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Shariah capabilities and value propositions of Islamic banking

Karim Ullah (Institute of Management Sciences, Peshawar, Pakistan)
Muhammad Ashfaque (Institute of Management Sciences, Peshawar, Pakistan)
Muhammad Atiq (Institute of Management Sciences, Peshawar, Pakistan)
Muhammad Khan (Department of Management Sciences, Abdul Wali Khan University, Mardan, Pakistan)
Arif Hussain (Department of Management Sciences, Abdul Wali Khan University, Mardan, Pakistan)

International Journal of Islamic and Middle Eastern Finance and Management

ISSN: 1753-8394

Article publication date: 3 January 2023

73

Abstract

Purpose

The purpose of this paper is to explore the types of Shariah capabilities of Islamic banks, which provide bases for the types of Shariah value propositions, offered by the relationship managers in their front-line service experiences with the customers.

Design/methodology/approach

A resource-based view of Shariah capabilities and a service-dominant logic view of value propositions are adopted. Fifteen relationship managers from multiple Islamic banks in Pakistan are interviewed to find a typology of Shariah capabilities and a resultant typology of value propositions for Islamic banks.

Findings

The findings suggest that Islamic banks claim to possess five types of Shariah capabilities, namely, Shariah governance capability (SGC), Shariah compliance capability (SCC), Shariah monitoring capability (SMC), Shariah structuring (product) capability (SSC) and Shariah learning capability (SLC). These capabilities lead to four types of values propositions, namely, Shariah identity value (SIV), Riba-free value (RFV), Shariah disclosure value (SDV) and Tangibility value (TV) of the real assets in transactions.

Research limitations/implications

The study has relied on the front-line experiences of relationship managers who are connected to the Islamic banks’ capabilities inside the banks and the value propositions that they offer to show relationships with customers in front-line service experiences. Other stakeholders may have different perspectives on both capabilities and value propositions.

Originality/value

This paper contributes to Islamic finance theory by theoretically and empirically showing two typologies for the Islamic banks' capabilities and value propositions, respectively.

Keywords

Citation

Ullah, K., Ashfaque, M., Atiq, M., Khan, M. and Hussain, A. (2023), "Shariah capabilities and value propositions of Islamic banking", International Journal of Islamic and Middle Eastern Finance and Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IMEFM-12-2019-0518

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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