nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒06‒15
six papers chosen by
Bernardo Batiz-Lazo
Northumbria University

  2. Islam and the State: Religious Education in the Age of Mass Schooling By Bazzi, Samuel; Hilmy, Masyhur; Marx, Benjamin
  3. Parameters of Profitability: Evidence From Conventional and Islamic Banks of Bangladesh By K. M. Golam Muhiuddin; Nusrat Jahan
  4. Evaluation of Accounting and Market Performance: A Study on Listed Islamic Banks of Bangladesh By Nusrat Jahan; M. Ayub Islam
  5. How Islamic finance contributes to achieving the Sustainable Development Goals By OECD
  6. Determinants of Profitability of Banks: Evidence from Islamic Banks of Bangladesh By Nusrat Jahan

  1. By: Ahmad MUHAMMAD GUMEL (Jigawa State College of Education, Gumel)
    Abstract: The purpose of the study is to introduce a new Islamic Double Degree Model that can be use in the longrun to overcome the challenges of qualified manpower for Islamic banking industry. A critical system of literature review with empirical evidences was adopted as a methodology to achieve our purpose. The paper found shortage of Shari?ah scholars as a challenge to the future survival of Islamic banking. Also, Islamic banking employees including senior managers that were recruited from conventional sources lacking the necessary knowledge of Shari?ah principles poses another similar threat. The current Islamic education system was found not sufficient enough to provide the needed supply of ?Islamic experts?. Islamic Double Degree is timely. Other methods and analysis of investigation to validate our findings is beyond the scope of this paper. Also, a comprehensive model with course contents and structure is not provided. The study is primarily beneficial to students of learning and academicians who can delve into further research to support and substantiate our findings. For the researcher, the paper contributes to the stream of existing literature.
    Keywords: Islamic banking, Double degree, Shari?ah scholars, Education, Islamic finance
    JEL: G20
    Date: 2020–02
  2. By: Bazzi, Samuel; Hilmy, Masyhur; Marx, Benjamin
    Abstract: Public schooling systems are an essential feature of modern states. These systems often developed at the expense of religious schools, which undertook the bulk of education historically and still cater to large student populations worldwide. This paper examines how Indonesia's long-standing Islamic school system responded to the construction of 61,000 public elementary schools in the mid-1970s. The policy was designed in part to foster nation building and to curb religious influence in society. We are the first to study the market response to these ideological objectives. Using novel data on Islamic school construction and curriculum, we identify both short-run effects on exposed cohorts as well as dynamic, long-run effects on education markets. While primary enrollment shifted towards state schools, religious education increased on net as Islamic secondary schools absorbed the increased demand for continued education. The Islamic sector not only entered new markets to compete with the state but also increased religious curriculum at newly created schools. Our results suggest that the Islamic sector response increased religiosity at the expense of a secular national identity. Overall, this ideological competition in education undermined the nation-building impacts of mass schooling.
    Keywords: education; Islam; Nation building; religion; school competition
    JEL: H52 I25 N45 P16 Z12
    Date: 2020–05
  3. By: K. M. Golam Muhiuddin; Nusrat Jahan
    Abstract: This paper evaluates the commercial banks of Bangladesh in terms of profitability dimension of performance and also examines the impact of selected determinants and banking system on this dimension of performance. Evaluation of trend in profitability of listed commercial banks of Bangladesh reveals that, on an average, profitability is exhibiting a decreasing trend over the selected period; however, the profitability performance of Islamic banks remained rather high compared to Conventional banks. Profitability measured by Return on Asset is found to be significantly affected by the bank-specific factors, industry-specific factor and the banking system. However, macro-economic factors evidently have no significant impact on profitability of commercial banks of Bangladesh.
    Date: 2020–05
  4. By: Nusrat Jahan; M. Ayub Islam
    Abstract: This study compared accounting performance of Islamic banks with their market performance and also assessed the effect of firm-specific determinants and cross-sectional effect on accounting and market performance. This study selected all six listed Islamic banks of Chittagong Stock Exchange and the data were collected for the period of 2009 to 2013. This study reported that Social Islamic Bank Limited exhibits superior accounting performance whereas Islami Bank Bangladesh Limited holds better market performance. However, banks exhibiting superior accounting performance reported to have inferior market performance. Further, random-effect model for ROA reports that there exist significant entity or crosssectional effect on ROA; and operational efficiency and bank size are significantly negatively associated with ROA. However, random-effect model for Tobins Q failed to ascertain entity or cross-sectional effect on Tobins Q and also reveals that firm-specific determinants have no significant impact on Tobins Q.
    Date: 2020–05
  5. By: OECD
    Abstract: This report identifies the opportunities that Islamic finance presents for donors. To achieve these, Arab and OECD Development Assistance Committee donors need to mobilise innovative forms of financing and deliver the call to deepen the transformation of development finance systems. DAC members could do so by broadening and deepening exposure to alternative forms of financing, such as Islamic finance. Islamic finance represents USD 2.5 trillion – a share of which could be mobilised for development – and its tenets resonate across the member countries of the Organisation for Islamic Cooperation and beyond. Arab donors could harness Islamic finance, as a means to strengthen partnerships with DAC members, whilst increasing the effectiveness of existing aid flows in countries and contexts where they have considerable access. Doing so could create a more equitable and stable development finance order capable of delivering the SDGs and achieve greater impact in partner countries. Both communities would then be able to chart a path for all development actors, notably the private sector, development finance institutions and other bilateral donors. This report provides a set of action points for Arab and DAC donors, highlighting the benefits of engaging in and co-operating through Islamic finance.
    JEL: O19 O2 Q01 O29 O16 G28 F3
    Date: 2020–06–11
  6. By: Nusrat Jahan
    Abstract: This empirical study is conducted on randomly selected six Islamic banks of Bangladesh. This study utilizes widely used Measures of banks profitability which are Return on Asset (ROA), Return on Equity (ROE) and Return on Deposit (ROD) and these are also commonly suggested tools by Bangladesh Bank to evaluate banks performance. In addition, this study examined the relationship of ROA with Asset Utilization (AU), Operational Efficiency (OE)and ROD. The result reveals that EXIM Bank Limited is performing very good in terms of all profitability measures ROA, ROE and ROD even though average asset size of Islami Bank Bangladesh Limited is found to be largest among all six Islamic Banks. The result of regression found the explanatory variable ROD is significantly associated with ROA but failed to establish any significant association with operational efficiency and asset utilization.
    Date: 2020–05

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