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This paper aims to gauge the level of corporate social responsibility (CSR) disclosure of Islamic banks of Pakistan.

The annual reports of Islamic banks of Pakistan from the year 2003 to 2017 were considered as the source of data. The content analysis method was used to gauge the level of CSR disclosure with the help of the CSR disclosure index. Islamic banks proclaim religiously motivated and ethical institutions; hence, full disclosure was expected from Islamic banks in the domain of CSR.

The average level of CSR disclosure of Islamic banks after a one-and-a-half decade of Islamic banking in Pakistan is 31.23%, which is far below the expected level of CSR disclosure and even below the mean level. The mean comparison analyzes show that the level of CSR disclosure differs among the Islamic banks, old and large Islamic banks are disclosing more information, in addition, the local Islamic banks have a relatively high level of CSR disclosure as compare to the foreign Islamic banks.

The current CSR disclosure policy of the government regarding corporations in Pakistan is insufficient. There is a need to revise this policy which may result in higher CSR disclosure. The results indicate, that there is a difference in CSR disclosure among local and foreign Islamic banks, so this policy must address this aspect as well.

Islamic banking proclaims a new wave of the corporate that has higher social objectives, but a contradiction exists among the ideology and reality of social responsibility of Islamic banks. Then, this study also supports that the same dilemma of low CSR disclosure also prevails in the Islamic banks of Pakistan.

Sustainability is essential to the ongoing operations of banks, though it is much less clear how Islamic corporate governance (ICG) promotes economic sustainability (ES) and thereby prevents bankruptcy. To explore the unexplored, this study aims to examine the efficacy of ICG in preventing bankruptcy and enhancing the ES of Islamic banks operating in Pakistan.

The current study measures ES through Altman's Z-score to analyze the level of the industry's stability and consequently examines the effect of ICG on the ES of Islamic banks in Pakistan for the post-financial-crises period. Using the country-level data, this study utilized a fixed-effect model and two-stage least squares (2SLS) techniques on balanced panel data spanning from 2009 to 2020 to provide empirical evidence.

The empirical results unveiled that board size and meetings have a significant positive influence on the ES while managerial ownership demonstrated an unfavorable effect on ES. Interestingly, the insignificant effect of women directors became significant with the inclusion of controlled variables. Overall, the findings indicate that ICG is an efficient tool for promoting ES in Islamic banks and preventing them from the negative effects of emerging crises.

The findings provide concrete insights for policymakers, regulators and other concerned stakeholders to execute a sturdy corporate governance system that not only oversees the economic, social and ethical aspects but also provides measures to alleviate the impacts of potential risks like the COVID-19 pandemic.

Examining the role of ICG in alleviating bankruptcy risk is an informative and useful endeavor for all social actors.

To the best of the authors’ knowledge, this study is one of the first efforts to provide evidence-based insights on the role of ICG in preventing bankruptcy and offers a potential research direction for ES.

This study aims to find the determinants of internal and external customer satisfaction of Islamic banks of Pakistan through service quality indicators that are assurance, reliance, empathy, tangibility, responsiveness. Compliance has also been added as a determinant of customer satisfaction. In this study, customers are divided into two groups, internal customers are those who are an employee in the Islamic bank and also an account holder. While external customers are account holders only in Islamic banks of Pakistan.

In this study, a quantitative research approach is used for analyzing the behavior of internal and external customers of Islamic banks in Pakistan. The instrument which is used to analyze the study’s data, is a structured five-point Likert-scale questionnaire. The structural model was analyzed with the help of the partial least squares structural equation modeling approach.

This study concluded that internal customers of Islamic banking are well aware and have full information and their level of satisfaction is positive toward the bank’s services. While external customers feel satisfied while using the Islamic banking services in Pakistan. Service quality indicators are positively and significantly related to customer satisfaction in the external customer model. On the other hand, some of the indicators are not showing a significant impact on the internal customer multi-group analysis shows a difference of coefficients are insignificant between internal and external customers.

This study helps policymakers, to understand the behavior of internal and external customers of Islamic banking in Pakistan for creating favorable policies for an interest-free banking service.

This research study provides an analysis of the customer satisfaction of Islamic banks in Pakistan by dividing Islamic bank customers into two groups (internal and external customers). The purpose for dividing Islamic bank customers into two groups is that this study wants to highlight that external customer’s perception is the same as internal customers or not? Before this study, it is difficult to find single research on this topic, whereas only one study is find-out on the factors that affect internet banking adoption among internal and external customers.

This study aims to investigate the performance differences of Islamic and conventional banks in Pakistan by using financial ratios.

This study analyzed 5 Islamic and 19 conventional banks for the periods of 2007-2014. Two types of analyses were performed – sample t-test and logistic regression. Analysis was also performed on sub-sample considering crisis effects.

It was found that Islamic banks are relatively better in profitability, efficiency, risk and liquidity management, while conventional banks are superior in asset quality. Higher efficiency of Islamic banks contradicts with previous studies conducted in Pakistan. Probable reasons for this include phenomenal expansion of Islamic banking industry and its broad appeal to customers in Pakistan. Risk management practices of Islamic banks are superior to conventional banks, as Shariah rules restrict pure speculation in monetary terms. Better asset quality of conventional banks is attributed to their recognition and product diversity. During the crisis, Islamic banks were found less profitable than their counterparts.

This study suggests that high operational efficiency of Islamic banks should be converted into technical efficiency by improving human resource, introducing innovative market-oriented products and prudent resource allocations. As operational efficiency does not promise returns in long term, to sustain ongoing phenomenal growth of Islamic banking, management needs to gain customer trust.

This is an original research that compares performance differences across Islamic and conventional banks by using financial ratios.

The aim of this study is to examine the perceptions of consumers on Islamic banking and finance in Pakistan. Islamic finance is an emerging phenomenon, and its survival depends on the availability, affordability and awareness. This paper attempts to fill the gap in the literature by exploring the perceptions of consumers and bankers in an attempt to gain insights so that the availability of products and awareness can be increased.

The study uses a regression model by using perception as a dependent variable and awareness, knowledge and religious motivation as independent variables. Primary data is collected using 150 questionnaires distributed amongst finance students in several universities and employees of Islamic banks in the Khyber Pakhtunkhwa (KPK) Province of Pakistan.

The findings reveal that overall consumers’ perception is positive about Islamic banking and finance in Pakistan. Statistical analysis shows that awareness, knowledge and religiosity level have a positive influence on the perception of consumers about Islamic financing products and services in Pakistan. To improve the awareness and understanding, Islamic banks could make better marketing strategies and could increase their presence by mosque visits and conferences. Cooperation between the industry and scholars could help in providing more innovative products to the consumers.

There has been a limited amount of work carried out on the perceptions of consumers about Islamic banking in Pakistan. The present study represents the start of a larger context for examining Islamic banking practices in Pakistan. The findings of the study can be used as a reference in future research projects in the areas of perceptions and awareness.

Little research has been conducted to study this problem from the perspectives of consumers and Islamic banking employees. Most of the research associated with Islamic banks fails to pay attention to these stakeholder groups in one study.

The efficient and strong financial system is considered as the backbone of the economy to function properly along with to attract international capital flow, investment and employment. But, on the other hand, weakness in the financial system will create negative impacts on the economy by sabotaging society’s trust in the financial system. In Pakistan, the key component of the financial sector is the banking sector including conventional and Islamic banking. Pakistan is among the pioneer of the Islamic banking sector, its share of 15.6% deposits in the total banking sector. This paper aims to analyze the effectiveness of anti-money laundering (AML) legislation in the Islamic banking sector of Pakistan.

The study is doctrinal legal research. The semi-structured interview approach for analysis have been adopted to analyze the materials used in the study to attain the objective. The survey approach was used in critically analyzing the effectiveness of AML laws in conjunction with Islamic banking of Pakistan by incorporating the expert’s views and perceptions. The interviews conducted through electronic media including email, WhatsApp and LinkedIn.

The findings revealed that the State Bank of Pakistan is playing an active role and bringing stringent updates and regulations from time to time for the enforcement of these legislations. The irony is that these laws are not implemented in a proper way due to a lack of coordination among legislative authorities and the banking sector.

As money laundering is an international recognized offense, the study is based on only the Islamic banking sector of Pakistan. This is a very extensive and contentious matter, and this study is impeding money laundering operations and their analysis to the Islamic banks only.

It is recommended that more efficient laws and regulatory environments are a needed in the Islamic banking sector of Pakistan accompanied by proper and timely implementations of these laws with the joint collaboration of national and international agencies.

This is the first study that incorporated the expert’s opinion from diverse background to analyze the effectiveness of AML legislation with special reference to the Islamic banking sector of Pakistan and contribute significantly in providing greater insight in improving AML legislations in Pakistan.

This study aims to spotlight and explore various determinants of Islamic social reporting (ISR) in Islamic banks of Pakistan.

The authors have used firm size, firm profitability, firm age, board size and board independence as determinants of ISR. The authors collected data from Islamic banks listed on Pakistan Stock Exchange for the period 2012–2019. Multiple estimation techniques, i.e. fixed effect model, random effect model and one-step difference generalized method of moment (GMM), have been applied.

Random effect model was found to be more robust as compared to fixed effect model and one-step difference GMM. The results reported by the random effect model, preferred among the three, show that firm size, firm profitability, firm age and board size are important determinants of ISR in Islamic banks of Pakistan, while board independence does not determine social reporting for Islamic banks in Pakistan. Although social reporting in annual reports of Islamic banks in Pakistan is increasing, further improvement and compliance is required to ensure accountability and transparency in financial reporting as recommended by Islamic teachings. The study has certain managerial implications, especially for top management of Islamic banks.

To the best of the authors’ knowledge, this study is the first to discuss determinants of ISR in Islamic banks of Pakistan. The developed framework herein provides a precise guideline for Islamic banking to enhance their performance, which has never been discussed before.

This paper aims to empirically assess the contribution of Islamic banks toward the financial stability of Pakistan. For this, the authors investigate the relative financial strength of Islamic banks and their contribution toward the financial stability. They also examine the relationship between the competitive conduct of banks and banking system stability.

The authors use quarterly data of ten conventional banks, four full-fledged Islamic banks and six standalone Islamic branches of conventional banks of Pakistan for the period 2006-2012. The z-score has been computed and used as the measure of stability of banks and the random effects estimator applied to quantify the impact of bank-specific variables and macroeconomic indicators on the financial stability. The empirical framework used in the paper enables the authors us to examine the differential effect of each underlying variable on the financial stability across Islamic and conventional banks. To check the robustness of the results, the authors have estimated several models with different specifications.

The regression results indicate that income diversity, profitability ratio, loan to asset ratio, asset size and the market concentration ratio of banks have significant effects on the stability of banks. Comparing Islamic and conventional banks, notable differential effects of the empirical determinants of financial stability for Islamic and conventional banks have been observed. The results suggest that Islamic banks have performed better as compared to conventional banks and contributed more effectively in the stability of financial sector. Overall, the results depict that the contribution of Islamic banks toward the financial stability has been reasonable and prospective.

The empirical results of the paper are very useful not only for banks’ managements but also for the investors, bank customers and policymakers. Specifically, the findings help in enhancing our understanding as to how the bank-specific variables and macroeconomic indicators are related to the financial stability of the banking system. The results also help understand the role of both Islamic and conventional banks in the financial stability. Further, the results suggest that the financial soundness can be enhanced by creating healthy competition in the banking industry. The results about macroeconomic indicators imply that protective measures are required to intensify (mitigate) the positive (negative) effect of gross domestic product (inflation) on banks’ financial stability.

This paper provides an overall comparative analysis of financial stability of both Islamic and conventional banks of Pakistan. First, the paper computes the z-score for each bank included in the sample, and then, it performs the regression analysis to study how bank-specific variables and macroeconomic factors are related to the financial stability of banks. Unlike the previous studies, our empirical framework enables the authors to examine the differential effect of each underlying variable on the financial stability across Islamic and conventional banks.

This study aims to explore the potential determinants of customers’ satisfaction with the Islamic banking system and highlights the fact that both internal and external factors play key roles in customer satisfaction (CS) during the COVID-19 pandemic.

Primary data from six Islamic banks (Al Baraka Bank Ltd, BankIslami Pakistan Ltd, Burj Bank Ltd, Dubai Islamic Bank Ltd, Meezan Bank Ltd and MCB-Islamic Bank Ltd) were analysed using a binary logit method.

The results showed that internal factors such as hand sanitisation facilities, strict compliance with wearing a mask before entering the bank, the distance between customers and dealing officers, an organised network of branches (in terms of health safety protocols), the behaviour of dealing officers and extended banking hours contributed significantly to enhancing the satisfaction of Islamic banking customers during the pandemic in Pakistan. The results showed that high service charges on loans have a significant adverse impact on CS. Concerning external factors, the results showed that mass media platforms that can update customers about new services and customer transactions’ processing timing, the number of operational branches in the pandemic period, available parking space in front of a bank and recommendations from family and friends to open an account with a particular bank increase CS levels.

The study’s results will be helpful for the policymakers and practitioners to design such policies that can promote the Islamic banking system in developing countries such as Pakistan.

Under the pandemic situation, the present study highlights the internal and external determinants of Islamic banking customers’ satisfaction in Pakistan. The study provides a foundation for Islamic Banks to revise their policy frameworks and marketing strategies to attract customer interest and improve their satisfaction levels.

The purpose of this paper is to investigate the relationship between customer satisfaction and six dimensions of service quality (CARTER model) in Islamic banks of Pakistan, the UK and UAE.

This study uses a sample of 225 customers of Islamic banks; 75 responses have been taken from each country. Structured questionnaire technique has been used to collect data.

The paper's findings reveal that Pakistani and UK Islamic banking customers consider assurance, reliability and empathy as significant factors for customer satisfaction, whereas UAE customers consider assurance and tangible as significant dimensions of satisfaction.

The study's limitation relates to the sample size of the respondents.

This study is significantly important for the academic point of view, as well as for the practitioners, managers and policy makers to find out the pattern of customer satisfaction in terms of service quality for Islamic banks.

The current study is of particular value because it is a comparative study of customer satisfaction and service quality dimensions (CARTER model) of Islamic banks in Pakistan, UK, and UAE.