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Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'

Islamic banking has achieved remarkable growth that has surpassed the growth of the conventional banking system. Yet, studies show that the performances of Islamic banks (IBs) seem to be trailing behind the conventional banks (CBs). Is the poor performance of IBs the result of mismatch between their...

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Main Authors: Mustafa Omar, Mohammed, Md. Taib, Fauziah
Format: Article
Language:English
Published: Center for Central Banking Research and Education, Bank Indonesia 2015
Subjects:
HA29 Theory and method of social science statistics
HB131 Methodology.Mathematical economics. Quantitative methods
HG1501 Banking
Online Access:http://irep.iium.edu.my/47267/1/Mom.Fauziah.Maqasid..pdf
http://irep.iium.edu.my/47267/
http://journalbankindonesia.org/index.php/JIMF/article/view/483
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spelling my.iium.irep.472672018-10-16T03:36:22Z http://irep.iium.edu.my/47267/ Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks' Mustafa Omar, Mohammed Md. Taib, Fauziah HA29 Theory and method of social science statistics HB131 Methodology.Mathematical economics. Quantitative methods HG1501 Banking Islamic banking has achieved remarkable growth that has surpassed the growth of the conventional banking system. Yet, studies show that the performances of Islamic banks (IBs) seem to be trailing behind the conventional banks (CBs). Is the poor performance of IBs the result of mismatch between their objectives and their performance measurement criteria or it is a reflection of their true performances? The objectives of Islamic banking had not been formally addressed. Mustafa and Taib (2009) derived the objectives of Islamic banking from Abu Zahara’s theory of the objectives of Shari’ah (Maqasid al-Shari’ah) and, based on these Shari’ah objectives, developed a model of Islamic banking performance measures. They named it as Performance Measures based on Maqasid al-Shari’ah framework or the PMMS model. This paper has tested the PMMS model on a sample 24 banks (12 IBs and 12 CBs). The twenty four banks were also evaluated using the traditional conventional financial measures. Mann-Whitney U-Test results show IBs faring well in their performances when measured using the PMMS model than when they are measured using the conventional banking performance yardstick. Policy prescriptions and recommendations for further studies are provided at the concluding section of the paper. Center for Central Banking Research and Education, Bank Indonesia 2015 Article PeerReviewed application/pdf en http://irep.iium.edu.my/47267/1/Mom.Fauziah.Maqasid..pdf Mustafa Omar, Mohammed and Md. Taib, Fauziah (2015) Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'. Journal of Islamic Monetary Economics and Finance (JIMF), 1 (1). pp. 55-77. ISSN 2460-6146 http://journalbankindonesia.org/index.php/JIMF/article/view/483
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HA29 Theory and method of social science statistics
HB131 Methodology.Mathematical economics. Quantitative methods
HG1501 Banking
spellingShingle HA29 Theory and method of social science statistics
HB131 Methodology.Mathematical economics. Quantitative methods
HG1501 Banking
Mustafa Omar, Mohammed
Md. Taib, Fauziah
Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'
description Islamic banking has achieved remarkable growth that has surpassed the growth of the conventional banking system. Yet, studies show that the performances of Islamic banks (IBs) seem to be trailing behind the conventional banks (CBs). Is the poor performance of IBs the result of mismatch between their objectives and their performance measurement criteria or it is a reflection of their true performances? The objectives of Islamic banking had not been formally addressed. Mustafa and Taib (2009) derived the objectives of Islamic banking from Abu Zahara’s theory of the objectives of Shari’ah (Maqasid al-Shari’ah) and, based on these Shari’ah objectives, developed a model of Islamic banking performance measures. They named it as Performance Measures based on Maqasid al-Shari’ah framework or the PMMS model. This paper has tested the PMMS model on a sample 24 banks (12 IBs and 12 CBs). The twenty four banks were also evaluated using the traditional conventional financial measures. Mann-Whitney U-Test results show IBs faring well in their performances when measured using the PMMS model than when they are measured using the conventional banking performance yardstick. Policy prescriptions and recommendations for further studies are provided at the concluding section of the paper.
format Article
author Mustafa Omar, Mohammed
Md. Taib, Fauziah
author_facet Mustafa Omar, Mohammed
Md. Taib, Fauziah
author_sort Mustafa Omar, Mohammed
title Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'
title_short Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'
title_full Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'
title_fullStr Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'
title_full_unstemmed Developing Islamic banking performance measures based on Maqasid al-shari’ah framework: cases of 24 selected banks'
title_sort developing islamic banking performance measures based on maqasid al-shari’ah framework: cases of 24 selected banks'
publisher Center for Central Banking Research and Education, Bank Indonesia
publishDate 2015
url http://irep.iium.edu.my/47267/1/Mom.Fauziah.Maqasid..pdf
http://irep.iium.edu.my/47267/
http://journalbankindonesia.org/index.php/JIMF/article/view/483
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score 13.211869

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