Search results

1 – 10 of 12
Article
Publication date: 24 August 2020

Aspalella A. Rahman, Ruzita Azmi and Rosylin Mohd Yusof

In Malaysia, Get-Rich-Quick scheme (GRQS) is one of the financial fraud activities prohibited under Malaysian law. The common facet of such schemes involves plans that…

Abstract

Purpose

In Malaysia, Get-Rich-Quick scheme (GRQS) is one of the financial fraud activities prohibited under Malaysian law. The common facet of such schemes involves plans that promise unrealistic rates of returns, and this new scheme continues to proliferate every year as the list of illegal investment companies and websites are growing. Indeed, GRQS will remain proliferating as long as there are people who are easily lured by the promise that wealth can be generated with little skill, effort or time. This paper aims to explain the phenomenon of GRQS in light of the existing laws in Malaysia. This paper also highlights the current development of Australian law pertaining to GRQS for comparative purpose.

Design/methodology/approach

This paper mainly relies on statutes as its primary sources of information. As such, this paper analyses the scope and provisions of the relevant laws that regulate GRQS and compare the existing GRQS provisions that are equivalent with Australian law.

Findings

Malaysia has comprehensive laws to combat GRQS activities. However, these laws are far from perfection, and only with immediate amendments, GRQS problems can be resolved more effectively. One of the weaknesses of current Malaysian laws to tackle GRQS is the lack of more stringent punishment against the operators of GRQS as well as the participants of the scheme. A comparison with equivalent GRQS law in Australia demonstrates that Australian laws provide a wide range of punishment to the operators and prohibits participation in GRQS. More importantly, Australia regards the offense as a strict liability offense where the mens rea or guilty mind of the perpetrators is exempted. Indeed, numerous proceedings have been instituted in the Australian Court against the operators and participants of GRQS.

Originality/value

This paper analyses the scope of relevant laws in Malaysia to combat GRQS and examines the strengths and weaknesses of these laws. This paper also compares Malaysian law with equivalent GRQS-related laws available in Australia. This paper further suggests that Malaysia should regulate sterner punishment for operators and participants of the scheme and that the offense is categorized under a strict liability offense where the mens rea or guilty mind of the offender is exempted.

Details

Journal of Financial Crime, vol. 28 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 3 October 2016

Rosylin Mohd Yusof, Mejda Bahlous and Roszaini Haniffa

This paper aims to contribute to the banking and housing market literature by proposing an alternative measure of rate of return for Islamic banks that is based on the…

Abstract

Purpose

This paper aims to contribute to the banking and housing market literature by proposing an alternative measure of rate of return for Islamic banks that is based on the rental rate of the property. This alternative Islamic mortgage pricing mechanism could be adopted by Islamic banks as a replacement for mortgage rates if it is found to be independent from any form of interest rates as required by Islamic law.

Design/methodology/approach

By investigating the short run and long run dynamics between rental price index (RPI) and the proposed Islamic Rental Rate (RR-I) and, three selected macroeconomic indicators in the UK via autoregressive distributed lag model, the authors examine the link between RPI, RR-I and the real economy.

Findings

The findings provide evidence that while RPI in the UK is significantly related to three leading macroeconomic variables, namely, gross domestic product (GDP), real effective exchange rate and interest rates measures, while RR-I is only impacted by changes in GDP. More importantly, the authors show that there is no short or long run dynamics between the rental rate and any form of interest rates.

Research limitations/implications

This paper did not attempt to investigate the impact of the physical attributes of the rental property to formalize the model describing the relationship between RPI and RR-I. Also, other macroeconomic factors like household income growth, risk, house value growth rate and taxation could be included in future models.

Practical implications

As Rental Rate is not linked to the macroeconomic determinants, it is therefore more stable, resilient and sustainable and, at the same time, making the financing less risky for both parties, as they are less susceptible to economic vulnerabilities.

Social implications

Some calculations incorporating the proposed RR-I can also be extended to the pricing of products based on other contracts such as Tawarruq, Bai Bithaman Ajil or even Murabahah for a fairer and just pricing to both the banks and customers.

Originality/value

The results suggest that Islamic banks should consider incorporating the proposed rental rate (RR-I) when pricing their home financing products, as this will lead to less dependence on interest rates for benchmarking. In addition, using the proposed rental rate (RR-I) reduces the exposure to the subjective evaluation by property valuators and speculative macroeconomic elements.

Details

International Journal of Housing Markets and Analysis, vol. 9 no. 4
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 2 January 2018

Rosylin Mohd Yusof, Farrell Hazsan Usman, Akhmad Affandi Mahfudz and Ahmad Suki Arif

This study aims to investigate the interactions among macroeconomic variable shocks, banking fragility and home financing provided by conventional and Islamic banks in…

Abstract

Purpose

This study aims to investigate the interactions among macroeconomic variable shocks, banking fragility and home financing provided by conventional and Islamic banks in Malaysia. Identifying the causes of financial instability and the effects of macroeconomic shocks can help to foil the onset of future financial turbulence.

Design/methodology/approach

The autoregressive distributed lag bound-testing cointegration approach, impulse response functions (IRFs) and forecast error variance decomposition are used in this study to unravel the long-run and short-run dynamics among the selected macroeconomic variables and amount of home financing offered by both conventional and Islamic banks. In addition, the study uses Granger causality tests to investigate the short-run causalities among the selected variables to further understand the impact of one macroeconomic shock to Islamic and conventional home financing.

Findings

This study provides evidence that macroeconomic shocks have different long-run and short-run effects on amount of home financing offered by conventional and Islamic banks. Both in the long run and short run, home financing provided by Islamic banks is more linked to real sector economy and thus is more stable as compared to home financing provided by conventional banks. The Granger causality test reveals that only gross domestic product (GDP), Kuala Lumpur Syariah Index (KLSI)/Kuala Lumpur Composite Index (KLCI) and house price index (HPI) are found to have a statistically significant causal relationship with home financing offered by both conventional and Islamic banks. Unlike the case of Islamic banks, conventional home financing is found to have a unidirectional causality with interest rates.

Research limitations/implications

This study has focused on analyzing the macroeconomic shocks on home financing. However, this study does not assess the impact of financial deregulation and enhanced information technology on amount of financing offered by both conventional and Islamic banks. In addition, it is not within the ambit of this present study to examine the effects of agency costs and information asymmetry.

Practical implications

The analysis of cointegration and IRFs exhibits that in the long run and short run, home financing provided by Islamic banks are more linked to real sector economy like GDP and House Prices (HPI) and therefore more resilient to economic vulnerabilities as compared to home financing provided by conventional banks. However, in the long run, both conventional and Islamic banks are more susceptible to fluctuations in interest rates. The results of the study suggest that monetary policy ramifications to improve banking fragility should focus on stabilizing interest rates or finding an alternative that is free from interest.

Social implications

Because interest plays a significant role in pricing of home loans, the potential of an alternative such as rental rate is therefore timely and worth the effort to investigate further. Therefore, Islamic banks can explore the possibility of pricing home financing based on rental rate as proposed in this study.

Originality/value

This paper examines the unresolved issues in Islamic home financing where Islamic banks still benchmark their products especially home financing, to interest rates in dual banking system such as in the case of Malaysia. To the best of the authors’ knowledge, studies conducted in this area are meager and therefore is imperative to be examined.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 4 December 2017

Sirajo Aliyu, Rosylin Mohd Yusof and Nasri Naiimi

The purpose of this paper is to propose the use of Islamic moral transaction mode as a moderator in sustainable Islamic microfinance banks (IMFBs) business model.

1072

Abstract

Purpose

The purpose of this paper is to propose the use of Islamic moral transaction mode as a moderator in sustainable Islamic microfinance banks (IMFBs) business model.

Design/methodology/approach

The paper highlighted the major issues of microfinance banks in Nigeria and presented an integrated model that will suffice the long-term survival of the institution. Moreover, regression analysis is also employed to examine the impacts of financial outreach on the Nigerian economic growth.

Findings

The authors find that Islamic moral transaction mode will moderate the sustainable Islamic banking business which can influence the sustenance of IMFBs and the well-being of the society through financial outreach.

Research limitations/implications

The paper has empirically tested the impact of financial outreach on growth, and suggested future studies to investigate the existing relationships among the proposed model components. Therefore, further studies have the opportunity to develop measurements that will guide in testing the model, as well as strengthening its components.

Practical implications

Implementing this model will enhance the sustainability of IMFBs and socio-economic well-being of the society through financial outreach. Consequently, this study also suggests other policy measures that will improve the sustenance of IMFBs and the society as a whole.

Originality/value

The paper contributes to the existing literature of microfinance banks by linking the components of the sustainable business model to primary evidence of Sharia coupled with an in-depth link to generosity.

Details

International Journal of Social Economics, vol. 44 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 15 August 2016

Rosylin Bt Mohd Yusof, Akhmad Affandi Mahfudz, Ahmad Suki Che Mohamed Arif and Nor Hayati Ahmad

This paper aims to propose a new pricing alternative called Rental Rate Index (RR-I) that captures the true value of property to be used by Islamic banks in Musharakah…

1230

Abstract

Purpose

This paper aims to propose a new pricing alternative called Rental Rate Index (RR-I) that captures the true value of property to be used by Islamic banks in Musharakah Mutanaqisah (MM) contract for home financing.

Design/methodology/approach

By formulating a profit rate based on Rental Index (RI) and House Price Index (HPI), the proposed rate eliminates conventional profit rate benchmarking, and, at the same time, suggests a fair, equitable and sustainable financing. This new RR-I (measured by RPI/HPI) enables computerization of the MM system in home financing to be easily implemented. A financial simulation is developed to demonstrate the feasibility of this newly proposed rate.

Findings

This newly proposed RR-I is found to be more stable, having less fluctuations, resilient to macroeconomic conditions and yet comparable to the conventional interest rates, without depending on them. It can also be regarded as a rate that is fair and sustainable to both the customer and the bank, as it measures the actual rate of return to both parties in MM contract.

Research limitations/implications

The paper confines one contract, namely, MM, as it is claimed to be more Shariah-compliant than others.

Practical implications

The finding also sheds some light on the recommendation by Bank Negara Malaysia, which is to consider RR that is more indicative of the actual rental price while taking into account the competitiveness of the product. (BNM, 2007).

Social implications

This paper wreaks customer patronage in selecting the contract of home financing.

Originality/value

This paper attempts to resolve the issue of benchmarking RR to the conventional interest rate in the MM contract. Studies conducted on this issue via simulation approach are meager.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 9 no. 3
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 22 May 2009

M. Shabri Abd. Majid and Rosylin Mohd. Yusof

The purpose of this paper is to explore the extent to which macroeconomic variables affect the Islamic stock market behavior in Malaysia in the post 1997 financial crisis period.

3823

Abstract

Purpose

The purpose of this paper is to explore the extent to which macroeconomic variables affect the Islamic stock market behavior in Malaysia in the post 1997 financial crisis period.

Design/methodology/approach

The paper employs the latest estimation technique of autoregressive distributed lag (ARDL) model approach to cointegration.

Findings

The results suggest that real effective exchange rate, money supply M3, treasury bill rate (TBR) and federal fund rate (FFR) seem to be suitable targets for the government to focus on, in order to stabilize the Islamic stock market and to encourage more capital flows into the market. As for the interest rates and stock returns relationship, the paper finds that when interest rates rise either domestically (TBR) or internationally (FFR), the Muslim investors will buy more Shari'ah compliant stocks; thereby escalating the Islamic stock prices.

Research limitations/implications

The results of this study are limited to the post 1997 financial crisis period until the beginning of the year 2006 for a small open economy, Malaysia.

Practical implications

The paper reveals that both changes in the local monetary policy variables and in the US monetary policy as measured by the changes in the FFR have a significant direct impact on the Islamic stock market behavior in Malaysia.

Originality/value

The paper adopts the latest time series econometrics technique to test for cointegration, ARDL. And it is among the earliest attempts to investigate the long‐run effects of the macroeconomic variables changes either domestically or internationally on the Islamic stock market.

Details

Humanomics, vol. 25 no. 2
Type: Research Article
ISSN: 0828-8666

Keywords

Article
Publication date: 3 June 2014

Mejda Bahlous and Rosylin Mohd. Yusof

The purpose of this paper is to assess the benefits to investors of international diversification among only Islamic funds. Compared to conventional investors who are not…

1345

Abstract

Purpose

The purpose of this paper is to assess the benefits to investors of international diversification among only Islamic funds. Compared to conventional investors who are not restricted in their choice of funds, Islamic investors are restricted to investing in shari’a-compliant funds, thus giving up some diversification benefits. The possibility of international diversification among only Islamic funds may thus help Islamic investors to invest in accordance to their religious beliefs and still benefit from diversification.

Design/methodology/approach

The paper assesses the benefits of diversification by analyzing the extent of co-integration among four regional Islamic funds and by estimating the short-term and long-term structural dynamics of and among these funds. The paper uses an Autoregressive-Distributed Lag (ARDL) approach to testing the long-run relationships among these funds and use variance decomposition and impulse response functions to examine the structural dynamics of the relationship between these funds. These methods can also be used for predictive purposes and represent, in authors opinion, a useful approach that complements the traditional methodology of static covariance matrix to find the efficient frontier at a given moment in time.

Findings

The results indicate that international diversification can help reduce risk if Asia Pacific Islamic funds and MENA region Islamic funds are invested contemporaneously and/or Asia Pacific Islamic funds and North America Islamic funds, and/or Europe funds and MENA funds. The paper also finds that investors would benefit from investing in North American funds and MENA funds both in the long run and in the short run. Conversely, the paper finds that Europe funds and North American funds are co-integrated in the long-run precluding the opportunity for substantial diversification benefits from these particular portfolio mixes.

Research limitations/implications

The long-run analysis helps passive fund managers and investors in composing their portfolio by providing evidence that some portfolio mixes of different regional Islamic funds lead to better risk return performance than one regional Islamic fund portfolios. The short-run analysis however helps the active fund managers and investors as it suggests that diversifying in the short run and reviewing their portfolio on a regular basis would be beneficial as well.

Originality/value

This analysis justifies the promotion of Islamic finance as the negative correlation between several Islamic funds across the regions studied suggests better opportunities of investments via international diversification making Islamic funds more desirable.

Article
Publication date: 1 March 2011

Rosylin Mohd Yusof, Salina H. Kassim, M. Shabri A. Majid and Zarinah Hamid

The purpose of this paper is to analyze the possibility of relying on the rental rate to price Islamic home financing product.

3305

Abstract

Purpose

The purpose of this paper is to analyze the possibility of relying on the rental rate to price Islamic home financing product.

Design/methodology/approach

By comparing two models consisting of either rental rate or lending rate (LR) and selected macroeconomic variables that could influence property value, the study focuses on the Malaysian data covering the period from 1990 to 2006. The study adopts several econometric time‐series analysis, such as the autoregressive distributed lag estimates, bi‐variate Granger causality, and multivariate causality based on the vector error‐correction model.

Findings

The study finds consistent evidence that the rental price (RP) is a better alternative than the LR to price Islamic home financing product. In particular, the rental rate is found to be resilient to short‐term economic volatility, while in the long run, it is truly reflective of the economic fundamentals.

Practical implications

This feature of the RP renders it as a fair pricing mechanism for the Islamic home financing product. Results of this study contribute towards finding an alternative benchmark for the Islamic home financing product which is currently using the conventional interest rate as its benchmark.

Originality/value

To the best of the authors' knowledge, the current study is the first of its kind which provides empirical evidence for the possibility of relying on the rental rate to price Islamic home financing product.

Details

Benchmarking: An International Journal, vol. 18 no. 1
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 23 February 2010

Norma, Saad, M. Shabri Abd. Majid, Salina Kassim, Zarinah Hamid and Rosylin Mohd. Yusof

The purpose of this paper is to investigate the efficiency of selected conventional and Islamic unit trust companies in Malaysia during the period 2002 to 2005.

10023

Abstract

Purpose

The purpose of this paper is to investigate the efficiency of selected conventional and Islamic unit trust companies in Malaysia during the period 2002 to 2005.

Design/methodology/approach

The paper adopts Data Envelopment Analysis (DEA) to investigate efficiency, as measured by the Malmquist index, which is decomposed into two components: efficiency change and technical change indexes.

Findings

The study indicates that technical efficiency is the main contributor to enhancing the efficiency of the Malaysian unit trust industry. In addition, the larger the size of the unit trust companies, the more inefficient the performance. In comparing the efficiency of unit trust companies, the study finds that some of the Islamic unit trust companies perform better than their conventional counterparts.

Research limitations/implications

The study is limited to five Islamic unit trust companies. Thus, the findings of this study are indicative, but inconclusive for the unit trust industry as a whole.

Practical implications

The results have two important implications for both conventional and Islamic unit trust companies in Malaysia. First, the deterioration of total factor productivity (TFP) in the unit trust industry in Malaysia is due to the deficiency of innovation in technical components. Second, the size of the unit trust companies has an adverse effect on the TFP performance.

Originality/value

The contribution of this study is that it analyzes the efficiency of the two types of unit trust industry which are important and relevant for Malaysia. This significance arises from the dual financial system, in which the Islamic unit trust companies operate in parallel with their conventional counterparts. The comparison sheds some light on the performance of the Islamic unit trust companies, whose operations are based on profit‐sharing, in contrast to the conventional unit trust companies.

Details

International Journal of Managerial Finance, vol. 6 no. 1
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 23 September 2013

Rosylin Mohd. Yusof and Mejda Bahlous

The purpose of this paper is to assess the contribution of Islamic finance to economic growth in countries that were early adopters of Islamic banking: Malaysia, Indonesia…

2454

Abstract

Purpose

The purpose of this paper is to assess the contribution of Islamic finance to economic growth in countries that were early adopters of Islamic banking: Malaysia, Indonesia and the Gulf Cooperation Council (GCC) countries.

Design/methodology/approach

Through panel cointegration analysis, variance decompositions (VDCs) and impulse response functions, this study investigates the Islamic finance and growth nexus.

Findings

Islamic banking is found to contribute to economic growth both in the long run and the short run for both GCC countries and the selected East Asia (EA) countries. In the short run however, Islamic banking contributes more to economic growth in Malaysia and Indonesia compared to the GCC countries.

Practical implications

The results lend support to the view that Islamic intermediation not only leads to economic benefits but also; increases managers' entrepreneurial skills through the involvement of the lender in the decision making and the partnership like relationship between the fund provider and the entrepreneur and also; reduces agency costs which produces positive impact on both the economy and the development of the society. This serves as a motivation for other countries to continuously promote Islamic finance.

Originality/value

To assess the importance of Islamic finance to economic growth, this study compares two main regional Islamic financial hubs, the GCC and EA countries. Another novel aspect of this study is in the methodology; it employs panel cointegration analysis, VDCs and impulse response functions on the set of annual data for period of 2000-2009.

Details

Journal of Islamic Accounting and Business Research, vol. 4 no. 2
Type: Research Article
ISSN: 1759-0817

Keywords

1 – 10 of 12