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1 – 7 of 7Khalil Yahya Mohammed Abdo, Abu Hanifa Md. Noman and Mohamed Hisham Hanifa
This study aims to address how Islamic banks (IBs) and conventional banks (CBs) manage their liquidity and their speed of adjusting liquidity holdings both in the short- and long…
Abstract
Purpose
This study aims to address how Islamic banks (IBs) and conventional banks (CBs) manage their liquidity and their speed of adjusting liquidity holdings both in the short- and long term.
Design/methodology/approach
This study uses the partial adjustment model (PAM) on a sample of 445 banks from 17 Organisation of Islamic Cooperation countries over the period 2010–2018.
Findings
Results reveal that despite IBs’ placement of higher short-term liquidity buffer, they experience lower net stable fund ratio (NSFR) in the long term, relative to CBs. This study’s results also reveal that IBs enjoy higher and lower speed of adjustment (SOA) for NSFR in the long- and short term, respectively. Furthermore, the results suggest that bank-specific and macroeconomic factors weaken the liquidity SOA.
Practical implications
This study sheds light on the importance of the adjusting speed of bank liquidity in a bid to provide regulators with insights for enhancing liquidity holdings and emphasising the regulation of banks’ reaction pace to attain the target buffers.
Originality/value
This study estimates the liquidity adjustment speed of IBs and CBs by providing a comprehensive discussion and empirical evidence across countries. To the best of the authors’ knowledge, this study is the first to use PAM for the assessment of liquidity holdings in IBs and the first to examine SOA of short-term liquidity holdings in the banking sector.
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Nurul Shahnaz Mahdzan, Rozaimah Zainudin, Wan Marhaini Wan Ahmad and Mohamed Hisham Hanifa
In a dual financial system where both conventional and Islamic financial institutions co-exist, the motives behind customers’ choices of financial products remain a crucial factor…
Abstract
Purpose
In a dual financial system where both conventional and Islamic financial institutions co-exist, the motives behind customers’ choices of financial products remain a crucial factor to comprehend. Thus, this paper aims to examine the influence of Islamic financial literacy (IFL) and motives (religious, ethical and economic) on the holdings of Islamic financial products (IFPs).
Design/methodology/approach
The sample consists of 234 bank customers in Klang Valley, Malaysia, with data obtained through a convenience sampling method. The instrument used was a digital survey that was electronically sent to respondents.
Findings
Findings reveal that IFL and religious motives positively influence IFPs, whereas economic motives negatively influence IFPs. Ethical motives have no significant impact on IFPs.
Research limitations/implications
The findings imply that IFPs attract customers due to their adherence to Islamic teachings, indicating strong religious motives. However, the negative leanings of the economic motive suggest that customers may perceive IFPs as less favourable due to higher costs and risks relative to conventional products. Islamic financial institutions must widen their efforts in educating the public regarding IFPs on the benefits of adherence to Shariah principles and at the same time improve their products’ cost-benefits.
Originality/value
This study contributes to the literature by comprehensively examining IFPs in terms of both assets and financing products. In addition, IFL is measured in an all-inclusive way, covering different dimensions of knowledge related to Islamic savings, investments, protection and financing.
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Mahfuzur Rahman, Che Ruhana Isa, Ginanjar Dewandaru, Mohamed Hisham Hanifa, Nazreen T. Chowdhury and Moniruzzaman Sarker
This study aims to explore the underlying issues related to the development of socially responsible investment (SRI) sukuk in Malaysia. It identifies factors attracting investors…
Abstract
Purpose
This study aims to explore the underlying issues related to the development of socially responsible investment (SRI) sukuk in Malaysia. It identifies factors attracting investors and issuers, as well as challenges for the development of SRI sukuk (Islamic bond) in Malaysia.
Design/methodology/approach
This study conducted semi-structured interviews to collect data from the institutional investors, SRI sukuk issuers and arrangers, as well as researchers. A total of 19 experts were approached in which 10 participated in the interview. The thematic analysis technique is used to report the findings.
Findings
This study uncovers that social contribution through business activities (i.e. investment in the education sector) is the key motivational drivers for the investors and issuers. Besides, investment risks, lack of performance measurement standards, high transaction costs, risks of return, shortage of enough Islamic bonds, investors’ confidence and lack of awareness are the major challenges for the development of SRI sukuk instruments.
Research limitations/implications
Due to the challenges in finding experts on this subject matter, this study was able to manage only 10 interviews from the participants, which is a small sample size. However, the findings of this study cannot be ignored. Future research should carry out with a large sample size (i.e. at least 30 interviews) to validate the current findings.
Originality/value
This study is among the pioneer in Malaysia, which explores the influencing factors of selecting Islamic bonds as an investment option. This paper provides some valuable implications for investors through discovering the challenges for the growth of SRI sukuk in Malaysia, which can also be applicable in a global setting.
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Wan Marhaini Wan Ahmad, Mohamed Hisham Hanifa and Kang Choong Hyo
The purpose of this paper is to investigate the awareness of non-Muslims coming from a non-Muslim-majority country regarding Islamic financial services, in particular, the takaful…
Abstract
Purpose
The purpose of this paper is to investigate the awareness of non-Muslims coming from a non-Muslim-majority country regarding Islamic financial services, in particular, the takaful products.
Design/methodology/approach
This paper uses structured questionnaires to acquire and understand South Korean citizens’ perceptions of Islamic financial services (primarily takaful) to reinforce the scant previous literature in this area of research. The questionnaires are developed and adapted based on a previous study by Htay and Salman (2013). The sample consisted of 121 Korean people who were living in Ampang, a popular suburb for South Koreans in Kuala Lumpur.
Findings
The findings indicate that even South Korean citizens who have dwelled in Malaysia for a significant amount of time had little awareness of Islamic financial services. Upon personal explanation about the product, however, they showed a significant interest to get to know about takaful and a willingness to subscribe to it in the near future.
Research limitations/implications
Respondents are limited to only South Koreans who are residing in Malaysia.
Practical implications
Understanding the level of awareness about Islamic financial services among non-Muslims residing in Muslim-majority country.
Social implications
There is ample scope to penetrate the non-Muslim market for Islamic financial products.
Originality/value
There is a growing concern over the lack of research in the area of perceptions of Islamic financial services among non-Muslims from non-Muslim-majority countries. The lack of study in this area of research has often been overshadowed by research studies on perceptions of Islamic financial services among non-Muslim residents in Muslim-majority countries, which may have led to a dearth of proper strategies in the Islamic financial industry to penetrate non-Muslim-majority markets.
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Anna Che Azmi and Mohamed Hisham Hanifa
– This study aims to examine whether the financial reporting practices of organisations managing waqf (Islamic endowed trust funds) are Sharia-compliant.
Abstract
Purpose
This study aims to examine whether the financial reporting practices of organisations managing waqf (Islamic endowed trust funds) are Sharia-compliant.
Design/methodology/approach
This paper reports on a case study of two Islamic-based organisations that manage waqf. The financial statements of these organisations are analysed using content analysis to assess their compliance with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) Sharia Standard No. 33 (SS 33) on waqf.
Findings
The authors found that both Islamic-based organisations use different sets of accounting procedures and practices, but that these accounting practices do not contradict the Sharia requirements prescribed in the SS 33 on waqf. However, the SS 33 on waqf requires that waqf funds to be utilised as stipulated by the waqif (donor) and that the accounting practices of both organisations do not adequately address this disclosure requirement. This study also found that the existing accounting practices adopted by organisations that manage waqf need to incorporate more disclosure on their Sharia-based financing and their investment of waqf funds.
Research limitations/implications
This study found that the AAOIFI’s SS33 on waqf is a useful guide for identifying the gap between Sharia principles and conventional financial reporting practices for non-profit organisations, and that there are aspects of Sharia-based disclosure practices that are not adequately implemented in financial reporting practices of institutions managing waqf.
Practical implications
This study proposes two essential Sharia-based disclosure practices for Islamic-based organisations that manage Islamic-based funds such as waqf. These two aspects are the disclosure on whether waqf funds are adequately utilised as stipulated by the waqif (donor) and what modifications to their existing financial reporting of their Sharia-based financing and investments are required to comply with the unique nature of waqf.
Originality/value
This paper fulfils an identified need to study how Sharia principles can be incorporated into the financial reporting practices of organisations that manage Islamic-based funds such as waqf.
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Fathullah Asni, Mohd Amirul Mahamud and Jasni Sulong
The purpose of this paper is to implement the istibdal waqf concept using a geographical information system (GIS) for the benefit of socio-economics and Muslim cemetery waqf…
Abstract
Purpose
The purpose of this paper is to implement the istibdal waqf concept using a geographical information system (GIS) for the benefit of socio-economics and Muslim cemetery waqf management. GIS is a technique that provides clearer, precise and faster access to a location based on actual space data. It attempts to analyze the area that one wishes to develop to establish whether it fulfills the criteria set for istibdal.
Design/methodology/approach
This research was conducted qualitatively. The study begins with the development of the concept of istibdal waqf and the concept of GIS. The concept was developed by conducting a literature review of books, articles, newspapers, fatwa and circulars related to istibdal waqf and GIS. After the concept was formed, field studies were conducted on two mosques, namely, Jamek Jelutong Mosque and Masjid Jamek Sungai Nibong because both mosques have gravesites located within their compound. To obtain information on the problems faced by the mosques Jemaah community, researchers have interviewed the Mosque Committee Members and Jemaah Community in both mosques using the unstructured interviewing method. This process is essential in managing both material and spiritual for sustaining socio-economics of the society.
Findings
The results showed that by applying GIS technique could identify new land locations according to the criteria set by istibdal. Additionally, new location environments found through the GIS application can be viewed more clearly and accurately than using the manual method. The findings also revealed that some of the mosque managers and the heirs of the waqf grave land were not open-minded in accepting the istibdal concept of the grave that had been allowed by the Syarak until the process of expanding the mosque was affected. The study also found that the maslahah consideration was considered between doing istibdal waqf and not doing istibdal waqf, the maslahah of doing istibdal waqf is greater because general (umum) maslahah should be prioritized compared to the special (khusus) maslahah. In addition, this effort can appreciate the morality and ethics of waqf donors to donate their wealth or properties for benefit of society.
Research limitations/implications
This study only focuses on Muslim cemetery waqf in Penang Island.
Practical implications
This study is expected to benefit both material and spiritual where Muslim cemetery site can be developed for expanding mosque site and consequently able to accommodate the increasing of Muslim using the mosque.
Originality/value
This study proposes the transformation of the concept of istibdal waqf from the traditional methods to modern and advanced methods using the GIS application. The study also demonstrates how the software for solving the real problem can be used, i.e. the problem of a limited mosque space for sharing space with a cemetery in Penang.
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Nori Yani Abu Talib, Radziah Abdul Latiff and Aini Aman
This paper aims to improve the understanding of the institutional pressures that shape the intention to adopt waqf accounting and reporting. The study seeks to answer two research…
Abstract
Purpose
This paper aims to improve the understanding of the institutional pressures that shape the intention to adopt waqf accounting and reporting. The study seeks to answer two research questions as follows: what are the challenges in the adoption of waqf accounting and reporting in waqf institutions; and how do institutional pressures influence the adoption of waqf reporting in Malaysia. Drawing on the work of DiMaggio and Powell and Scott of institutional theory, this paper provides empirical evidence of institutional pressures on the adoption of waqf reporting in Malaysia and the challenges faced in adopting waqf accounting and reporting.
Design/methodology/approach
This study uses qualitative research method with an explanatory case study approach. Data are collected through semi-structured interviews with the accountants of State Islamic Religious Council and Customs of Terengganu, an informal conversation with the Deputy Director of Accountant Generals Department of Malaysia and document reviews, mainly the Malaysian Accounting Standard Board Research paper.
Findings
The findings show that coercive pressure such as government regulation contributes to challenges in the adoption of waqf accounting and reporting. Normative pressures contribute to challenges in formulating standardised waqf accounting and reporting, whereas mimetic pressure contributes to challenges in the comparability of the waqf accounting and reporting among the state Islamic religious councils in Malaysia. In the efforts towards the standardisation of waqf accounting and reporting practice, a similarity of the process of the standard implementation or the institutional isomorphism of the State Islamic Religious Council in Terengganu is strongly influenced from the result of the mandate of its Board members and Fatwa council members (coercive isomorphism and religion logic) and minor influence from the normative isomorphism (the result of the participants’ education and profession) as well as the result of imitating other State of Islamic Religious Councils (SIRCs) because of the ambiguity of the process or certain practice.
Research limitations/implications
The study contributes to the knowledge by extending institutional theory and the possible role of religion logic in Islamic perspective to organisational behaviour and accounting development in SIRCs. This study is limited to the understanding of the challenges in the adoption of waqf accounting and reporting but could also be applicable to the adoption of other accounting standards or regulations.
Practical implications
This paper offers key implications for research, in improving the understanding of contextual factors and decision to adopt waqf accounting and reporting. The standard setter needs to be aware of the influence of contextual factors that shape decision towards standardisation of accounting and reporting for waqf.
Originality/value
The interplay of institutional pressures and implications of religion logic provides an interesting approach to understanding the waqf institutions’ intention to adopt accounting and reporting for waqf.
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