of 2005 not only the value of high inflation, but the SBI interest rate is also high and the weakening of the rupiah against the U.S. dollar resulted in the investment climate in Indonesia is not good enough for investors.
    Date: 2019–03–10

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.