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There are many areas of research that are untapped in Islamic banking, and human capital is one of them. This paper aims to systematical review the relevant literature on human capital and Islamic banking.

The review process involved a structured search using well-established academic databases, Scopus and Web of Science, resulting in the selection of relevant articles. The paper has been divided into three major themes, besides other discussions on the literature, including methods of measuring human capital, determinants of human capital and human capital and performance of Islamic banks.

A few pioneering studies have explicitly examined human capital in the Islamic banking domain, while others have encompassed it under the broader umbrella of intellectual capital. The most common method of measuring human capital is accounting based, while few have adopted disclosure and survey methods as well. There are few studies that explored the determinants of human capital having focus on corporate governance, while many of the studies have explored the nexus of human capital and financial performance.

This review strongly highlights the need for more focused research on human capital within the Islamic banking sector. As Islamic banking necessitates unique human capital characteristics, it is essential to delve deeper into this aspect. Furthermore, there is a call to expand the human capital index by incorporating comprehensive aspects relevant to Islamic banking. An important area that requires further exploration is the role of Shariah governance in shaping human capital development within Islamic finance, understanding the reasons behind the observed negative correlation.

Despite its significance, the relationship between human capital and Islamic banking has received limited attention. This review paper not only addresses this gap but also lays the groundwork for future studies in this important and emerging field.

This study aims to investigate the implications for financial innovation and product development of differences between schools of jurisprudence (fiqh) pertaining across regional Muslim markets, and the consequences for global financial institutions.

The methodology is qualitative, drawing upon several sources. Firstly, differences in interpretation regarding the economic and moral responsibilities of financial institutions in Islamic and secular contexts. Secondly, contrasting tenets of schools of Islamic jurisprudence regarding the permissibility of products traded intra Muslim markets. Thirdly, characteristics of complex financial instruments traded in global secular markets prior to the credit crisis of 2007–2008.

Differences between Islamic and global secular interpretations regarding responsibilities of financial institutions militate against integrated markets across which products can be seamlessly traded. Global financial institutions should recognise that different Islamic schools of jurisprudence prioritise either legal form or substance of financial products, but not both simultaneously. This should be considered when designing new products for regional Muslim markets.

Global financial institutions which focus upon the legal (micro) form of new Islamic products should relate in investor prospectuses and marketing materials the extent to which these accommodate Islamic jurisprudence’s equal (macro) concern for public interest or maslahah. This may comprise the reallocation of risk from those unable to bear it to those willing to assume it for a price, reinforcing rather than compromising economic stability.

This study evaluates implications for product development and marketing for global financial institutions active in regional Muslim markets across which different Islamic schools of jurisprudence apply.

Micro, small and medium-sized enterprises (MSMEs) are vital for economic growth in developing countries. Yet, little research has explored the link between Islamic principles and MSME performance, especially in Uganda. This study aims to investigate the relationship between Islamic financial principles and MSMEs’ performance in Makindye Division Kampala – Uganda.

This study used a correlational research design involving 86 respondents from 30 MSMEs between January and May 2023. Data collected through questionnaires was analyzed with Statistical Package for Social Sciences, examining three independent variables: ethicality, Halal investment and prohibition of riba, in relation to MSME performance.

The results revealed significant relationships between these variables and MSME performance. Prohibition of riba (r = 0.296, n = 86, p = 0.006), Halal investments (r = 0.308, n = 86, p = 0.004) and ethical principles (r = 0.283, n = 86, p = 0.008) all exhibited a statistically significant relationship. Regression analysis with R = 0.405, R² = 0.164 and adjusted R² = 0.134 indicated that all hypothesized variables were significant predictors of MSME performance. Based on findings, this study rejected the null hypothesis, confirming a moderately positive and significant relationship between Islamic financial principles and MSME performance.

This study underscores the importance of active involvement from key stakeholders such as the Uganda Halal Bureau, Uganda Muslim Supreme Council, Islamic financial institutions and government agencies in integrating robust support mechanisms for MSMEs into their strategic frameworks. Such efforts could enhance Uganda’s economic landscape, aligning with the experiences of Malaysia and Indonesia in leveraging Islamic principles for economic growth.

The present study aims to evaluate the VBI strategies that have been implemented and to analyze the implementation challenges that BIMB has encountered.

A case study method was used to generate an in-depth and multi-faceted understanding of VBI strategy implementation in Bank Islam Malaysia Berhad (BIMB). A semi-structured in-depth interview was conducted with BIMB which is among of the earliest members of the VBI Community of Practitioners (CoPs). The data were transcribed and analyzed based on the content and thematic analyses.

This paper provides insights into how Islamic bank, i.e. BIMB, implement initiatives and strategies for adopting VBI based on the four underpinning principles. VBI is seen as a continuous strategy implementation of what has been practiced in BIMB, for instance, the Sadaqah House initiative introduced in 2018.

The primary limitation of the study is that it only focused on BIMB and does not represent the larger members of VBI CoPs among Islamic banks in Malaysia. A larger sample would have given more trustworthy results and could give better insights on the VBI implementation.

A good strategy implementation can be realized by generating a positive and sustainable economic, societal and environmental impact consistent with sustainable shareholder returns and long-term interests. The regulator should consider the policy implications of this study by strengthening the VBI and encouraging more Islamic and conventional banks to adopt it based on the findings.

The originality of this study is that it focuses on strategy implementation and the challenges facing Islamic bank toward VBI. It provides information on the implementation strategy of VBI in Islamic banks in Malaysia and facilitates other Islamic banking institutions, specifically future members of CoPs in creating a strong ethical foundation.

This study aims to explore and analyze the issues in weightages-based profit distribution mechanism in Islamic banks from Shari’ah, practical and regulatory perspectives.

A qualitative research approach was used in this study based on primary data collected through semi-structured interviews from Shari’ah practitioners and senior industry experts in the field of pool management in the Islamic Financial Services Industry of Pakistan.

The current study found that the weightages-based mechanism conforms to the rules of Mudarabah and; therefore, permissible. However, the elements of exploitation, transparency and fairness require further research, as these elements seem to exist in this mechanism. It was also found that there are many loopholes in the regulatory guidelines for pool management in Islamic banking institutions (IBIs) in Pakistan resulting in practical issues.

The findings of this study may help improve pool management in IBIs, which in turn may cater the objections raised by academicians, customers and industry experts. Moreover, the alternative solution based on the findings of this study can be transformed into a proposal for regulators to take necessary actions against unfair profit distribution and issue further improved guidelines for IBIs in Pakistan.

To the best of the authors’ knowledge, very limited studies have been conducted on pool management particularly with issues from different perspectives and alternative solutions have been suggested that may act as a proposal for IBIs as well as regulatory authorities.

Using the consumption values theory (CVT) as a baseline model, this study aims to evaluate the factors that influence farmers' decision-making behavior regarding interest-free agricultural financing products.

Data were gathered from 321 banking customers using questionnaires who are engaged with the agriculture sector and wish to obtain finance related to Islamic agriculture products.

The findings demonstrate that the decision behavior for Islamic agriculture financing products is highly influenced by epistemic, emotional and functional values. On the contrary, conditional and social values do not influence farmers’ choice behavior for Islamic agriculture financing products.

There are a few limitations in this study. Initially, the study's geographic scope is limited to bank customers within the agriculture sector who live, in particular, in Southern Sindh province, Pakistan. Next, researchers extended the CVT to a specific focus on agricultural financing products by Islamic banks. Future researchers should take these concerns into consideration for better applicability, and it is anticipated that the research approach will be refined to best expand the results. Lastly, future researchers are expected to broaden the theory's relevance by considering the socio-cultural environmental conditions (culture, religious values and approaches) and social conditions in a wider range of Islamic agricultural financial instruments.

The findings are beneficial for practitioners intending to advance innovative Islamic agriculture financing products to cater to Pakistani farmers’ needs.

This research extends the CVT that offers valuable information for the development of consumers’ behavior in the setting of interest-free agricultural financing.

This study aims to empirically investigates the effect of the COVID-19 pandemic on ethical and nonethical stocks in Indonesia. Ethical stocks which are characterized by moral-based companies’ activities and lower debt are expected to have better resilience during the COVID-19 crisis compared to nonethical stock.

This study observes 589 firms of ethical and nonethical stock during sample periods ranging from March 2, 2020 (first case announced) to June 30, 2021. Panel regression, with some control variables, was applied.

Testing firms in Indonesia revealed a significant difference in stock resilience, in which ethical stock has a better resilience compared to nonethical, with Islamic socially responsible investment (SRI) stock having the highest resilience, followed by Islamic stock and then SRI stock. This study documents a significant effect of some financial criteria on the stock resilience, namely, return market (RM), market capitalization (MCAP) and share turnover (TURN). Overall, after splitting the sample into different time horizons, this study consistently reveals that ethical firms have better resilience compared to nonethical stocks.

This study makes several contributions to the literature on Islamic finance, especially concerning Islamic screening with SRI factors. In practical terms, this study supports the argument that focusing on integrating environmental, social and governance criteria in sharia screening will improve the quality of Islamic firms. The “Islamic” label is not only a marketing label but also a quality certification.

This study can be used as a reference for developing Islamic finance more focused on sustainability issues including socioeconomic and human development by improving the quality of screening of Islamic firms. Therefore, this study suggests that the establishment of Islamic SRI index is very crucial and significant to promote ethical-based investment.

This study investigates the dynamic interdependence between Islamic and conventional stock markets in the Gulf Cooperation Council (GCC) economies and the influence of global financial uncertainties on this interconnection.

The study employs the time-varying parameter vector autoregressions (TVP-VAR) technique and analyzes daily data from December 1, 2008 to July 14, 2021.

The research reveals robust interconnectedness within individual countries between Islamic and conventional stock markets, particularly during crises. Islamic stock markets exhibit greater susceptibility to spillover effects compared to conventional stocks. The UAE and Kingdom of Saudi Arabia (KSA) stock markets are identified as net transmitters of spillovers, while Oman, Bahrain and Kuwait receive more spillovers than they transmit. Global financial uncertainty measures (GVZ, USEPU and UKEPU) positively influence financial market interconnectedness, with EVZ exhibiting a negative impact while VIX and OVX remain statistically insignificant.

Investors and portfolio managers in Oman, Bahrain and Kuwait should carefully evaluate the UAE and KSA markets before making investment decisions due to the latter's role as net transmitters in the region. Additionally, it is emphasized that Islamic and conventional stocks should not be considered interchangeable asset classes for risk hedging.

Investors must be aware that Islamic and conventional stocks cannot be used as an alternative asset class to hedge risk.

The present article offers valuable insights for practitioners and researchers delving into the comparative analysis of Islamic and conventional stock markets within the GCC context. It enhances our comprehension of the dynamic interdependence between Islamic and conventional stock markets in the GCC economies and the impact of global financial uncertainties on this intricate relationship.

This study aims to investigate the impact of trust in the metaverse on the Islamic banking sector, particularly in facilitating market success. Additionally, it seeks to explore the relationship between metaverse-driven brand image, product features, service quality and overall performance in the market.

Data were collected from 187 participants in Jordan, with the SmartPLS software used to test the hypotheses.

The findings reveal a significant impact of metaverse-enhanced brand image, product features and service quality on Islamic banking market performance. Furthermore, customer trust in the metaverse plays a significant role in shaping the relationship between product features, service quality and Islamic banking market performance.

The study’s practical implications still suggest the need for a more holistic metaverse-driven approach. Investing in service quality initiatives alone may not adequately build and sustain customer trust in the metaverse. Instead, transparent communication on ethical practices in the metaverse is required to reinforce trust and magnify the positive influence of superior service quality in the metaverse.

This conceptual paper aims to delineate a comprehensive blueprint for the integration of environmental, social and governance (ESG) principles within the framework of Takaful operations, guided by the principles of Maqasid al-Shariah. The primary purpose is to establish a robust foundation for the sustainable transformation of Takaful, aligning it with ethical finance and Islamic values.

Using a theoretical research approach, this study delves into the multifaceted dimensions of ESG principles and the principles of Maqasid al-Shariah within the context of Takaful operations. The 17 SDGs/ESG principles and Maqasid al-Shariah are integrated to give a thorough framework for comprehending the disclosure index from western and Islamic ethical viewpoints. The research critically analyses current literature, scholarly works and authoritative sources, drawing inspiration from established approaches. Qualitative content analysis examines and compiles pertinent ideas, and the expert validates the disclosure index. It identifies key convergence, compatibility and divergence points between ESG principles and Maqasid al-Shariah to construct a comprehensive framework for Maqasid-driven ESG integration in Takaful.

The paper presents a well-defined blueprint for Maqasid-driven ESG integration in Takaful, revealing substantial areas of alignment between the two frameworks. This alignment is particularly pronounced in protecting life, religion, intellect, lineage and wealth. The blueprint underscores the potential of harmonising ESG principles with the principles of Maqasid al-Shariah, providing Takaful operators with a roadmap for enhancing their ethical credibility, societal impact and environmental stewardship.

The blueprint outlined in this study opens new avenues for research at the intersection of Islamic ethics, responsible finance and sustainable development and signals the necessity of developing a standardised disclosure index. This index will serve as a vital tool for Takaful operators to transparently communicate their commitment to ethical and sustainable practices, facilitating a deeper understanding of Maqasid-driven ESG integration and bolstering transparency for all stakeholders. Further research into this disclosure index’s practical implementation, empirical validation and strategic implications is encouraged to advance responsible finance within the Takaful industry.

The proposed blueprint provides Takaful operators with a practical guide to align their operations with both ethical finance and Islamic principles. Embracing the principles of responsible governance, societal welfare and environmental sustainability, Takaful operators can enhance their product offerings, attract socially conscious stakeholders and contribute positively to both financial and ethical objectives.

Integrating Maqasid-driven ESG principles in Takaful signifies a commitment to broader social well-being. Through initiatives aimed at safeguarding life, religion, intellect, lineage and wealth, Takaful operators can play a pivotal role in fostering social cohesion, empowering communities and actively contributing to sustainable development goals.

This conceptual paper contributes to the field by presenting a unique blueprint for integrating ESG principles within Takaful operations, guided by Maqasid al-Shariah. The novelty of this approach lies in its holistic perspective on ethical finance, aligning Islamic values with contemporary global ethical imperatives. The blueprint offered here represents an original framework for responsible Takaful practices that resonate with evolving ethical standards and the enduring principles of Islamic finance.